Rachel Reeves has delivered her much-anticipated budget. Speculation was rife leading up to today’s announcement about what exactly would and wouldn’t be included in the first Labour budget in 14 years.
As expected, income tax and national insurance rates have been frozen, but so too have the tax thresholds. The freezing of the personal allowances means that people who are due to receive a pay rise will see the amount of tax they pay increase, something known as ‘fiscal drag’.
The cost of smoking is increasing, with cigarette duty rising by the Retail Price Index (RPI) inflation rate – currently at 2.7% – plus an additional 2%. Duty on packets of rolling tobacco are set to increase by an additional 10%.
It’s good news and bad news for drinkers, with the duty on draught products such as beer and cider falling by 1.7%, which works out as 1p per pint. Wine and spirits are on the rise though, increasing by the RPI, which works out at around 1p for a small glass of wine or measure of whisky.
Despite speculation that the Chancellor was set to restore the 5p that was cut from fuel duty by the previous government, fuel duty is set to remain at the current levels for the foreseeable future.
You can see how today’s announcements will affect you by using our interactive calculator:
This calculator is only designed to give you an indication of the tax and National Insurance you will have to pay, as many factors can impact your individual tax code.
Beer prices are based on a 4.5% pint, while wine is based on a 125ml glass with 12.0% strength, and spirits are set at a 25ml glass at 45.0%. Fuel has not been included as the duty on petrol and diesel has been frozen.
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