So the Chancellor has set out his Budget for 2014. There’s lots going on, so here are the key things that are relevant to most of us on a day to day basis.
1. You Can Save More In ISAs
From July 1st, ISAs will be replaced by NISAs (National Individual Savings Accounts) and you’ll be able to save up to £15,000 tax free. Read our 9 ISA Basics guide to learn more about how ISAs work.
2. You Can Earn More Before Tax
If you earn less than £41,865 you’ll be better off each year as the “personal allowance” rises to £10,000 on April 1st. This is the amount of money you are allowed to earn that you don’t pay tax on. So you’ll pay 20% on money you earn between £10,001 and £41,865. This will probably be worth £100.
The top salary boundary has only risen by 1% though, so it means more people will be paying 40% tax on anything they earn over £41,865. Next year the personal allowance will go up by another £500, again worth £100 a year to 20% tax rate payers.
3. Long Haul Flights Should Be Less
Changes in the tax system on flights means long haul should be cheaper on most flights. Previously taxes on flights to the USA had been lower than places such as India or China, now they’ll all be in the same, cheaper, bracket.
4. Cigarettes Will Keep Getting More Expensive, Beer Will Be Cheaper
Each year the duty (tax) on cigs will rise by 2% above inflation. Beer though will cost 1p less per pint! Other booze will raise with inflation, except cider and spirits which will have their duty frozen.
5. The Petrol Duty Rise Has Been Cancelled
The government had planned to rise the duty on petrol in September, but it’ll now remain the same.