Tomorrow's statement should provide more clarification on what has already been announced in this year's Budget, as well the rumours and leaks that followed.
- Announced in the 2013 Budget, the tax free personal allowance is set to rise to £10,000 from 6th April 2014. There has been internal wrangling to raise this further, so further increases possible.
- Further rises in the tax free personal allowance were set to rise by inflation (CPI), however with a Lib Dem plan to match the amount of tax free income with the minimum wage (£12,500), this might have to change, for the short term at least.
- Recent years have seen allowance rises lead to a reduction of the limit at which the higher rate threshold takes effect. So, any rises above the planned (1 percent) will push more people into the 40 percent tax band.
- Married couples were promised a tax break with the transferable tax free allowance of up to £1,000 - we should get more information about this tomorrow.
- Class 2 National Insurance Contributions, which are paid by self employed people at a weekly rate (either by direct debit or one-off payment), may be integrated and paid at tax return time.
- The Government has been consulting about simplifying tax for a while now, and continues to do so. Expect to see more information on what has been learned.
Fuel and Energy
- Planned fuel duty price rises of 3 pence per litre were stopped in the Budget, but we await confirmation whether they resume from next September.
- After much recent debate over rising energy costs, the Government has responded with plans to alter green levies to help bring bills down. The average household combined electricity/gas bill should reduce by £50 per annum. Expect more information about this.
- Inflation linked rise in the Max ISA limit would see it rise to £11,880 - expect further changes or confirmation.
- From 6th April 2014, the basic state pension may rise by 2.7 percent in response to rising living costs. The new state pension should be £113.10 per week.
- Tax relief people can claim when making pension contributions will be restricted to a maximum of £1.25m contribution limit over a lifetime - and only £40,000 of contributions per tax year.
Childcare and Education
- More information about the new childcare cost support system being introduced from late 2015.
- From the start of the autumn term 2014, infant in state schools in England are due to receive free school dinners. A saving of around £400 per child per year, and a cost to the Government of £600 million per year.
- In last year's statement, rises in working age benefits and tax credits were capped to 1 percent per year until 2015-2016.