A ‘tough but fair’
emergency Budget

Rebalancing the British economy

The Chancellor of the Exchequer, George Osborne MP, delivered on 22 June what he described as a ‘tough but fair’ emergency Budget. In his speech, the Chancellor set out his five-year plan to reduce the Budget deficit, rebalance the British economy and design a new model for economic growth.

There will be a two-year pay freeze for public sector workers earning more than £21,000, although the 1.7 million lowest paid will get a flat £250 pay rise each year. Limits will be put on the salaries of the highest paid public sector workers.

Around 880,000 workers will no longer pay income tax after the Chancellor raised the personal allowance by £1,000 to £7,475 from £6,475. Basic-rate taxpayers will be £170 a year better off as a result. Those earning more than £40,000 will not benefit because they will be subject to the rise in National Insurance contributions, a Labour policy that Mr Osborne has decided to retain.

For investors, basic-rate taxpayers will continue to pay capital gains tax (CGT) at 18 per cent and the annual exemption of £10,100 remains. Higher-rate taxpayers will now pay 28 per cent.

Child tax credits will be withdrawn for families earning more than £40,000 a year, rather than £50,000, while child benefit will be frozen for the next three years.
For business, there were reductions in corporate tax rates and proposals to consult on corporation tax reform. However, the banking sector will have to bear the cost of a new bank levy.

To read the Chancellor of the Exchequer’s emergency Budget speech in full, click here. A full content listing appears right.

A platform for
longer term recovery
Concrete measures to tackle debt

The key highlights
Emergency Budget 2010 at a glance

Capital gains tax
‘One of the most chaotic areas of tax’

Finance matters
Introducing greater efficiencies

Existing annuity rules to end
Making more flexible use of pension savings

Business matters
Mainstream corporation tax rate to fall to 27 per cent in 2011, 26 per cent in 2012, 25 per cent in 2013 and 24 per cent in 2014.

Protecting pensioners
Link with average earnings reinstated

‘Open for Business’
Corporate taxes given some respite

Small businesses
A considered approach to implementing tax reforms

Anti-avoidance measures
Plans to ‘engage informally’

Support for mortgage
interest scheme
Chancellor reflects on mortgage costs

The winners and losers
How did your finances fare?

The UK’s fiscal landscape
A new model for economic growth

Emergency Budget 2010
Chancellor of the Exchequer’s Budget speech in full

 
Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.For more information please visit www.goldminepublishing.com