Five announcements hidden in fall 2021 budget documents including cigarettes and pensions
RISHI Sunak today announced an overhaul of alcohol taxes and universal credit in his budget.
But there were also other changes hidden in the government’s budget day mine of documents.
Here we bring together what is changing beyond the Chancellor’s budget speech – including benefits, pensions and cigarettes.
The budget at a glance:
Cigarette prices are rising
Cigarette prices are going up – but you won’t have heard Mr. Sunak say it.
The cost of a pack of cigarettes and roll-your-own tobacco typically increases each year and it is no different in 2021.
In government documents, he said: “The tariff rates on all tobacco products will increase by RPI + 2%.
“The rate on hand-rolling tobacco will increase by RPI + 6% and the minimum excise duty will increase by RPI + 3% this year.”
This means that a 20 pack will skyrocket all the way to 88p and the hike will go into effect from 6pm tonight.
Rising pensions for low-income Britons
The government plans to close a loophole that leaves more than a million Britons with less in their pensions.
When you contribute to a pension you get tax relief, but some who earn more than £ 10,000 and less than £ 12,570 are not reimbursed because of the way they are paid.
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According to Now Pensions, this so-called take-home pay anomaly means low-income people are not getting £ 111million in tax relief from the government every year.
The government has pledged to fix the problem and plans to put in place a top-up scheme by 2024 that could increase people’s pensions by £ 54 a year on average.
Beck O’Connor, head of pensions at Interactive Investor, said this “fixes a quirk in the pension tax system that unfairly penalizes low incomes.”
Extended excess income threshold
Hidden in the budget documents, the government announced that it would extend the raising of the Universal Credit surplus threshold until April 2023.
The threshold was originally set to return to £ 300 in April 2022, but it has been extended.
If your income exceeds £ 2,500 and your entitlement drops to zero, anything over that amount is carried over to a later assessment period.
It then counts for the subsequent evaluation period.
This means that you can’t make a lot of money in one month and very little in other periods, according to entiledto, and still be entitled to full universal credit in those later periods.
Employment support allowance
The Employment Support Allowance is worth up to £ 74.70 per week if you are sick or disabled.
You will be able to continue claiming it from the first day of your illness until March 24, 2020, budget documents reveal.
It will then return to normal, with applications after eight days instead of one.
The switch to a day was made to help people get through Covid and will continue to do so next year.
The budget documents show that the annual tax-free savings allowances will remain the same next year.
For adult ISA accounts the limit will remain at £ 20,000 per year and for Junior ISA funds and children’s trust funds it will remain at £ 9,000.
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