Times Money has teamed up with Grant Thornton, the accountancy firm, to answer your questions about the Pre-Budget Report.

If you want to know how the PBR will affect you, send your questions to budgetquestions@thetimes.co.uk . (Please include all the necessary financial information for the accountants to be able to give an accurate answer).

Due to the high volume of e-mails we expect to receive, we cannot guarantee to answer all questions.

Q: Could you explain the increase in basic rate tax benefit from £120 - £146 a year?

Mac

A: In May this year the Chancellor announced that the personal allowance (the amount you can earn before you pay tax) was to be temporarily increased by £600. This increase has now been made permanent and from April 2009 will be raised by a further £130. So the benefit for a basic rate taxpayer was £600 x 20% basic rate tax = £120, and this will now increase to £730 x 20% basic rate tax = £146.

Q: How and when is the £60 pension increase paid, and is it per person or per household?

Betty

A: The payment will be made to every pensioner, so a couple will receive £120 and the payment will be made in January, 2009.

Q: I set up my small business last November and registered for the Government's flat rate VAT scheme, which makes sense for my mainly ITC consultancy. I currently have a 1 per cent “benefit” and pay 12 per cent of the 17.5 per cent VAT. How does the Chancellor’s announcement affect flat rated businesses like mine? Do I effectively lose money?

Neill Wilkinson.

A: From December 1, 2008 you will be required to charge customers 15 per cent VAT rather than 17.5 per cent under the VAT flat-rate scheme. The flat-rate percentages will also be amended to ensure that businesses do not lose out as a result. The new percentages are available in annex E of the guide for businesses on HM Revenue and Customs' website.

Q: There were various changes to tax and national insuance contributions (NIC) contributions announced in the Pre-Budget Report - how do you think they will affect the benefits and reward strategies of UK employers?

Hayley Maskell

A: The effect of raising tax and NIC on employment income increases the need for tax efficient remuneration strategies, such as salary sacrifice schemes, and the provision of certain benefits. Childcare vouchers and effective pension arrangements will remain a key incentive for many employers. Employers will be keen to deliver tax and NIC efficient remuneration, as this will provide cost savings not only to their employees, but to themselves.

Q: There was some speculation that the £30,000 exemption for termination payments might be extended. I have seen no reference to this. Any chance it was tucked away in a press release?

Paul Rylance

A: There is no mention of a change to the £30,000 exemption in the detailed material. As such, the £30,000 exemption for termination payments remains in place.

Q: What have they done with the electricity costs? I am on a key meter and struggling to live as well as keeping warm.

Mark Hills

A: There is no change to the rate of VAT on domestic fuel. This has remained at 5 per cent. Winter fuel payments remain available to pensioners.

Q: Assistance with mortgage interest has been increased to £200,000 and includes second mortgages. Does that mean that the claimant’s second charge on their residential mortgage will attract interest relief support in all cases?

Alan Dunn

A: Support for Mortgage Interest (SMI) can be paid to people on income support, pension credit and income-based jobseeker's allowance if they are experiencing problems with the interest payments on their mortgage. The relief is extended to include second charge mortgages, that is second mortgages upon one property. Further information can be obtained from Jobcentre or Jobcentre Plus offices.

Q: How much is duty being increased on alcohol and fuel and for how long?

Jackie McLaughlin

A: From December 1, 2008 alcohol excise duty will be increased by 8 per cent on all beers, wines and spirits. This increase more than counteracts the cut in VAT, thereby preventing a reduction in the price of alcoholic drinks. Under the current legislation, duty on alcohol can be increased by a maximum of 10 per cent in a one year period. Therefore, a further large rise in the Budget in 2009 looks unlikely.

From December 1, 2008 duties on unleaded petrol and diesel will be increased by two pence per litre (ppl). This increase (the effect of which will be permanent) is intended to offset the reduction in VAT (which will be a temporary reduction). The rates will be further increased on April 1, 2009 by 1.84 ppl, and on April 1, 2010 by 0.5 ppl above inflation.

The published answers are for general guidance only and do not constitute financial advice. If you want specific advice please contact a financial advisor.