Budget Q&A: What does it mean for me? - Live coverage - The Independent

Budget Q&A: What does it mean for me?

Toby Ryland from Blick Rothenberg Chartered Accountants answers your questions on the Chancellor's announcements, running till 1.30pm. To ask a question, just click the 'Make a comment' box below.

  • I am a tax partner with Blick Rothenberg chartered accountants and look forward to receiving your questions on yesterday's Budget.
    3/22/2012 12:02:59 PM
  • Toby Ryland will begin answering your questions at 12.30. Please continue to send them in in the meantime.
    3/22/2012 12:12:52 PM
  • Totally confused by what's happening to the second state pension. Is it being scrapped? So will I be worse off when I retire in five years time?
    3/22/2012 12:17:29 PM
  • Q. Totally confused by what's happening to the second state pension. Is it being scrapped? So will I be worse off when I retire in five years time?

    A. The Budget announcement stated that there will be a single tier pension for future pensioners. The full details will be set out in a White Paper this spring so we do not know exactly how it will work or who it will affect.
    3/22/2012 12:22:14 PM
  • How sharply does child benefit drop off if I earn more than £50k? I'm currently just below that and wonder whether it might be worth turning down a small rise due in April.
    3/22/2012 12:26:54 PM
  • Q. How sharply does child benefit drop off if I earn more than £50k? I'm currently just below that and wonder whether it might be worth turning down a small rise due in April.

    A. The Child Benefit reduces gradually once you earn over £50k. The reduction is a loss of the benefit by £1 for every £100 that you earn in excess of £50k, so the benefit disappears entirely by the time earnings reach £60k. I would not expect it to be beneficial to turn down a payrise in order to preserve child benefit.
    3/22/2012 12:29:01 PM
  • I heard that the government is going to start making charities pay tax on contributions. Is that true? Sounds monstrous.
    3/22/2012 12:32:31 PM
  • Q. I heard that the government is going to start making charities pay tax on contributions. Is that true? Sounds monstrous.
    by JR, Southampton 12:32 PM

    A. There is no suggestion that this will occur. The concern is that tax relief may be restricted on large donations made by individuals to charity - this may make it less likely that substantial donations will be forthcoming. At present, an individual that makes a donation can deduct the amount of the donation from their taxable income so it is tax efficient to donate to charity.
    3/22/2012 12:34:20 PM
  • Retirement is imminent. Do any of these changes change recommendations for what I should do with a £100k pension pot? I don't know about Granny Tax. Grandad here is none too happy as well
    3/22/2012 12:38:49 PM
  • Q. Retirement is imminent. Do any of these changes change recommendations for what I should do with a £100k pension pot? I don't know about Granny Tax. Grandad here is none too happy as well
    by grey geezer from edgware 12:38 PM

    A. The pension changes relate to the State Pension only. They will have no effect on your personal or employer pension scheme. The effect for you is likely to be the withdrawal of Age Related Allowances which have historically given pensioners an increased personal allowance before they start paying tax on their pension or other income.
    3/22/2012 12:40:26 PM
  • I'm confused by the changes on hot food from bakeries. Does it mean I wasn't paying VAT on my lunchtime pasty but now will be? And what other establishments will be affected?
    3/22/2012 12:43:42 PM
  • Q. I'm confused by the changes on hot food from bakeries. Does it mean I wasn't paying VAT on my lunchtime pasty but now will be? And what other establishments will be affected?
    by Martin54, Chelmsford 12:43 PM

    A. This closes a loophole that was exploited largely by the supermarkets. VAT has been chargeable on hot food (ie food designed to be sold hot), but was not charged on food which was "freshly cooked" and then happened to be sold before it had cooled down. The obvious example was buying a hot chicken from the supermarket - no VAT was charged on the basis that the chicken was not being sold as a hot meal, but had to be cooked and it was incidental that the chicken was still hot when it was sold. It is this that is being stopped.
    3/22/2012 12:46:10 PM
  • I see the starting point to 40% tax has dropped to £41,450 to £42,475. Is there any good news for middle-income earners?
    3/22/2012 12:50:28 PM
  • Q. I see the starting point to 40% tax has dropped to £41,450 to £42,475. Is there any good news for middle-income earners?
    by squeezed middle 12:50 PM

    A. Middle income earners will be marginally better off (unless they happen to smoke or buy petrol!). Whilst the starting point for 40% has reduced, there has been an increase in the personal allowance to offset this.
    3/22/2012 12:51:03 PM
  • work till I drop? is there any benefit in deferring taking up my State pension then? Does it grow if I hold off claiming it for a couple of years? Or does that just make me a mug?
    3/22/2012 12:53:05 PM
  • Q. Work till I drop? is there any benefit in deferring taking up my State pension then? Does it grow if I hold off claiming it for a couple of years? Or does that just make me a mug?
    by nearly an oap 12:53 PM

    A. Generally it is beneficial in that you will get an increased pension if you defer taking it from retirement age. However, you need to consider whether a modest increase in pension in five years' time is better than receiving a smaller pension now.
    3/22/2012 12:53:59 PM
  • As a self-employed low earner, when will the higher threshold of personal tax allowance start to benefit me?
    3/22/2012 12:56:24 PM
  • Q. As a self-employed low earner, when will the higher threshold of personal tax allowance start to benefit me?
    by Tildi Baggins 12:56 PM

