Beer, wines and spirits duty frozen while smokers are hit

Hard-pressed working families got some Budget respite from Chancellor Philip Hammond.

The by-now customer freezing of duty on petrol and diesel was continued, while tax on beer, wine, cider and spirits was also maintained at current levels.

Smokers were hit once again with an inflation plus 2% increase in duty, meaning the cost of cigarettes will rise by about 6%.

The personal income tax allowance rose to £1,850, which means the typical worker will pay £1,075 less tax that they were doing in 2010/11 said Hammond.

Meanwhile the national living wage will rise from £7.40 to £7.83 per hour from April, giving low-paid full-time workers a pay increase of £600 a year.

At the other end of the scale, the higher rate tax threshold is to rise to £46,350 from April.

The Chancellor also announced a new rail card for people aged between 26 and 30 which will cut their travel costs by a third.

In a further attempt to relieve pressure on the family purse, air duty was frozen for 95% of passengers.

And for struggling households a £1.5bn package to resolve concerns about the universal credit payments was announced.

Richard Whitelock, Head of Private Clients at Garbutt + Elliott, said:  “There were no surprises with re

Richard Whitelock

gards to the personal income tax allowances  – they are on a track and very much expected.

“It’s all in line with was what expected pre-budget announcements. All of these personal tax allowances are particularly attractive to the younger generations and the younger voters – the fact Hammond chose to highlight these areas just shows who he was aiming the budget at.

“The reality is that all  wallets are being squeezed, the duty isn’t being altered but that’s not to say inflation is not eating away at  disposable incomes.”

Kevin Hilton

Kevin Hilton, director of wealth management at Garbutt + Elliott, said: “The good news here is that this has been a very uneventful budget for pensions, which have been a soft target for a spate of restrictions and added complexity in recent years. Today there have been no further attacks on the annual allowance and a modest increase in the lifetime allowance has been confirmed for April next year.

“It seems that the Chancellor has bigger fish to fry at the moment while Brexit negotiations continue to dominate the agenda. However this would seem to only be a brief respite, as clearly the cost of pension tax relief will remain high on the political agenda.

“When it comes to pensions planning it pays to make sure you know what you can and can’t do, so having this stability is something to make the most of – as pension tax relief is unlikely to be off the radar for too long.”