I now have to pay income tax on my state pension. Am I alone?published at 14:08 Greenwich Mean Time 7 March

14:08 GMT 7 March

Kevin Peachey
Cost of living correspondent

Trev in Eastbourne asks: My state pension increase takes me over the basic personal allowance for tax purposes, which means that I now have to pay income tax on my state pension “benefit” due to the freezing of tax thresholds. Am I alone? (NB: People can have income of up to £12,570 before paying income tax., external)

Far from it, Trev. Economists at the Institute for Fiscal Studies – an independent think tank – point out that well over 60% of pensioners pay income tax.

Trev is correct to point out that some have been dragged into paying tax since tax thresholds were frozen in 2021.

The IFS says most taxpaying pensioners will typically be £650 a year worse off by 2027 as a result.

Ministers say this shouldn’t be taken in isolation, because pensioners have benefitted from extra help like cost-of-living payments.

What's happening to child benefit?published at 14:04 Greenwich Mean Time 7 March

14:04 GMT 7 March

Kevin Peachey
Cost of living correspondent

Our first question is from Ian, who asks: Is the increase in the threshold for child benefit from £50,000 to £60,000 for any individual parent, or is it worked out on both parents' income added together?

The threshold is based on one parent, not the combined income of two parents.

So, from April, two parents earning £59,000 each (£118,000 in total) will still get full child benefit. A single parent, or single earner, on £80,000 won’t receive anything.

That’s considered unfair, and is why the chancellor said he wanted to change to a system of household income by April 2026.

But, in the meantime, the threshold at which child benefit starts to be withdrawn has been raised from £50,000 to £60,000.

In other words, if one parent earns more than £60,000, then they have to pay back some of the child benefit they receive.

More is taken as you earn more above that level. So, if one parent earns more than £80,000 a year from April, you have to pay it all back. This threshold has been raised from £60,000 currently.

Image source, .

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Standby - our Your Questions Answered session on the Budget is about to begin.

We've been compiling all your burning queries over the last two days. Our correspondents are now poised to answer them, and dive deeper into what the Budget means for you and your finances.

Stay with us.

Image source, PA Media

Elsewhere in his Budget, the chancellor talked of digitising all health records and using AI to help the NHS do more for less.

Dr Adrian Hood, a consultant radiographer at the Huddersfield Royal Infirmary, has been speaking to BBC Radio 4's World at One programme about how AI is currently changing the way they work.

"The first iteration that we have of this programme is when we take a chest X-ray. The image is sent to the server for the company which runs the AI. They assess the X-ray and in some cases they can return a report within eight seconds," he says.

"That can say 'this is a normal X-ray', or it will flag it and say 'we think this has a lung cancer'. It flags it for us and we know we need to look at it ahead of some of the others."

A GP X-ray is usually turned around in seven days, Dr Hood adds.

Some more political reaction to bring you, this time from the work and pensions secretary, who says it's critical to get productivity up in the UK - a centrepiece of Jeremy Hunt's Budget.

Mel Stride tells BBC Radio 4's World at One programme he has seen the benefits of AI technology in his own government department.

"We have a huge amount going on around AI and machine learning," he says.

"For example we have processes we have developed in reading 20,000 pieces of correspondence in a matter of hours rather than weeks and doing it in an intelligent way which identifies more vulnerable customers who we are then better able to help."

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In less than an hour - from 14:00 GMT - our correspondents start to answer your Budget queries on this page, in our Your Questions Answered session.

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Why are the Tories suggesting they want to go further on NI?published at 13:13 Greenwich Mean Time 7 March

13:13 GMT 7 March

Henry Zeffman
Chief political correspondent

There was a brief moment during Jeremy Hunt’s Budget statement yesterday where it almost sounded as if he was shaping up not just to cut national insurance, but to abolish it altogether.

"The way we tax people’s income is particularly unfair," the chancellor said, decrying the combination of income tax and national insurance as a “double taxation of work” and a “complicated system that penalises work instead of encouraging it.”

As it turned out, Hunt did not abolish national insurance. Though he did harden his rhetoric still further later, writing to Conservative members that he wanted to "make progress towards that goal in the next parliament".

It prompted some to wonder whether this might make it into the Conservative election manifesto as something firmer: a pledge rather than, as it stands, a rough aspiration.

Labour have gleefully seized on the notion, attacking it as a bigger unfunded tax cut than those in Liz Truss’s 2022 mini-budget.

This morning, though, Hunt has been playing down the possibility this will happen anytime soon.

So why raise it? Hunt may take the view that, however unspecifically expressed, this offers a clear signal of intent to the public about the Conservatives' desire to cut taxes.

The political risk is that the long-term goal is fatally undermined by the short-term reality of an unprecedented tax burden.

Speaking from a pub in South Yorkshire, Prime Minister Rishi Sunak says that abolishing National Insurance in the next Parliament is a "long-term ambition" of his.

The suggestion that the contributions might be scrapped was widely discussed by Labour across outlets this morning. Sir Keir Starmer accused the chancellor of a £46bn "unfunded commitment" if NI was scrapped.

But Sunak says there is an "unfairness" for those working, where "you pay tax twice, once in income tax and then again in National Insurance".

Sunak says his "ultimate ambition" is to remove this unfairness "entirely".

"If we stick to our plan," he adds, they'll deliver the £900 of tax cuts this year and "make progress towards that long-term ambition over time in the next Parliament."

All day, we've been reporting on reaction to yesterday's Budget - including from the Institute for Fiscal Studies, a leading economic research group.

Its director Paul Johnson says the Budget didn't change anything significantly. And he has this warning for whichever party forms the next government:

"Just to stop debt rising, we need to run a substantial primary surplus - that is, to raise more in tax and other revenues than we spend on everything other than debt interest.

