From the introduction of a sugar tax, to increasing Insurance Premium Tax (IPT), and freezing fuel duty for the sixth year running, George Osborne announced an array of changes to the taxes we pay.
Moneywise rounds up what’s been announced:
Sugar levy to be introduced. From April 2018, the government will charge a sugar levy on producers and importers of soft drinks. A consultation on how exactly this will work is to be launched this summer, but ultimately this could push up soft drink prices.
Mr Osborne said some companies “may choose to pass the price onto consumers and that will be their decision.”
Fuel duty to remain frozen. The Government will freeze fuel duty, which we all pay for in petrol and diesel prices - at 57.95p per litre for 2016/17.
It’s the sixth successive year it’s been frozen (since March 2011) and the government says this will see the average driver save around £75 per year compared to pre-2010 fuel duty escalation plans.
Insurance Premium Tax (IPT) to rise. IPT will rise from 9.5% to 10% from 1 October 2016. It’s a tax on insurers but this is typically passed onto consumers. The Government says this 0.5% increase will result in an average £1 annual increase on a combined home and contents policy and an average £2 annual increase on a car insurance policy.
The increase in IPT is to fund investment in flood defence and resilience measures. It last rose on 1 November 2015 where it increased from 6%.
Freezing alcohol duties. The duty on beer, spirits and most ciders will be frozen this year, while the duty rates on most wines and higher strength sparkling cider will increase by RPI from 21 March 2016.
Tobacco duty to rise. As announced at Budget 2014, duty rates on all tobacco products will increase by 2% above RPI inflation. Duty on hand-rolling tobacco will also increase by an additional 3% above this rate, to 5% above RPI. These changes come into effect from 6pm on 16 March 2016.