Page last updated at 13:37 GMT, Wednesday, 22 April 2009 14:37 UK

The Budget: Your questions

Alistair Darling
The Chancellor delivers his second budget on 22 April

BBC News online's panel of experts answered some of your Budget questions.

The panel comprised tax expert John Whiting, from PricewaterhouseCoopers, Christine Ross, group head of financial planning at SG Hambros, and pensions expert Malcolm McLean, chief executive of the Pensions Advisory Service.


The chancellor said that pensioners will be able to have an increased amount of savings before their pension credits are affected. Does this uplifting from £6,000 to £10,000 apply to recipients of other means-tested benefits such as housing benefit which also currently has a £6,000 savings ceiling?
Heather, Gateshead

Malcolm McLean, The Pensions Advisory Service

Malcolm McLean:

I would expect that the increased savings figure will also apply to other means-tested benefits but that has yet to be confirmed.


Our family income is £27,000 per annum. We claim child benefit and working tax credits. How will this budget help us financially?
Darren Boyd, Romford

John Whiting

John Whiting:

The short answer is that the Budget didn't really do anything for you but to be fair, that's because the rises in personal allowances, tax credits and child benefits were all announced in the November pre-Budget report. A married couple with two children and one earner on your level of income will be benefitting by £190 in income tax and NIC savings plus child benefit increases. Depending on your exact circumstances, tax credits may well also be increasing for you. But the measures announced today won't be of immediate help, indeed the rises in petrol, alcohol and tobacco may cost you more in tax.


What exactly does the duty rise on alcohol and tobacco mean in terms of prices at the local shop?
Rod Aveyard, Birmingham

Christine Ross

Christine Ross:

Whilst duty on alcohol and tobacco will rise today, many retailers may choose not to pass on all of this increase, so it is difficult to say how individual prices will be affected.


Simple question really; what is the best possible way to minimize the effects of the new 50% tax rate, the reduction in pensions tax relief and also the reduction in tax allowance for earners over £100,000? Once again the government is punishing the people who have done the right thing in their lives to pay the people who have done the wrong things.
Philip Hunter, Hartlepool, UK

John Whiting

John Whiting:

They are clearly making it difficult for people to sidestep the 50% rate with the curtailment on pensions contributions relief. One thing this does do is to make the distinction between capital gains (at 18%) and the top rate of income tax (to be 50%) even more stark - a further incentive to put effort into making a capital gain rather than taking income. One has to wonder if internationally mobile people will look harder at the situations in other countries as well.


They say tax credits will increase by £20 before 2010. What does this actually mean?
Dawn, Torquay, UK

John Whiting

John Whiting:

The main child element of the child tax credits, which is currently £2,235 per year, will go up from next April. The actual phrase in the Budget is "an additional £20 above indexation", so it is actually pretty modest.


Grandparents of working age who look after their grandchildren will benefit but what about retired grandparents? These would be the largest proportion surely, as the working age grandparents are working, aren't they?
Emma Brown, Ipswich

Christine Ross

Christine Ross:

Sadly the chancellor has done nothing for grandparent carers if they are over retirement age. The help for grandparents of working age was focused on protecting their state pension entitlement. Grandparents over the state retirement age would already have accrued their state pension rights and be receiving their pensions.


What will the thresholds be for tax bands from April and thresholds for national insurance?
Ian Mcgovern, London

John Whiting

John Whiting:

The figures seem to be all as announced previously; the only new figure seems to be the annual CGT exemption of £10,100. So we continue with personal allowances of £6,475, the main threshold for NICs of £110 per week, and the upper threshold for NICs - when the 11% rate stops - of £844.


I am likely to retire during the summer. I am a woman of 62. Can you tell me if the pensioners' personal tax allowance is likely to rise this year? Diana Proudfoot, Derby, England

Malcolm McLean, The Pensions Advisory Service

Malcolm McLean:

The personal tax allowance for people under 65 has increased from £6,035 to £6,475 for the tax year commencing 6 April 2009. The allowance for people aged 65 to 74 has increased from £9,030 to £9,490, and that for people aged 75 or over from £9,180 to £9,640.


