December 2009

PRE-BUDGET REPORT - AT A GLANCE GUIDE

Chancellor Alistair Darling presented his Pre-Budget Report on Wednesday 9 December 2009. The main proposals are set out below.

National Insurance

A 1% increase in the NIC rates payable by employers, employees and the self employed from April 2011.

Income Tax

 Freezing the personal allowances and tax bands at the 2009/10 amounts for most tax payers.

 The introduction of a 50% additional rate of tax for those with the highest income levels.

 Changes to the complex rules for the Special Annual Allowance charge which affect those with substantial income making significantly higher pension contributions in anticipation of the removal of higher rate tax relief which will occur in 2011.

Business Taxes

The deferral for a further year of the planned increase in the small company’s corporation tax rate, maintaining the current rate of 21% for a further year.

VAT

The standard rate of VAT will return to its former rate of 17.5% on 1 January 2010.

Other

A temporary bank payroll tax of 50% is to apply to certain bonuses.