Summary of Emergency Budget 2010 from George Osborne
Published ¤ 22/06/2010 15:19:38
This is a summary of the main points from George Osborne's first budget.
The rate of VAT will rise from 17.5% to 20% from January 4, 2011.
Capital Gains Tax (CGT) remains at 18% for low and middle-income savers but from midnight, higher rate taxpayers will pay 28%. The capital gains tax "entrepreneurs relief" rate of 10% on the first £2m of gains will be extended to the first £5m.
Personal income tax allowance to be increased by £1,000 in April to £7,475 - worth £170 a year to basic rate taxpayers. It is expected that 880,000 of the lowest-paid will be taken out of income tax altogether.
Councils which propose low council tax increases will be offered extra funds to allow them to freeze the tax for one year from April 2011.
No change this time round. Labour's plan to increase the duty on cider by 10% above inflation will be scrapped from July. This should please the Lib-Dems!
A "landline tax" to fund the rollout of fast broadband will be scrapped - instead the government will support private investment, partly funded by the digital switchover under-spend within the TV licence fee.
Child benefit will be frozen for the next three years.
Tax credits will be reduced for families earning over £40,000 next year.
Low income families will get more Child Tax Credit - the amount per child will rise by £150 above the rate of inflation next year.
New maximum limit of £400 a week will be applied to Housing Benefit, to save £1.8bn a year by the end of the Parliament.
Health in pregnancy grant to be abolished from April 2011, the Sure Start maternity grant will be restricted to the first child.
Lone parents will be expected to look for work when their youngest child goes to school.
From 2011 - except for the state pension and pension credit - benefits, tax credits and public service pensions will rise in line with the Consumer Price Index, rather than the, generally higher, Retail Price Index, saving over £6 billion a year by the end of the Parliament.
The government will introduce a medical assessment for Disability Living Allowance from 2013 for new and existing claimants.
The welfare shake-up will save £11bn by 2014/15.
Public sector workers face a two-year pay freeze, although 1.7 million of those earning less than £21,000 will get a flat pay-rise worth £250 in both years.
The basic state pension will be linked to earnings from April 2011, with the pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater.
The government will accelerate the increase in state pension age to 66.
From April 2011, the threshold at which employers start to pay National Insurance will rise by £21 per week, above indexation.
Corporation Tax will be cut next year to 27%, and by 1% annually for the next three years, until it reaches 24%.
The small companies' tax rate will be cut to 20%.
A bank levy will be introduced, which will apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks from January 2011. But smaller banks will not have to pay. It is expected to raise over £2bn a year.
For more details, please visit the BBC website.
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