'Nothing new' in Darling's first budget
ALISTAIR Darling's first budget as chancellor focused on stability, a leading Ipswich financial analyst said today.The big losers were smokers, drinkers and shoppers, while income tax and National Insurance changes were little mentioned but are set to impact on lower earners.
ALISTAIR Darling's first budget as chancellor focused on stability, a leading Ipswich financial analyst said today.
The big losers were smokers, drinkers and shoppers, while income tax and National Insurance changes were little mentioned but are set to impact on lower earners.
Yvonne Graham, tax manager with East Anglian based Ensors, said there was “very little new” in this year's budget.
She said: “Because Gordon Brown had announced most of the changes last year, there was very little for Alistair Darling to add.
“He mentioned the reduction in the basic rate of tax but failed to mention the withdrawal of the 10 per cent band, which will impact on lower earners while benefiting higher earners.
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“Among other things he failed to mention was an increase in the National Insurance upper earnings limit of £100 a week.”
Mrs Graham said the National Insurance change will mean people on around £40,000 a year paying about £500 a year more while lower earners will be unaffected by the change.
However the reduction in the basic rate of income tax to 20 pence, announced last year and coming into effect next month, will mean a boost of about £500 for £40,000 a year earners, cancelling out the increase in National Insurance.
But lower earners on about £9,000 a year can expect to pay an extra £150 in tax with virtually no change to their National Insurance payments, leaving them worse off.
“He also failed to mention the increase in Corporation Tax for smaller companies, again put in place by Gordon Brown last year, although he did mention the reduction in Corporation Tax for large companies.”
The main losers of the budget include smokers, drinkers and shoppers.
“As far as smokers and drinkers are concerned this was no less than they would have expected while the charges for plastic bags do not come into effect until 2009.
“It's a nice gesture and something does need to be done about pollution and bags littering the countryside but this isn't going to make a significant change to habits.”
Meanwhile drivers of the highest emitting “gas guzzlers” will pay an extra £100 a year in tax for cars registered after March 2006.
“If you are buying a new car, less than two years old, with that size engine, an extra £100 is not going to make that much difference.
“However I like the no road tax for cars with the lowest emissions.”
“For people buying that sort of car that will be a consideration.”
Pensioners are also set to benefit from an increase in winter fuel allowance meaning 65-79 get an extra £50 a year, while the over 80s get an extra £100.
“I think that pensioners generally worry about their fuel bills and this might help a bit.”
Mrs Graham said: “He mentioned stability and that is what he's done.
“Gordon Brown was a great one for fiddling about and it doesn't appear he has done the same thing.”
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