KEY POINTS FROM 2009 APRIL BUDGET
I know it's a bit dry but the budget affects all of us - so I thought I'd publish a summary for you - hope it helps!
The Chancellor used the Budget speech to cut his growth forecasts. The economy is now expected to contract by 3.5pc this year, but grow 1.25pc in 2010. This would mean growth starting towards the end of this year.
National debt as a percentage of GDP, including the cost of stabilising the banking system, will increase from 59pc this year to 68pc. It will rise to close to 80pc by 2013/14 - twice the level Labour inherited in 1997. The Chancellor expects underlying current budget deficit to come back into balance two years later.
RPI inflation is forecast to remain negative, falling to minus 3pc by September, before moving back above zero next year.
Inflation is expected to continue falling sharply, reaching 1pc by the end of this year. The Bank of England inflation target remains unchanged at 2pc.
The UK's current deficit is expected to halve within four years.
Income tax
- A new 50pc tax rate for those earning more than £150,000 to take effect from next April - a year earlier than planned.
- There will be no income tax increases this year.
Pensions
- From April 2011, pension tax relief for those with incomes over £150,000 will be restricted so it is gradually tapered to the 20pc rate.
- Personal allowances are to be fully withdrawn for those with incomes over £100,000 from next April.
- The Chancellor confirmed his commitment to increase the basic state pension by at least 2.5pc, regardless of the Retail Price Index.
- Capital disregard on Pension Credit is to be raised from £6,000 to £10,000 from November 2009.
Sin taxes
- Fuel duty will increase by 2p per litre in September and then by 1p a litre above indexation each April for the next four years.
- Alcohol duties will go up by 2pc from midnight tonight.
- Tobacco duty will rise by 2pc from 6pm tonight.
- Sin taxes are forecast to raise over £6bn by 2012.
Education
- £250m will be provided this year and £400m in 2010/11 for an additional 54,000 places in sixth form and further education colleges, with consequential provisions for Scotland, Wales and Northern.
Homes
- A scheme will be introduced to guarantee securities backed by mortgages in a bid to increase lending.
- The stamp duty holiday on properties sold for less than £175,000 will be extended until the end of the year.
- An extra £80m is to be given to the HomeBuy Direct, the Government's shared equity mortgage scheme.
- An extra £1bn will be provided to help homeowners and boost housing.
- £500m of extra financial support will be provided to kick-start building on housing projects stalled because of the credit crunch, including £100m for councils to build new energy-efficient housing.
Jobs
- An additional £1.7bn for Job Centre Plus and the New Deal is to be provided.
- Additional support for people who have been out of work for 12 months.
- From January everyone under the age of 25 who has been jobless for 12 months will be offered a job or a place in training.
- Mr Darling says the Government will work with employers to create or support as many as 250,000 jobs.
- £260m of new money will be allocated for training and subsidies for young people to help them gain skills and experience.
- Statutory redundancy pay will increase from £350 to £380 a week.
Business - The Chancellor is extending help allowing loss-making companies to reclaim taxes on profits made in the last three years to November 2010.
- £2.5bn to encourage business investment in industries of the future.
- New £750m Strategic Investment Fund to help emerging technologies and regionally important sectors in advanced businesses.
- Businesses' main capital allowance rate doubled to 40pc, giving enhanced tax relief to support investment of £50bn this year.
Motoring
- A car scrappage scheme will be implemented next month to provide motorists with a £2,000 discount on new vehicles bought when they trade in cars over 10 years old. The scheme will end in March 2010.
Tax avoidance
- Mr Darling expects to raise £1bn of extra revenue over the next three years by closing tax loopholes and schemes .
Green measures
- An additional £1bn to help combat climate change by supporting low-carbon industries and green jobs.
- The Chancellor is committing Britain to cut carbon emissions by 34pc by 2020.
- £525m of new support will be given over the next two years for offshore wind projects.
- £405m to encourage low-carbon energy and advanced green manufacturing in Britain to drive new technology and investment in small-scale projects.
Government
- Efficiency savings from 2011 are expected to give a further £9bn of additional savings a year by 2013/14. This help aims to keep current spending growth in real terms at an average of 0.7pc a year from 2011/12 onwards.
Financial services
- A Treasury paper is to be published with recommendations for wide-ranging reform of financial services, including action to reduce the impact of the failure of financial firms.
Armed forces
- £50m of spending is being brought foward to speed up modernisation of Armed Forces housing.
Children
- From April next year, the child element of Child Tax Credit will increase by £20. Children with disabilities are to get an extra £100 a year in their Child Trust Fund, with an extra £200 each year for those with severe disabilities.
Pensioners
- Pensioners' Winter Fuel Allowance is to be kept at the higher level of £250 for over-60s and £400 for over-80s for another year.
Savers
- Annual limit for tax-free ISAs increased to £10,200, of which £5,100 can be saved in cash. The new limit is introduced this year for over-50s, next year for all savers. Telegraph