"That’s something we haven’t done as a country since 2001. It’s a tough ask."

Johnson adds:

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Here are some of the key moments from the Sunak-Vine exchange.

• Sunak defended the level of national debt, insisting it's due to circumstances outside his control (the pandemic and war in Ukraine). He said debt levels are "way lower" than when he started
• The prime minister defended National Insurance cuts, asserting they help all workers
• We are none the wiser on when the general election will be held - Sunak said what "matters at the election is the choice"

Coming towards the end of the interview, Sunak insists the government "want to finish the job with Rwanda".

Sunak tells BBC Radio 2's Jeremy Vine he believes the UK "really has turned a corner on the economy".

He adds: "Our plans our working, they are delivering change."

Finally, Vine asks Sunak if it is still the PM's working assumption there will be a general election in the second half of this year.

Sunak laughs, but doesn't give a straight answer. Instead, the PM says what "matters at the election is the choice".

Sunak is now being asked about his party's polling figures, with the Tories some 20 points behind Labour.

"The only poll that ultimately matters is a general election," Sunak says. He explains that he is confident that his plans as he refers to areas such as his government's stance on illegal migration and what is being done to improve the health service.

The prime minister says his government has "really turned a corner" with the economy and people will be able to have a "renewed sense of pride" in the UK.

Vine puts to Sunak that his government is actually sticking to Labour's plan, because it was Labour that first came out with the plan to abolish the so-called "non-dom" regime.

As a reminder, a 'non-dom' refers to a UK resident who's permanent home for tax purposes it outside the UK. Jeremy Hunt then announced the regime was being phased out in the Budget.

"It was all part of our plan to make sure that we can reward hard work and make sure that we can cut taxes responsibly," Sunak says.

When Vine pushes him on taking Labour ideas, Sunak responds by talking about the NHS and saying his plan is to invest more in the health service and to keep bringing taxes down.

"Labour don't have a plan," Sunak says.

We're now onto a discussion about the big announcement from yesterday's Budget.

Vine accuses Sunak of zeroing in on National Insurance cuts while people earning less than £26,000 will end up paying more because of so-called "fiscal drag", in other words because tax thresholds have been frozen.

Sunak disagrees and argues that the NI cuts do help all workers and that difficult decisions had to be made in the context of the pandemic and the Ukraine war.

"Nothing comes for free, of course it doesn't," the prime minister adds, but says that those decisions were the right ones and that he wants to go further in NI cuts and that the long-term ambition is to get rid of it.

"I want a simpler, fairer tax system," he says, adding that working people are being taxed twice, something the chancellor has repeated since yesterday's Budget.

The prime minister is asked about analysis which suggests the tax burden is at its highest since 1948.

Sunak replies and says "fair-minded people will realise we have been through two once-in-a-century" events: the pandemic - which resulted in the furlough scheme - and rising energy prices triggered by the war in Ukraine.

"Again the government stepped in to stem some of that increase," Sunak said adding the government is now in a position to responsibly cut people's taxes".

"Those tax cuts are significant," Sunak says, adding he believes "strongly [that] hard work should be rewarded" and his plan is working.

Asked further about debt levels, the prime minister says it was right that the government stepped in during Covid.

He says that he was very clear that fiscal rules, which are verified independently, are being met and he says debt levels are forecast to fall next year.

Sunak says debt levels are "way lower" than when he started his job. Sunak goes on to say that wages are growing and the economy "outperformed expectations", with mortgages coming down.

Image source, Reuters

Presenter Jeremy Vine kicks off his questioning of Rishi Sunak on Radio 2 by asking about national debt.

It's now £2.6 trillion, Vine says, and still going up.

Sunak replies, saying that "everyone recognises the context", and points to the Covid pandemic and war in Ukraine.

Speaking to Vine from a Yorkshire pub, Sunak says the government "stepped in to support the country", and that's had an impact on debt levels.

Overall debt will start falling next year, Sunak says, adding "we are securing the future of the country".

Prime Minister Rishi Sunak is on the line with Jeremy Vine over on Radio 2, speaking about yesterday's Budget announcement.

Stick with us as we bring you his comments live. You can also listen in by pressing the Play on the button above.

Are we better off? Or worse off?published at 12:00 Greenwich Mean Time 7 March

12:00 GMT 7 March

Robert Cuffe
Head of statistics

You couldn’t be blamed for being confused with politicians taking to the airwaves to tell us that taxes are higher and others telling us they’re lower.

The reason these seemingly opposing claims can be correct is that they each focus on one small part of the overall picture.

On balance, this year's announcements cut taxes. But they come on top of a few years of tax rises that have a bigger effect.

On average, for every £1 workers have gained from recent National Insurance cuts, they lose £1.30 due to income tax changes since 2021, according to the independent Institute for Fiscal Studies think tank.

When you add that to a picture where pre-tax wages have only barely kept pace with rising prices since 2019, then it's no wonder if you’re feeling poorer now than back then.

Reaction to yesterday's Budget is continuing to pour in - including from charities which represent various groups of people.

The Trussell Trust has described the Spring Budget as offering "short-term sticking plasters", external for those on the lowest incomes, with "unprecedented numbers" of people unable to afford essentials such as food, heating and clothing.

The food bank charity welcomed a six month extension to the Household Support Fund, which was due to conclude at the end of the month, as well as steps to reduce the burden of debt for households on the lowest incomes.

But senior policy and public affairs manager Rory Weal said both measures fell short of providing “long-term solutions that address the continued issues of poverty, hunger and hardship”.

He added that “most of the gains from yesterday’s tax cuts will go to people on middle and higher incomes”.