Where will Hammond hit YOU this Budget?
PHILIP HAMMOND is thought to have extra cash for the Budget.
With the economy motoring along, there could be small boosts for elderly care and shopkeepers facing huge tax rises.
But the Chancellor has said there will be no big giveaways. He is expected to save major tax changes until Brexit negotiations have been triggered later this year. Here, we look at what could be in store for you today.
NATIONAL INSURANCE
THERE have been hints that Mr Hammond will hike National Insurance (NI) charges for people who work for themselves.
Britain’s self-employed workers pay 9 pc of their income in NI, but company employees pay 12 pc and employers pay a further 13.8 pc. This made sense when the selfemployed had less state pension, but that changed last year with a new £155 payout.
SMALL SHOPS
THOUSANDS of shopkeepers, pub landlords and restaurant owners are hoping the Government keeps a promise to ease the burden of looming tax hikes. Money Mail’s Save our Shops campaign revealed half a million traders face business rate increases of up to 3,000 pc from April, which could force many pubs, shops and nurseries to close. Now, Communities Secretary Sajid Javid said help will be announced in the Budget.
ELDERLY CARE
COUNCILS are struggling to fund care home places. Mr Hammond could give them £1.3 billion to tackle this crisis and announce a longer-term care funding review. A ‘care Isa’ — a tax boost if you put aside money for care — and tax-free pension withdrawals to pay nursing bills may be proposed. The Government may push forward with a £72,000 cap on care bills and consider a ‘death tax’ to take care fees from former residents’ estates.
SMALL PRINT
COMPANIES will be banned from using baffling small print to tie customers into rip - off deals. Money Mail campaigned against endless pages of catches on phone contracts or gym memberships.
Mr Hammond is expected to limit small-print length and rule against subscription traps, where money is taken from your account automatically after a free trial ends. The competition watchdog may receive new powers too.
PENSIONS
BEFORE last year’s Budget, Money Mail campaigned to stop a pensions tax raid. But will Mr Hammond try the same trick? Savers can put up to £40,000 a year in a pension and pay no income tax until they withdraw it.
At 55, they can take 25 pc taxfree. This costs the Treasury £38 billion a year in lost revenues. Mr Hammond could cut the annual limit to £35,000, or reduce the lifetime limit from £1 million to £750,000.
BUY-TO-LET
LANDLORDS have been scrambling to beat a tax blow by setting up companies. Buy-to-let inves- tors get tax relief up to 45 pc on their mortgage interest bills.
This will fall to 20 pc over the next four years, unless the property is in a registered company.
But the National Landlords Association fears the Chancellor will stop people doing this and restrict tax relief for all landlords.
INSURANCE TAX
DRIVERS and household insurance bills increase in June, when premium taxes are hiked.
The tax has risen from 6 pc in 2015 to 10 pc today, and will now hit 12 pc.
Motorists face an extra £300 a year hit from a payout rate for serious injury in car accidents.
The Government had to review this change, and is under pressure to review premium taxes. Insurers suggest taxes be waived for under21s, who face the biggest hikes.
FUEL DUTY
MOTORING campaigners want fuel duty cut, or frozen, for longer.
Drivers currently pay a 57.95p per litre levy on petrol and diesel, frozen until next year. It’s been frozen since 2011, so it’s ripe for an increase.
But the Chancellor could cut the tax as a small giveaway to compensate for insurance premium rises in June.