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Budget 2010: an outline summary. Pearson May News Update - Wednesday 24 March
- Budget 2010: the economy
- Budget 2010: business support
- Budget 2010: an overview
- Budget 2010: personal tax
- Budget 2010: business tax
- Budget 2010: an outline summary
Budget 2010: an outline summary
The key points of the final Budget before the next general election.
Business and personal taxes
Stamp duty threshold for first-time buyers to rise to £250,000 and to be funded by a stamp duty charge of 5 per cent on residential property sales worth £1 million or more
The 3p per litre fuel duty increase, planned for next month, is to be phased at 1p in April, followed by 1p in October and a further 1p in January 2011
National Insurance Contributions increase of 1 per cent confirmed for April 2011, although the threshold for NI payments is to rise so that nobody earning less than £20,000 will face extra charges
The top rate of income tax at 50 per cent for those earning £150,000 or more is confirmed for April 2010, along with the gradual removal of personal allowances for those earning over £100,000
No change to VAT
Inheritance tax threshold to be frozen at £325,000 for next four years
Business rates are to be cut from October for one year, meaning that 345,000 small firms will pay no business rates at all
Annual investment allowance for small firms to be doubled to £100,000
Relief on capital gains tax for entrepreneurs to be doubled
No increase in capital gains tax rates
Additional tax avoidance measures to net £500 million in revenues
Duty on cider to increase by 10 per cent from midnight on 28 March; wine, beer and spirits by 2 per cent from midnight on 28 March
Business support
State-owned banks (RBS and Lloyds) to provide £94 billion of loans, half to SMEs
A new credit adjudicator to fast track complaints from small firms that believe they have been unfairly refused credit
New national investment corporation - UK Finance for Growth - to oversee the government's £4 billion portfolio of business support funds
New growth capital fund worth £500 million to help fast-growing SMEs
Plans to increase by 15 per cent the number of central government contracts that are awarded to SMEs
Time to pay scheme, which allows firms to agree extra timetables for settling tax bills, to be extended for whole of the next parliament
Infrastructure and environment
£100 million set aside for road repairs and £285 million for improvements to motorways
Investment bank to be set up, controlling £2 billion of equity, to support investment in green projects and industries
Innovation, skills and training
A £35 million University Enterprise Capital Fund to strengthen links between university innovation and the commercial development of those innovations by spin-off companies
One-off £270 million payment to universities to help provide 20,000 more places for students studying science, mathematics and engineering
Economy
The economy contracted by 6 per cent over the recession
The Chancellor predicted that growth for 2010 would be between 1 per cent and 1.5 per cent, in line with forecasts, but revised his prediction for 2011 down to a growth rate of between 3 per cent and 3.5 per cent
The government's target figure for inflation is to remain at 2 per cent
Government finances
On the back of better than expected tax receipts and with spending in line with forecasts, the Chancellor announced that government borrowing will be £167 billion this year, £11 billion less than the previous estimate
For future years, the Chancellor predicted borrowing would stand at £163 billion in 2011, £131 billion in 2011/2012 and £110 billion in 2013/14, before reaching £74 billion in 2014/15
The reduction in the budget deficit will halve - from 11.8 per cent of GDP to 5.2 per cent - over a four-year period
The Chancellor added that the structural deficit will fall by two-thirds by the end of the next parliament
Government spending
Public sector pay settlements to be held at a maximum of 1 per cent for two years from 2011
Government departments to make £11 billion worth of efficiency savings
The Chancellor said that spending would increase in real terms by 2.2 per cent next year as already planned but that the next spending settlement, from 2011 onwards, would be the "toughest for decades".
Employment
The amount of time that the over-65s have to work in order to qualify for tax credits is to be reduced
The youth employment guarantee scheme, which ensures that anyone aged under 24 will get either a job or training once they have been unemployed for six months, is to be extended to March 2012
Savings
Plans are to be put in place to ensure that up to 1 million more people will have access to basic bank accounts in the next five years
The limits on ISAs are to increase annually in line with inflation
Tax credits and allowances
Parents of one- and two-year-old children to receive an increase of £4 a week in child tax credits from 2012
Pensioners' higher winter fuel payment of £250 and £400 for the over-80s to remain for another year
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