George Osborne presented his first Budget on Tuesday 22 June 2010.
For the first time, forecasts were published in advance of the Budget. The Office for Budget Responsibility was formed in May 2010 to make an independent assessment of the public finances and the economy in advance of each Budget and Pre-Budget Report. Within the framework of these forecasts George Osborne stated that a tough but fair Budget was needed.
Many fundamental announcements have been made which affect the taxation of most individuals and these include:
An increase in the personal allowance of £1,000 from 6 April 2011 for those aged under 65 but higher rate taxpayers will not benefit due to a reduction in the basic rate band upper limit.
An increase in the rate of VAT to 20% from 4 January 2011.
A new 28% rate of capital gains tax for higher and additional rate taxpayers.
An increase in the maximum Entrepreneurs’ Relief to £5 million from £2 million.
A scheme to reduce NI contributions for new businesses in particular areas.
Corporation tax rates to be reduced and the system to be reformed.
The Annual Investment Allowance for capital allowances is to be reduced from £100,000 to £25,000 and the annual writing down allowances are to be reduced from April 2012.
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