George Osborne has made his budget, and a lot of people will find their wages frozen. Buy as many goods as you can afford before VAT increases to 20%
Conservatives seem to have gone for a coalition in order to deliver a harsh budget?
How are you affected – please use the comments facility here to put your point of view on the world wide web!
From the Telegraph Paper
Budget 2010: the winners
Are you a winner in the emergency Budget, which aims to be “tough but fair”?
= Income tax payers =
Around 880,000 workers will no longer pay income tax after the Chancellor raised the personal allowance by £1,000 to £7,475 from £6,475. Basic-rate taxpayers will be £170 a year better off as a result. Those earning more than £40,000 will not benefit because they will be hit by a rise in National Insurance contributions, a Labour policy that Mr Osborne has decided to retain.
Investors who are basic-rate taxpayers can breathe a sigh of relief: the Chancellor has watered down his plans to raise capital gains tax to 40pc or even 50pc. Basic-rate taxpayers will continue to pay CGT at 18pc and the annual exemption of £10,100 will remain. Higher-rate taxpayers will pay 28pc. Mr Osborne said the Treasury believed that any greater increase in CGT would have led to a fall in revenues.
Jamie Matheson, the executive chairman of Brewin Dolphin (LSE: BRW.L – news) , the stockbroker, said: The retention of the annual CGT-free allowance will be hugely welcomed. The savers affected, many of whom are retired, will continue to manage their portfolios according to their circumstances and to benefit from paying CGT at 18pc.
There will be no new increases in duties on alcohol, while the proposed 10pc rise in duty on cider will now not be introduced.
Fuel duty is to be frozen.
Anyone who sets up a new business outside London, the South East and the east of England will be exempt from £5,000 of National Insurance contributions for each of the first 10 employees they hire.
Increases to the basic state pension will be in line with earnings from April 2011. Pensions will rise by at least 2.5pc every year.
There will be no rise in tobacco duty.
Budget 2010: the losers
Are you a loser from George Osborne’s emergency Budget, which promises “not to hide hard choices”?
Public sector workers
There will be a two-year pay freeze for public sector workers earning more than £21,000, although the 1.7 million lowest paid will get a flat £250 pay rise each year. Limits will be put on the salaries of the highest paid public sector workers.
A new government commission, led by John Hutton, the former Labour defence secretary, will examine the cost of public sector pensions and will publish an interim review in September. One solution to ease the burden of public sector pensions on the state is to increase workers’ contributions.
Child tax credits will be withdrawn for families earning more than £40,000 a year, rather than £50,000, while child benefit will be frozen for the next three years.
The baby element of the tax credit known as Sure Start, which is a one-off payment to help towards the costs of a new baby will be abolished.
The health in pregnancy grant of £150 will be scrapped from April 2011. The Government said it expected lone parents to look for work when their first child goes to school.
The main rate of VAT will rise from 17.5pc to 20pc from January 4 2011. This will generate more than £13bn of extra revenues. Food and children’s clothing will remain exempt.
From midnight, higher-rate taxpayers will see the rate of capital gains tax rise to 28pc from 18pc, while the annual exemption of £10,100 will remain in place. Basic-rate taxpayers will continue to pay CGT at a rate of 18pc.
Those on housing benefits
Housing benefit is to be cut by £1.8bn by the end of this parliament. The measures include benefit being limited to a maximum of £400 per week for a four-bedroom or larger house.
Those on disability living allowance
A medical assessment for new and existing claimants will be introduced to ensure that only those who need it can claim it. Three times as many claim as when the benefit was introduced 18 years ago. It costs £11bn a year.