The speech was lighter on announcements than past budgets as many major changes had already been announced: changes to corporation tax, a new social care levy, and an increase in National Minimum Wage.
Here are the winners and losers from today’s announcements.
Drinkers, pubs, and brewers: Alcohol and its consumers were a big beneficiary of teetotal Sunak’s budget. Sunak overhauled Britain’s alcohol duty system, which he called “a mess”. The number of rates was cut from 15 to 6, with tax now laddering up in line with alcoholic strength. That means higher taxes for stronger drinks like white cider and Italian reds. But for many drinks it means lower rates.
Sunak also froze alcohol duty for the third budget in a row and closed the gap between rates charge on still and sparkling - good news for Prosecco drinkers.
The Chancellor slashed the rate on beer and cider duty on pints pulled in the pub, knocking an average of 3p off the cost of a pint. And he extended tax relief for small brewers to cover cidermakers.
Drivers: Planned fuel duty increases have been scrapped. The tax will remain frozen at 57.95p a litre on petrol and diesel for the twelfth year in a row. Sunak said the change would save a family an estimated £15 filling up their car.
Banks: Banks were given some relief in the form of a cut to the bank profit surcharge. The levy was reduced from 3% to 8%. However, the change will not much impact in practice. The cut comes as corporation tax rises, meaning banks will be paying an effective tax rate of 28% from 2023. Challenger banks were given given an allowance of £100 million.
Investors: Blick Rothenberg say: “The biggest winners are probably investors, as there were no changes to capital gains tax or inheritance tax, something which had been widely rumoured to be on the Agenda. Though this is tempered by increase of 1.25% in tax on dividends.”
Low paid workers: Minimum wage has been raised to £9.50 an hour next year, up from the current £8.91. You might think that would be a boost but other changes elsewhere mean only the very lowest paid will benefit - and then only minimally. Calculations by tax experts Blick Rothenberg suggest a person earning £15,000 a year would see £3 shaved off their income after today’s budget. Blick Rothenberg says: “Those on Universal Credit may feel some benefit from December from the reduction in the taper... It wasn’t a great Budget in terms of benefits for individuals.”
Housebuilders: Housebuilders were hit with a £5 billion tax increase. The government announced a new 4% tax on developer profits above £25 million. The cash raised will go towards cladding remediation work.
Taxpayers: Despite eye-catching giveaways on Prosecco and fuel, the big takeaway from today’s announcement should be a large looming increase in tax. As the Office for Budget Responsibility say: “ Taking his March and October Budgets together, the Chancellor has raised taxes by more this year than in any single year since Norman Lamont and Ken Clarke’s two 1993 Budgets in the aftermath of Black Wednesday.” Britain’s tax burden will now be at the highest rate since 1950. The biggest burden falls on workers and the self-employed, who will see National Insurance contributions increase from next April.
Smokers: Hidden away in the Treasury Red Book was a 4% increase in tax on hand rolling tobacco and an additional increase in the minimum tobacco tax by 1%. The increases will cost smokers £140 million over the next five years.