CHANCELLOR Rishi Sunak is set to lay out his plans for economic recovery in the Budget next month - but some of the changes will impact our day-to-day
CHANCELLOR Rishi Sunak is set to lay out his plans for economic recovery in the Budget next month – but some of the changes will impact our day-to-day budgets.
The budget also includes any changes to booze and cigarette tax.
Senior analyst at AJ Bell, Tom Selby, told The Sun that “sin taxes” on booze and cigarettes have an “obvious appeal” to the Chancellor.
He said: “Given the parlous state of the UK’s finances it is inevitable all tax raising measures will come under the microscope ahead of the Budget.
“Although hitting pubs just as the UK economy opens up would risk being both burdensome to struggling businesses and unpopular with punters.”
What is the Budget?
THE Budget is when the government outlines its plans for tax hikes, cuts and things like changes to the minimum wage.
It’s different to the Spending Review, which sets out how much public cash will go towards funding certain departments, devolved government’s and services, such as the NHS.
The Budget is read out in the House of Commons by the Chancellor of the Exchequer. It will be Rishi Sunak’s second Budget as Chancellor.
Mr Sunak’s first one in March last year has been dubbed the “coronavirus Budget” after it focused on supporting Brits financially through the crisis, rather than the government’s “levelling up” agenda as promised in the 2019 general election.
Last month, HMRC published a report estimating how much money tax rises could generate.
It showed how a 1% change on beer and cider duty would raise £95million over three years, while tobacco would bring in £30million.
Will the price of cigarettes go up?
We don’t know yet if the price of cigarettes will go up next month.
During the Budget in March 2020, the Chancellor pushed the price of cigarettes up by 27p for a pack of 20 fags.
Mr Sunak hiked the price by an extra 2% above the current inflation rate of 1.8%.
While the Chancellor didn’t actually mention it during the Budget speech, but it was hidden in government documents outlining all announcements.
The change pushed the average pack of the most expensive cigarettesfrom £12.46 to £12.73.
The average pack of the cheapest 20-pack of fags rose from roughly £8.82 to £9.10.
Simon Clark, director of smokers’ lobby group Forest told The Sun: “Common sense suggests this is no time for yet another increase in the cost of tobacco.
“A further rise, following two tax hikes last year, would be another kick in the teeth for consumers who buy their tobacco from legitimate retailers.”
Will the price of alcohol go up?
We also don’t know yet if the Chancellor will push up the price of alcohol.
But during the March 2020 Budget, Mr Sunak froze duty on ALL alcohol for only the second time in 20 years.
Under previous policy, all alcohol prices would have risen in line with RPI inflation, which is currently forecast at 2.8%.
This means a 750ml bottle of wine would have cost 6p more, and a 70cl bottle of gin would have increased by 23p, according to the Wine and Spirits Trade Association.
For beer drinkers, the average cost of a pint would have cost 1p more.
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Read our full guide on what is expected to be included in the Budget here.
Martin Lewis revealed in January that the Budget is likely to include news on the fourth self-employed grant, despite it taking place a month after the grant period begins.
The self-employment income support scheme (SEISS) gives grants to help those who work for themselves if their income has been negatively impacted by Covid.