Budget 2011: What does it mean for you?
By Kate Saines
If you are a motorist... it's good news. You'll be paying less than expected for your petrol or diesel.
As of 6pm yesterday, (March 23rd) fuel duty will be cut by 1p per litre. What's more the rise of 4p per litre on fuel, due to be introduced in April, has been postponed until 2012.
The Chancellor, George Osborne, also announced the annual fuel duty escalator – the process of automatically increasing fuel tax ahead of inflation - will be scrapped for the rest of this Parliament.
Edmund King, President of the AA, described it as a 'common sense' move which has probably stopped the so-called summer of discontent.
"An increase in duty would have bled many drivers on low incomes dry so this action offers short-term aid," he said.
However, it could potentially only provide a brief respite for motorists as, warned Mr King, jittery stock markets and tensions in North Africa are pushing the oil price back up, meaning pressure on pump prices and inflation could grow again.
"After all," he added, "petrol prices were 5p a litre cheaper only as far back as the end of January. The early January increase in VAT and duty is already bringing in an extra 5p a litre for the Treasury."
If you are a first-time buyer... there's also good news.
The Chancellor, through today's budget, announced details of FirstBuy, a scheme to provide first-time buyers struggling to save a deposit with the chance to take up a five-year interest-free loan.
George Osborne said the £250 million shared equity scheme would help 10,000 people make their first property purchase.
It's been hailed as a step in the right direction for giving first-time buyers a boost. But others point out it just does not go far enough to help all the millions of homebuyers affected by the credit crunch.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA) said George Osborne's estimation that 10,000 borrowers would be helped by the scheme equated to just a five per cent rise in the number of loans to first-time buyers compared with 2010.
He added: "We would like to see this scheme used hand-in-hand with other initiatives, such as a review of the Stamp Duty threshold."
There are also restrictions. To qualify for the scheme borrowers must be jointly earning less than £60,000 and FirstBuy will only help borrowers purchase a new build property.
Karen Barrett, chief executive of Unbiased.co.uk, which helps people obtain financial advice, said: "According to our latest Advice Driver statistics, first-time buyers accounted for 35 per cent of all those searching for a whole of market mortgage adviser in February 2011, highlighting them as an important group who are searching for advice as to how to get onto the property ladder.
"Given these numbers the reforms announcement may not go far enough to kick start the housing market."
If you are a tax-payer... there's a little relief on the way.
The personal tax allowance will rise by £630 to £8,105 in April 2012. This means you will not be taxed on the first £8,015 you earn.
This comes in addition to the increase of £1,000 to the personal allowance already being introduced in April this year.
The Chancellor said the 2012 rise was a "real increase of £48 extra per year, or £126 in cash terms."
He said that together with this year's rise that made a total of £326 extra each year for those working hard to pay for their families needs.
The move has been applauded.
Alison Garnham, chief executive of Child Poverty Action Group said the hike will be welcomed by families desperately trying to make ends meet.
But she feared it would be nowhere near enough to make up for rising living costs or the cuts already announced that were set to hit the poorest hardest.
"Income tax accounts for about three per cent of the incomes of the poorest fifth of households," she said. "Today's help with the threshold is relatively small beer compared to the harm of the VAT increase – the poorest families spend nearly ten per cent of their income on VAT."
The Chancellor also announced proposals to merge income tax and National Insurance. This won't have an immediate effect as there will be a lengthy consultation period.
Ms Barrett of Unbiased.co.uk, said: "While in theory this should simplify the tax system for consumers, any changes to the tax system can be hard to fully understand."
Meanwhile the 50 per cent top tax rate is to remain, but the Chancellor said it was being reviewed to assess how much income it raised.
If you are a pensioner...there's no change for now.
However, for pensioners of the future a £140 flat rate on the state pension is to be introduced.
Helen White, acting director of life and savings at the Association of British Insurers, said this was an important move towards a simpler and more understandable pension system.
"It will help people plan for their retirement," she said, stop people falling into the means-testing trap and ensure that it always pays to save."
If you are set to pay inheritance tax... there's good news.
There is to be a ten per cent discount on inheritance tax for people who leave ten per cent of their estate to charity.
Currently this tax is paid by anyone leaving £325,000 in their estate. They are taxed on the amount above the £325,000 threshold.
Gerry Brown, technical manager of Prudential, described this as a 'clever move' on the part of the coalition government. He said: "[It] won't cost much in revenue terms but shows that tax collectors have a heart."
For drinkers or smokers... there's a mixed bag
There is good news if you are planning to go for a pint to drown your sorrows over the state of the economy as there have been no extra changes to the duty on alcohol. However, previously announced increases add 4p to a pint of beer, 15p to a bottle of wine and an average of 54pence on a bottle of spirits.
Meanwhile, Mr Osborne has raised duty on tobacco to two per cent above inflation. He also announced plans to change the way the duty regime worked.
Who is the biggest loser in today's budget?
One major criticism of today's budget was a complete lack of provision for families, particularly those struggling with debt or in financial hardship.
Critics have slammed George Osborne's failure to acknowledge the 2.5 million unemployed and vulnerable families.
"Despite the Chancellor's repeated recognition of the pressures facing families, the Budget contains nothing specifically targeted to help families with children," said Alison Garnham of Child Poverty Action Group.
Meanwhile, Helen Dent, chief executive of charity, Family Action, said: "George Osborne's clearly not a family man.
"There was nothing for disadvantaged or vulnerable families. We need a fair family stabiliser not just a fair fuel stabiliser.
"A strong economy doesn't just start with small business but with strong families who can stand on their feet and are work-ready because they get the right support from services and welfare."
And, briefly, who else has been affected?
• Non-domiciled tax payers will have to pay a higher annual charge. The levy will go up to £50,000 for those living in the UK for 12 years.
• Students and young people are set to benefit from funding for 12 university technical colleges. The Chancellor also announced the creation of 40,000 apprenticeships for young people who are out of work and funding for thousands of new work experience placements.
• Business will see corporation tax cut by two per cent in April.
• Planners – those people responsible for allowing building developments to go ahead – will benefit from new rules which encourage building in a bid to boost growth and jobs.
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