Budget

Emergency Budget 2010

Following the Coalition's Emergency Budget speech, we have published the following responses:

Unavoidable Budget gives competitive concessions to SMEs

Double whammy as personal allowance claw back stays in place

Pensions reliefs must be equitable

More losses than gains in Capital Gains Tax

Death and taxes: Capital Gains Tax pitfalls

Urging greater caution around business sales

Tax simplification: about time too!

Long cigarettes and anti-avoidance

Emergency Budget publications

Emergency Budget Summary 2010

Emergency Budget Tax Data Card 2010

The 'unavoidable Budget'

George Osborne described his first Budget as 'the unavoidable Budget' in which spending cuts outweighed tax increases by a ratio of 77% spending cuts to 23% tax increases.

Capital gains tax (CGT) rates for higher rate tax payers are to increase to 28% from midnight tonight (22 June). The rate of tax for CGT will remain at 18% for taxpayers with income and gains below the higher rate tax threshold (currently £37,400). The annual exemption will stay at £10,100 and will continue to be indexed in future years. Capital gains qualifying for entrepreneurs' relief will continue to be taxed at 10% but the lifetime limit rises from £2million to £5million.

The main rate of corporation tax will be reduced from 28% in annual 1% reductions over four years starting next April and the small companies' rate will be cut to 20% from April 2011. From April 2012, capital allowances on plant and machinery are to be scaled back from 20% to 18% a year and from 10% to 8% a year for long life assets. The Annual Investment Allowance will also be reduced from £100,000 to £25,000 from April 2012.

The income tax personal allowance will rise from April 2011 by £1,000 to £7,475, but higher rate tax payers will not benefit from this change. On pensions tax relief, the government is reviewing the complex provisions that limit higher rate tax relief for people with high incomes from April 2011. They are considering introducing an annual allowance of between £30,000 and £45,000. The government will also consult on ways to change the current rules that effectively force people to buy annuities with their pension funds at age 75, and have immediately increased the age to 77 for those who are not yet 75.

There are to be substantial changes to the tax credits system, reducing the numbers of people who can claim and the amounts of tax credit to which they may be entitled.

The standard rate of VAT is to rise from 17.5% to 20% with effect from 4 January 2011 and is expected to raise about £13billion extra revenue - the largest single revenue increase of all the provisions announced in this Budget.