December Budget Report Summary

Wednesday, December 9th, 2009 | Market Updates | No Comments

The main points are listed at-a-glance below.

Nothing of any great surprise or substance, unless you have a wind turbine, are looking for an electric company vehicle or are classified as a “banker”:

TAX

• Personal allowances frozen at 2009/10 levels
• Inheritance tax nil rate threshold frozen at £325,000
• 1p increase in corporation tax for small companies to be deferred
• All national insurance rates to rise by a further 0.5% from April 2011
• Pensions higher rate tax relief further restricted for incomes over £130,000
• VAT to return to 17.5% from 15% from 1 January 2010.
• One-off 50% tax on banker’s bonuses of more than £25,000
• Stamp duty holiday on certain properties to end on 1 January 2010
• Bingo duty to be cut from 22% to 20%

PENSIONS AND BENEFITS

• Basic state pension will rise by 2.5% in April 2010
• Contributions to public sector pensions to be cut by £1bn a year

ECONOMIC FORECASTS

• Growth of 1%-1.5% expected in 2010 and 3.5% in 2011 and 2012

• Estimated public loss from bank bailouts reduced from £50bn to £10bn

• Total spending in 2010-11 to rise by £31bn

OTHER

• Electric cars to be exempt from company car tax for five years

• New 50p tax on landline phones to pay for superfast broadband