Beer drinkers may be looking forward to a cheaper pint from Sunday, but will they actually be able to afford to go to the pub after the tax changes announced in the Budget? Looking closely at the figures here, it's clear there are few real winners and losers as a result of George Osborne's tinkering with the tax system.
In simple terms, the more you earn the better off you'll be in 2013-14. Very high earners – who trouser £500,000 a year – will benefit most, having been handed up to £1,429 extra a month by the Chancellor. That gives them an annual boost of £17,148. A single person earning half a million – with or without a child – will be that much better off. If you earn that much and are the sole earner in a family, with one or two children, you'll also have an extra £17,148 a year.
If you're self-employed and make £500,000 a year you'll be three quid a month – or £36 a year – worse off than your high-earning salaried mates as you'll only be £1,426 a month to the good. Meanwhile wealthy single pensioners aged 75 or over pocketing half a million a year will see their monthly income climb by £1,419, or £120 less a year than younger high-earners.
What about the losers? Frankly, there are few of them, and even those who will be hit the hardest in the 2013-14 tax year will only be down £39 a month, or less than a tenner a week. That works out at £468 a year. According to our detailed figures, the person hit the most is a single pensioner who has an income of between £125,000 to £150,000 a year. So that tenner a week may not hit them too hard.
Among single people, those earning £125,000 to £150,000 will be hardest hit in 2013-14 while among couples, it's those earning £200,000. Even then they'll only lose £168 a year.
What about those on average wages? How will the Budget changes affect them? The latest annual survey of hours and earnings by the Office for National Statistics in November had the average wage at £26,500.
If you're on somewhere around that, say £25,000, you'll be better off in the next tax year by about £360, which will be useful. However an average earning couple with two earners and two children will be £432 better off, while single people with no children will only be £288 better off. Having two kids will therefore gain a dual-earning couple earning £25,000 an extra £144. If you're single with no kids, you'll be £288 better off if you earn less than £45,000. If you earn between £45,000 and £100,000 you'll only be £180 better off. If your income's £125,000-£150,000 you'll actually be £348 worse off. But then, the more you earn, the better off you'll be.
Exactly the same pattern emerges with a two-children family with one earner. But if you both earn, the gains increase from £288 at £20,000 to £348 at £25,000 and again at £30,000 to £576 a year. However at £70,000 a year, the gain falls to £468 and gradually declines until a £200,000 earner will be actually £168 worse off.
If you're a pensioner couple aged 73-74 the 2013 Budget will have no affect on your income if you earn under £40,000 a year. At £40,000, you'll notice a £76-a-year boost from April while at £45,000 the extra cash you'll get will be £252.
Looking ahead to 2014-15, from what we already know, very high-earners are likely to experience a small decline in their income, but only up to £120 a year if they earn £500,000 or more. Meanwhile many low earners will gain that amount.
Who is set to gain the most in the 2014-15 tax year? A pensioner couple aged 73-74 whose income is £125,000 a year. They look set to be £348 a year better off.Reuse content