Emergency Budget

George Osborne delivered his first budget on 22 June 2010.

Welfare Changes

Tax credit eligibility will be reduced for households with a gross income of over £40,000.00 from April 2011. Child tax credit for those eligible will increase by £150.00 per child in April 2011 and a further £60.00 in April 2012.

Child Benefit will remain at the same level for the next three years.

Changes will be made to Housing Benefit from April 2011. Local Allowance Housing rates will be capped at £250.00 a week for a one-bedroom property, £290.00 a week for a two-bedroom property, £340.00 a week for a three-bedroom property and £400 a week for a four-bedroom property. Anyone on Jobseekers Allowance for over 12 months will have their Housing Benefit reduced by 10%, this will be introduced in April 2013.

VAT

On 4 January 2010 VAT will rise from 17.5% to 20%. VAT is a tax on certain goods and services. It is worth mentioning that some goods and services are exempt from VAT. Exemptions amongst others include books, childrens’ clothing. For more detailed information on exemptions see http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm#1

Capital Gains Tax (CGT)

CGT will rise from 18% to 28% from 23 June 2010. CGT is tax on any profit made when an asset is sold or given away. Each person has an annual exempt amount, which for the current tax year is £10,100.00 and other exemptions including your main place of residence. For more information see http://www.hmrc.gov.uk/rates/cgt.htm

The lifetime allowance for Entrepreneurs’ Relief will increase from £2 million to £5 million.

Income Tax

The personal income tax allowance will rise from £6,475.00 to £7,475.00 for the 2010/11 tax year. This means that basic rate taxpayers will have an approximate saving of £200.00 per tax year.

Banks

From 1 January 2011 a levy will be imposed on UK banks, UK building societies and the UK operations of foreign banks. This will be based on banks’ balance sheets and is designed to encourage banks to move to less risky funding profiles. Final details of this levy have not yet been published.

Courts

Proposals have been made to shut down 103 Magistrates’ Courts and 54 County Courts in England and Wales. Basingstoke does not feature in this list, but in the South West Andover and Alton Magistrates’ Courts amongst others face closure.

Further Information