22/6/2010 POSTED BY BJW
George Osborne, Chancellor of the Exchequer is delivering his emergency budget, the first from the new Conservative Liberal Democrat coalition government.
He has suggested a proposal to beat the structural deficit within 4 to 5 years through a mix of public spending cuts and tax rises.
A new version of the 80:20 rule – 80% public spending cuts 20% tax rises.
Items to highlight are:
Income tax - an increase in the personal tax free allowance for the lowest paid
VAT – an increase in VAT from 17.5% to 20% from 4th January 2011
Capital gains tax – an increase in the rate of tax for higher rate tax payers from 18% to 28% as of midnight tonight. Entrepreneurs Relief will be retained with the lifetime limit increasing to £5m.
Corporation tax – small company rates to fall from 21% to 20%. Large company rates to fall from 28% to 24% over the next four years.
Working tax credits – the threshold for qualification for WTC to fall to £40,000
