In our previous blog, we laid out the budget in ‘simple’ terms – just as George Obsorne intended to do…. If you missed it, please see click here

Unfortunately after exploring further, we’ve found a few points that we failed to hear during the Chancellor’s speech last Tuesday – with each new report, it becomes more and more apparent that these spending cuts and tax rises will impact for years.

• The main point on his agenda was the VAT rise pushing our current rate up from 17.5% to 20%. Although this is not being implemented until January next year, it will in time, affect not just the consumer but also the retailers too. We’re likely to see a surge of ‘panic’ buyers who intend on relying on the ‘buy now, pay later’ motto which will simply not help existing debt problems most of our clients find themselves dealing with.

• Another sticking point was the Tax Credits being reduced or even removed for families with a household income of £40,000+ next year. However, upon further inspection, in 2011 the household income is looking to reduce to £21,000. Now…. With escalating childcare costs and the increase in living costs – is £21,000 a reasonable limit to end or substantially reduce Child Tax Credits?

•  Fuel, Alcohol and Tobacco – whilst Mr Osborne said there would be ‘no rises’, he failed to point out the fact that the scheduled 1p per litre fuel rise is still on the cards in October this year as well as alcohol and tobacco rising 2% above inflation in April 2011.

Unfortunately, this emergency budget will hit most of us in the pocket as our country struggles to repay the deficit and by all means, its going to be no easy task - if you are struggling with your debts even now before most of these changes take place, NOW is the time to seek advice and try to get your finances in order.