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Last Updated: Wednesday, 12 March 2008, 14:09 GMT
Q&A: What the Budget means for you
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Chancellor Alistair Darling has presented his first Budget - but how will the changes he announced affect your finances?

What is happening to car and petrol taxes?

A rise in fuel duty of 2p per litre, due to start this April, has been postponed to October 2008. But there will be another rise of 0.5p per litre in real terms from 2010.

From 2009 there will be a "major reform" of the regime for taxing cars. This will involve new bands of vehicle excise duty (VED) for newly manufactured low-emitting cars.

From April 2010, there will be no VED in a car's first year if it emits less than 130 grammes per kilometre of CO2. But there will be a higher first-year rate for the most polluting cars.

What changes are there to state benefits?


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From April 2009, rather than 2010, child benefit for the first child will be increased to 20 a week.

Also from April 2009, the child element of the child tax credit for families on low and middle income will rise by 50 a year above inflation.

The chancellor said this would mean that families with two children, earning up to 28,000 a year, would be 130 a year better off.

From April 2010 "work capability assessments" will be brought in for long-term claimants of incapacity benefit - to get more of them off benefits and back into work.

Is anything being done about rising gas and electricity bills?

The chancellor said he might change the law to force utility companies to give a "fairer deal" to the five million customers who use pre-payment meters for their gas or electricity bills.

What about the tax changes the chancellor announced last year?

The changes to capital gains tax already proposed, including the new entrepreneurs relief, and the standard rate of 18%, will start this April.

The new regime for the "non-domicile" tax payers, which has already been announced, will come in during April as planned, but there will be no further changes in either this Parliament or the next one.

Aren't there other changes in the pipeline?

There certainly are - and they were announced in last year's Budget statement.

From 6 April this year the low 10% "starter" rate for income tax is being abolished, while the "basic" rate will come down from 22% to 20%.

People aged over 65 will benefit from a substantial rise in their annual tax-free allowance, which goes up from 7,550 to 9,030.

Meanwhile the "upper earnings limit" for national insurance contributions goes up by 100 a week to 770 a week. So an extra 100 of earnings per week will have national insurance levied at 11% rather than 1%.

Is anything being done to make it easier to buy a house?

Where people buy their homes through the government's shared-ownership scheme, stamp duty on these homes will not be charged until the buyer owns 80% of the equity in the home.

What about plastic bags?

If retailers do not take steps themselves to cut back on their use, then legislation may be brought in next year that could force them to charge for plastic bags.

Fags and booze?

Excise duty on tobacco goes up from 6pm today and will put 11p on the price of a packet of 20 cigarettes and add 4p to the price of five cigars.

And from midnight on Sunday, alcohol duty rates will go up by 6% above inflation.

That means beer will rise by 4p a pint, cider by 3p a litre, wine will be 14p a bottle more expensive and spirits will cost 55p a bottle more.

However these alcohol duties will increase by 2% above the rate of inflation, each year, for the next four years.


The winter fuel payment for the over-60s will go up from 200 to 250 and for the over-80s it will rise from 300 to 400.

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