PRE BUDGET REPORT - AT A GLANCE GUIDE
Chancellor Alistair Darling presented his second Pre-Budget Report on Monday 24 November 2008. The main proposals, which included some major changes, are set out below.
VAT
VAT is to be cut from 17.5% to 15% from Monday 1 December for 13 months to 31 December 2009.
Income Tax
 A new 45% higher income tax rate is proposed for earnings above £150,000 from April 2011.
April 2010 will see a restriction in the personal allowance for those earning £100,000 or above. Those on £150,000 and over will receive no personal allowance at all.
The £120 rebate for basic rate taxpayers introduced this year is made permanent and increased to £145 from April 2009. The personal allowance for 2009/10 will be £6,475.
The basic rate tax band for 2009/10 will increase from £34,800 to £37,400.
National Insurance
From April 2011 all rates of national insurance contributions are to be increased by 0.5% for all employees and employers. The starting point is to be raised to that of income tax.
Tax Credits and Allowances
The pension credit will be increased in April from £124 to £130 a week for individuals and from £189 to £198 for couples.
Pension and child benefit increases will take effect in January, three months early, and every pensioner gets a one off payment of £60 from January while couples get £120.
Fuel and Vehicle Excise Duty
The differential first year rates on new cars will go ahead in April 2010 but controversial new rates for older cars will be phased in.
Duty rates for all cars will only increase by maximum of £5 from next year.
Business Taxes
Struggling businesses able to spread their VAT, corporation tax and NI contribution payments over a longer timetable.
Rise in small business corporation tax from 21% to 22% delayed until 2010.
A maximum of £50,000 of trading losses incurred in accounting periods ended between 28 November 2008 and 23 November 2009 can be carried back three years, starting with the latest year.
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