10 December 2009

Pre Budget Summary

Chancellor Alistair Darling presented his Pre-Budget Report on Wednesday 9 December 2009.

Mr Darling spoke of the Report taking place at 'a critical time for our economy' and that the task was 'to secure the recovery and promote long-term growth'.

This summary concentrates on the main tax measures which are being introduced:

• a 1% increase in the NIC rates payable by employers, employees and the self-employed from April 2011

• freezing the personal allowances and tax bands at the 2009/10 amounts for most taxpayers

• the introduction of a 50% additional rate of tax for those with the highest income levels

• changes to the complex rules for the Special Annual Allowance charge which affect those with substantial income, making significantly higher pension contributions in anticipation of the removal of higher rate tax relief which will occur in 2011

• the deferral for a further year of the planned increase in the small companies corporation tax rate, maintaining the current rate of 21% for a further year

• the standard rate of VAT will return to its former rate of 17.5% on 1 January 2010

• a temporary bank payroll tax of 50% is to apply to certain bonuses (in whatever form).

If you would like further help with any of the above or further advice please contact our Tax Partner, Linda Warner