BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
    You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
 Wednesday, 17 April, 2002, 18:02 GMT 19:02 UK
Q&A: How am I affected?
This year's Budget brings an increase in taxes to fund investment in health. But how will the Budget affect individuals, from the size of their pay packet to the cost of their pint? BBC News Online explains

Will my pay packet be smaller?

In the long-term, you are likely to be worse off.

There will be no immediate change, but the chancellor is increasing National Insurance (NI) contributions for employees, employers and the self-employed from April 2003.

This means that people who fall into these categories will find their NI contributions increased by one percentage point on earnings greater than 4,615 up to 30,940.

Extra national insurance costs
Annual salary of 10,700: extra 1.65 a week
Annual salary of 21,400: extra 3.70 a week
Annual salary of 32,100: extra 5.75 a week

This is roughly the equivalent of a penny in the pound on income tax - an income tax hike through the backdoor.

It will cost those earning up to 30,940 an extra 263.25 a year.

The chancellor has also effectively "uncapped" the so-called upper earnings limit of 30,940.

Taxpayers whose NI payments were previously capped will now see 1% of their earnings above that level paid out in NI contributions.

Someone earning 50,000 a year will pay an extra 190.60 a year, on top of 263.25. In total, they will be 453.85 a year worse off.

Someone on 100,000 a year will pay an extra 953.85 a year.

They may also be affected by increases in employers' NI contributions - some employers might consider the impact during their next pay reviews.

What about booze and fags?

If you are a smoker, you will be hit by another - now predictable - increase in duty.

The chancellor has levied an extra six pence on a packet of 20 cigarettes.

It is better news for drinkers. The chancellor has frozen duty on beer, spirits and wine.

In fact, if you are a cider drinker - duty has been cut by 2%. And, if you like to drink beer made by small breweries, you may benefit.

The chancellor is introducing duty relief for small breweries, with drinkers likely to see a cut of 14p off the price of a pint.

Alcopops drinkers will be less enthusiastic - prices will rise as the drinks will now be taxed at spirits rather than wine rates.

I've got children. Do I get any additional help?

Putting "families first" is one of the catchphrases the chancellor likes to wheel out at Budget time.

Child credit will be raised with earnings for the rest of parliament, which is widely believed to be better than the fad for linking benefits and credits with prices.

Families will receive up to 54.25 for the first child and 92.75 if they have two children.

Families with two children and which earn up to 35,000 will get up to 50 a week childcare help.

The new child tax credit which will be introduced in April 2003 will be payable to families with household incomes up to 58,000.

In the first year of a child's life, the new tax credit will be available to families earning up to 66,000 a year

How much you get from these amounts will depend on your income. The chancellor wants to redistribute wealth to change UK society - and this means that the poor get more.

I want to buy a house. Will I be worse off?

There were no across-the-board changes in stamp duty, although the chancellor did announce an extension to benefits for purchasers in deprived areas.

However, he said he would crack down on tax avoidance measures which people were using to avoid paying stamp duty.

I'm a pensioner. Am I any better off?

There was one piece of good news for all pensioners.

The chancellor announced an above-inflation increase in age-related personal allowances.

An elderly taxpayer will be able to set the first 6,610 of their income against tax - and the first 6,740 for those aged 75 or more.

This means that some pensioners will pay less income tax.

I'm a motorist. Is there anything for me?

Good news, on the whole. Fuel duty has been frozen, and the chancellor has announced incentives for "green" drivers.

The chancellor announced cuts of 55 in the licence fee for the least polluting vans, cuts of 30 for the least polluting cars and cuts of up to 35 for motorcycles.

Cars that will qualify for the new reduced rate will include the most efficient versions of the Ford Fiesta, Vauxhall Astra and Peugeot 206.


Key stories

Analysis

QUIZ

BUDGET DIARIES

AUDIO VIDEO

TALKING POINT
See also:

Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes