Budget 2010: VAT to rise, cigarettes and alcohol unaffected
The government has unveiled the latest budget cuts and called the measures "tough but fair". The BBC says it's "the biggest package of tax increases and spending cuts in a generation", so how will this year's budget affect you?
Below are some of the changes coming into force. For full details, have a look at the Treasury's website or the BBC.
Taxes:
- From January, VAT will rise to 20%, generating £13bn by the end of this parliament.
- Capital Gains Tax will stay at 18% for low and middle-income earners but from midnight, taxpayers on higher rates will pay 28%.
- Income tax: the personal allowance will increase by £1,000 to £7,475 in April.
Cigarettes, alcohol, fuel:
- No increase on duties on these.
- By the end of the month, Labour's decision to increase duties on cider by 10% above inflation will be reversed.
Benefits:
- Child benefit will be frozen for the next 3 years.
- Sure start maternity grant will only go to the first child.
- The child element of the child tax credit will increase by £150 above inflation.
- Tax credits will be cut for families earning £40K plus next year.
Public Sector workers:
- 2 year pay freeze on staff earning more than £21,000. Those on less than that get a £250 pay rise for each of those two years.
- Operational allowance for troops in Afghanistan has been doubled to £4,800.
More sources for budget summaries:
Guardian
Telegraph
Independent
BBC
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zichi [removed]
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zichi [removed]
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OrbViper
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zichi:
Japan's also never truly recovered from it's '90s recession, so not that I want to support the Tory's rises in VAT but I think following the Japanese is just as bad an idea.
- 1 year ago
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OrbViper
