Budget Update June 2010
The latest budget was revealed by the Chancellor on 22 June 2010. Here is a summary of the key points:
VAT will be raised to 20% from 4 January 2011.
Capital gains tax will increase to 28% for higher rate taxpayers from 22 June 2010 but remain at 18% for low and mid income savers. The £10,100 annual exemption will remain.
Corporation tax is to be cut by 1% a year over the next four years, taking it to 24% by 2014-15. Small companies tax rate to be cut to 20 per cent. The Enterprise Finance Guarantee Scheme is to be extended.
The Chancellor has also scrapped SDLT on homes costing £250,000 or less for first-time buyers. The existing nil rate of SDLT on residential purchases not exceeding £125,000 and commercial purchases not exceeding £150,000 continues to apply as before (which means that it is not limited to first-time buyers).
Housing benefit will be limited to £400 a week for a four bedroom house and £280 a week for a one bedroom house. The move is intended to save £1.8 billion a year by the end of the Parliament.
Banks will be charged a £2 billion-a-year levy.
The Chancellor increased the income tax threshold by £1,000 to £7,475.
Child tax credits and child benefits will be frozen for 3 years.
The link between the state pension and earnings which had been abolished by Margaret Thatcher was restored and, in a £2 billion move, the Chancellor increased child tax credits to the lowest-earning families by £150 above inflation.
Other benefits to be cut include the health in pregnancy grant while the Sure Start maternity grant will be restricted to the first child only and lone parents will be expected to look for work when their youngest child goes to school.