UK Budget Today

Budget: Tough tax rises and spending cuts expected

David Cameron, George Osborne, Nick Clegg and Danny Alexander in the Cabinet room at No 10 Downing Street The Budget is likely to prove a crucial moment for the government

The toughest package of tax increases and spending cuts in a generation is expected to be unveiled by Chancellor George Osborne in his first Budget.

He will say the measures - designed to tackle Britain's record deficit of £155bn - will be based on fairness, with the better-off paying more.

Middle class benefits and public sector pay may be hit but 900,000 low earners will be taken out of the tax system.

http://www.telegraph.co.uk/finance/financetopics/budget/7510939/Budget-2010-key-points.html

Budget 2010: key points
George Osborne delivered Britain's most important Budget in a decade today - read the key points below.

Published: 1:32PM BST 22 Jun 2010

The Chancellor called the measures in this historic Budget "unavoidable," and announced the following measures:

Tax:

VAT rises to 20pc from 17.5pc from January 2011

Food, children's clothing and other VAT-free items remain exempt from VAT for current Parliament

Capital gains tax (CGT) to rise for higher-rate taxpayers to 28pc from midnight

Capital gains tax to remain at 18pc for basic-rate taxpayers

CGT exempt amount remains at £10,100 this year

Personal income tax allowance increased by £1,000 in April to £7,475

Higher rate income tax rate remains frozen to 2013/14

Sin taxes:

No new increase on alcohol, tobacco or fuel

Planned increase in cider duty to 10pc above inflation scrapped from end of June

Deficit and debt:

Deficit in balance in by 2014/15

Parliament to ensure debt falls as a share of GDP by 2014/15

Budget deficit to be £149bn in 2010/11

Budget deficit to be £116bn in 2011/12

Net debt to be 62pc of GDP in 2010/11

Net debt to peak at 70pc of GDP in 2013/14

Debt interest payments to cost £250bn by 2015

Public sector cuts and benefit reform:

Basic state pension linked to earnings from April next year

Pensions guaranteed to rise in line with with earnings, prices or 2.5pc, whichever is greatest

Two year pay freeze for public sector workers

The Government will accelerate the increase in state pension age to 66

Child benefit to be frozen for next three years

Child benefit removed from families on an income of more than £40,000

Benefits to rise in line with consumer prices

Tax credits reduced for families earning mroe than £40,000

Housing benefit restricted to maximum £400 a week

Medical assessment for Disability Living Allowance from 2013 for new and existing claimants

Spending:

Government spending will be £637bn in 2010/11

Government spending will be £711bn in 2015/16

Growth:

UK economy to grow by 1.2pc in 2010

UK economy to grow by 2.3pc in 2011

UK economy to grow by 2.8pc in 2012

Unemployment:

Unemployemnt to peak at 8.1pc in 2010/11

Unemployment to fall each year to 6.1pc in 2015

Business:

Corporation tax cut to 27pc next year

Corporation tax cut by 1pc point a year for next three years to 24pc

Small companies tax rate cut to 20pc

Tax relief for video games industry scrapped

UK bank and building society levy from 2011

Levy also on UK operations of foreign banks

Smaller banks not liable for a levy

Banks levy expected to raise more than £2bn a year

10pc CGT rate for entrepreneurs extended to first £5m of qualifying gains

lepidoptra wrote:Arjay
Excellent post keeping all us Brits up to date. No real surprises and all in all I think a good budget (unless you're a socialist)
Lets hope it will restore confidence with other countries and who knows the GBP may strengthen giving us more Baht