Every little helps; Severn Bridge tolls halved and more news for the region from the 2016 Budget
Whilst it may not have made national headlines, there was good news for the local region from the March 2016 Budget.
Though it won’t quite pay for our retirements or suddenly mean we can all splash out on overseas holidays, a 50% reduction in a tax is always welcome! In this case, the ‘tax’ is the toll charge on the Severn crossings, which is currently used to pay for the cost of constructing the crossings. In 2018, the cost will have been repaid and the bridges will revert to public ownership.
In recognition of this, the government has announced that the toll will fall at that point from £6.60 for a car, to £3.30, much lower than the planned reduction to £5.40, which had already been announced. If you cross the bridge on every working day in 2016 then, by 2018, you’ll be saving over £800 per year, so maybe the reduction is enough for a family holiday after all!
There were few other region specific announcements during the Budget (and certainly nothing else that may fund a holiday!), but there were other bits of positive news for our personal finances.
The personal allowance and limit for the higher rate of income tax both continued their journey towards the Chancellor’s target level, with rises to £11,500 and £45,000 announced respectively for the 2017/18 tax year.
A new form of ISA was announced, taking many of the headlines. The Lifetime ISA (or LISA), will allow anyone between 18 and 40 to save up to £4,000 a year and receive a government bonus of 25%; a very health £1,000 a year if you save the maximum amount. Whilst the accounts may rule a few of us out on age grounds, it is at least good news for the next generation and there was also a sweetener for those of us who cannot use the accounts. As a result of the introduction of the new LISA, the overall ISA limit was raised again from just over £15,000 to £20,000, thus allowing us to shelter more of our income in the tax efficient vehicles.
For businesses, there was a boost in another planned reduction in corporation tax, which will fall to 17% by April 2020. It was not all good news however. A 0.5% increase on insurance premiums was announced, with the intention of raising an extra £700m per year, which means we may well find ourselves with slightly higher insurance costs in the near future.