    A. There is an immediate increase in the personal allowance effective from 6 April 2012 - a raise of £630 to take the personal allowance to £8,105. Then there will be a further increase on 6 April 2013 to £9,205.
    3/22/2012 12:57:46 PM
  • I am an NHS nurse with superanuated pension at present. I am 55 years of age. How will this latest Budget affect me?
    3/22/2012 12:59:33 PM
  • Q. I am an NHS nurse with superanuated pension at present. I am 55 years of age. How will this latest Budget affect me?
    by susan .. prestwick edited by John Hall 1:02 PM

    A. There should be no change in respect of your pension itself as the changes announced yesterday apply to State Pensions. You should be better off due to the increase in the personal allowance.
    3/22/2012 1:06:07 PM
  • My home is worth considerably more than £2 million but was given to me as a gift through my parents' company. They will die soon and the company dissolved immeadiatly. Is it worth them closing the company now and using the money to buy my property outright. I don't want my inheritance wasted on stamp duty.
    3/22/2012 1:07:04 PM
  • Q. My home is worth considerably more than £2 million but was given to me as a gift through my parents' company. They will die soon and the company dissolved immeadiatly. Is it worth them closing the company now and using the money to buy my property outright. I don't want my inheritance wasted on stamp duty.
    by Horatio Stroganoff 1:07 PM

    A. This will involve careful calculation and will depend on your specific circumstances. It may save capital gains tax to take the property out of the company but that is not of great benefit if it results in a 40% inheritance tax charge. If inheritance tax is not payable, then a 7% stamp duty charge now may be better than a capital gains tax charge (as high as 28%) and an annual charge (essentially a mansion tax) in the future.
    3/22/2012 1:11:46 PM
  • Any good news for first-time property buyers? If there was, I missed it. If there wasn't, I'm stuck.
    3/22/2012 1:16:16 PM
  • Q. Any good news for first-time property buyers? If there was, I missed it. If there wasn't, I'm stuck.
    by falmouth 1:16 PM

    A. Nothing notable unfortunately. There are no stamp duty reductions for first time buyers but there has been the launch of the "New Buy" scheme on 12 March this year which aims to help first time buyers with only a 5% deposit obtain a mortgage to purchase a newly built home.
    3/22/2012 1:17:22 PM
  • Didn't see anything about ISAs in the Budget. Has the allowance been frozen?
    3/22/2012 1:20:21 PM
  • Q. Didn't see anything about ISAs in the Budget. Has the allowance been frozen?
    by John P, Croydon edited by John Hall 1:20 PM

    A. The ISA annual allowance has been increased to £11,280 from £10,680 with effect from 6 April 2012. Only £5,640 will be able to be saved in cash, the rest must be in stocks and shares.
    3/22/2012 1:21:05 PM
  • Currently, for persons over 65 they pay 30% tax above the allowance. Will that still be the case or will it be the same as everyone younger, ie 20% rising 40% depending on income
    3/22/2012 1:22:46 PM
  • Q. Currently, for persons over 65 they pay 30% tax above the allowance. Will that still be the case or will it be the same as everyone younger, ie 20% rising 40% depending on income
    by Frances 1:22 PM

    A. I suspect you are looking at effective tax rates (ie the proportion of income you actually pay in tax) rather than the actual rate. There are only (currently) three rates of income tax for earnings - 20%, 40% and 50%. Everybody pays at these rates but pensioners have additional Age Related Allowances meaning that they do not start to pay income tax at the same level of earnings as younger people.
    3/22/2012 1:24:07 PM
  • Will universities offer concession fees for people living on a low wage?
    3/22/2012 1:29:51 PM
  • Q. Will universities offer concession fees for people living on a low wage?
    by Beverley Anne Slade 1:29 PM

    A. There is no requirement for universities to do so. Some may offer assistance such as bursaries but these will be determined by the individual university.
    3/22/2012 1:31:24 PM
  • Ten UK cities are getting ultra-fast broadband, he said. Does that mean I'll get incentives to change my set-up. Or is this just for companies?
    3/22/2012 1:32:39 PM
  • Q. Ten UK cities are getting ultra-fast broadband, he said. Does that mean I'll get incentives to change my set-up. Or is this just for companies?
    by Jeff from IT 1:32 PM

    A. The commitment is to make an investment in infrastructure so that the ten UK cities will all have superfast broadband capability, both to homes and to businesses. However, the Chancellor did not say that the users of the broadband would not have to pay to access it!
    3/22/2012 1:35:19 PM
  • And the final question Toby will answer is....
    3/22/2012 1:37:59 PM
  • What's this about extra tax on caravans? I live in mine for 7 months of the year. What does it mean for me?
    3/22/2012 1:38:02 PM
  • Q. What's this about extra tax on caravans? I live in mine for 7 months of the year. What does it mean for me?
    by jh skegness edited by John Hall 1:38 PM

    A. This is a VAT change so will only affect you if you buy a new caravan. If the caravan is not designed or constructed with a view to being lived in all year round, then it will be subject to VAT at 20% when it is purchased.
    3/22/2012 1:38:32 PM
  • Well that concludes our Budget Q&A.

    Many thanks to Toby Ryland, a tax partner with Blick Rothenberg chartered accountants, and to everyone who submitted questions.
    3/22/2012 1:43:54 PM
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