A quick look at some of the other tax changes in this week’s budget

Child Benefit

Under the current system, if at least one parent earns £50,000 a year, they will start to lose child benefit and if they earn over £60,000 a year, it will be taken away entirely. This means that if, for example, you have a household where each parent earns £49,000 (a household total of £98,000), then full child benefit is available. However, if you have a household where one parent earns £61,000, they will receive no child benefit. This unfairly impacts single parent households and households where one parent may have chosen not to work to help bring up the children.

The Chancellor has tried to redress this problem firstly by upping the threshold to £60,000 with tapering up to £80,000 but also by announcing that a new system based on household income will be introduced by April 2026. Such a system does pose some logistical problems for HMRC due to the way that individuals are taxed separately and independently in the UK and not as households or couples.

ISAs

A new ‘British ISA’ due to be rolled out for individual savers to invest in UK-listed companies. We don’t yet know which investments will qualify, or indeed who it will benefit. In short, it is an ISA that allows the saver to invest an additional £5,000 a year tax free in UK assets. This would be on top of the existing £20,000 tax free, but only if it is invested in British assets.

This is currently only in the consultation phase and not expected to be rolled out until 2025.

VAT Thresholds

VAT thresholds were raised to £90,000 from April, up from £85,000, hopefully removing some of the bureaucracy faced by SMEs and stimulate some fiscal growth in the sector.