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Budget plans for 2012/2013 announced

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The Government announced budget plans yesterday for 2012/2013 worth £683bn. Among the plans were a fuel price increase, child benefit cuts, tax breaks for people who are retired and a price increase on snacks and alcohol.

Many tax payers will unwelcome the hike in everyday costs that continue to increase each time the budget is published by the Government.

Motoring increases

Motorists will be hit hard with another petrol increase of 4p a litre from August 1st even though many motoring groups have campaigned for the increase to be scrapped. Petrol already stands at a pricey 139.65p a litre and diesel stands at 146.39 a litre. The hike in petrol prices will see a typical 70-litre fuel tank increase by £2.54 adding £60 to an annual fuel bill. The increase means the Government will be taking 63p for every £1 paid at a pump.

Road tax is also set to rise in line with inflation, for bigger cars the first years Vehicle Excise Duty Tax will exceed £1,000 to £1,030, however the increase will not affect hauliers.

Tax changes

Tax was also at the forefront of the Governments plans for the budget with every tax payer to receive a detailed statement of where their tax money is going to be spent. Pensioners are set to suffer with a tax allowance of £9,205 instead of the current tax allowance of £10,500 and families who earn over £50,000 will lose their child benefit payments.

People who retire from April 5th 2013 will be faced with the new changes of the tax allowance being reduced to £9,205 which will see many retirees paying £200 extra in tax on top of their expenses that already need to be paid.

Ian Donaldson, Managing Director of Autonet Insurance commented: “The latest budget details have highlighted added costs for motorists who will see fuel prices going up yet again. If fuel prices continue to increase motorists may start to re-think about the costs of running a car.”

© Copyright Autonet Insurance

By Amanda Bainbridge