Will a person over 50 who has already invested £3,600 in a cash ISA for this current tax year (2009/10) be able to make an additional investment of £1,500 in a new cash ISA, to make up the new limit of £5,100? I thought up to now it was not possible to have two cash ISAs in one tax year? If I am correct then, without a concession, the lateness of the Budget this year will disadvantage people who have already made an investment before today's announcement.
G. Smith, Birmingham

Christine Ross

Christine Ross:

From the information I have seen so far, it would appear that savers over the age of 50 on 6 April 2009 will be able to make an additional ISA investment, with a maximum overall contribution for the year of £10,200, of which £5,100 may be invested in cash deposits. It is likely that savers will be restricted to one ISA provider for the 2009/10 tax year so a top up would be permitted up to the new limits. We will need to see the detail but it is unlikely more than one ISA will be permitted in the tax year.


I am not sure about the removal of tax relief on pensions for those on £100,000 or more. Does this mean that for those contributing to a pension who have incomes of £100,000 that they will no longer get the 40% relief on the whole pension?
Simon Crabtree, Dartford

Malcolm McLean, The Pensions Advisory Service

Malcolm McLean:

The cut is for incomes over £150,000 and the announcement talks about a tapering of relief to 20% as incomes rise to £180,000. It's not wholly clear how this will operate but presumably 40% relief will continue for most contributions.


What exactly are the rules on the car scrappage schemes? Do the new cars have to be brand new? Is there a limit on the overall price that the £2,000 can be used on? Can you use multiple vouchers together? Can the same family use two vouchers on different new cars? James, Manchester

John Whiting

John Whiting:

We are still thin on details. We expect more details from Lord Mandelson tomorrow. The expectation is it will apply to new cars only. There's no limit on the car price yet but expect it to be linked to low-emissions vehicles. There is only £2,000 per new car and bear in mind that the old car has to be over ten years old. The family can presumably use the scheme for more than one car.


So what is the incentive for first-time buyers to kick start the housing market? Chris, Seaford, UK

Christine Ross

Christine Ross:

The main incentive continues to be the stamp duty holiday in respect of property purchases valued at up to £175,000.


Will there be any help with my savings, such as the abolition of the 20% paid by basic-rate tax payers? Robin Podd, Ripley, Derbyshire

John Whiting

John Whiting:

No sign of that particular measure - but the help comes by the increase in ISA limits.


I've just taken out a cash ISA with Barclays, investing the (then) maximum of £3,600. I'm over 50. Will I now be able to top this up to the £5,100 announced today and, if so, will there be any downside such as the bank offering a lower interest rate on the extra £1,500 invested or indeed on the entire £5,100? Are these decisions up to individual banks, or will the Treasury tell them what they can and can't do?
Jeff Lee, Otford, UK

Christine Ross

Christine Ross:

We have yet to see the detail regarding the introduction of the increased ISA limit. However, the most likely outcome is that you will be able to make a 'top up' contribution after 6 October 2009 when the new rules come into effect for those aged 50 and over. I do not think you will be able to take out a new, separate ISA for the current tax year. The rates offered by your chosen ISA provider will depend on whether you have invested in a variable or a fixed-rate account. The Treasury will not make any stipulation with regard to the rates offered; this will be a commercial decision for the banks but there is significant competition in the ISA market with many institutions wishing to attract new savers.


What is happening on tax allowances for 2010/11 and child benefit for the next tax year?
Lesley Taylor, Chatham, Kent

John Whiting

John Whiting:

We don't know anything about the tax allowances for 2010/11 other than the personal allowance will be phased out for those earning over £100,000. Child benefit again we have to wait and see - though the implication of Mr Darling's comments on other matters are that we can expect above-inflation increases.


Has Mr Darling increased the state pension for the pensioners? How much and from when?
Daruwala, Dukinfield, Cheshire

Malcolm McLean, The Pensions Advisory Service

Malcolm McLean:

The state pension increases from £90.70 to £95.25 from 6 April 2009. Annual increases are normally based on the September Retail Price Index. The chancellor confirmed that the minimum increase next year would be 2.5% even if next year's R.P.I were to be less.



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