The Impact of Inflation on Your Finances

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Despite the pressure from his own party to deliver an election-winning budget, full of tax cuts and eye-catching spending promises, Jeremy Hunt didn’t have a lot of room for manoeuvre. Although the UK could well already be out of its shallow recession, Government finances are still under huge pressure after years of weak GDP growth.

The most eye-catching measure is the reduction in National Insurance, which should save the average earner a few hundred pounds a year, although for many people this will be offset by the continued freeze in income tax thresholds.

Indeed, and as with any Budget, understanding the real-world impact of the changes is near-impossible for most of us. Balancing the net effect of the likes of fuel duty cuts, tax threshold freezes, NI cuts and changes to the various “sin” taxes is going to be a challenge for even the most domestic budgeters. Although some of the changes have a more obvious impact than others, not many non-dom taxpayers are going to need a BBC budget calculator to work out if they’re worse-off or not.