The Chancellor today confirmed that income tax rates and thresholds will remain on hold for 2010-11 but revealed an extra 0.5% increase in National Insurance contributions from April 2011, taking the Class 1 employee rate to 12%.
Pre-Budget Report highlights
- Income Tax rises for 2010-11 were ruled out by Alistair Darling, but April 2010 will see an additional tax rate of 50% for those earning over £150,000.
- National Insurance contributions (NICs) were already due to rise by 0.5% in April 2011, they will now rise by a full 1%. This will take employee Class 1 contributions to 12%. This will not affect the lowest paid as the level at which people start to pay NICs will also rise, by an additional £570.
- The inheritance tax nil-rate band was due to rise to £350,000 in 2010 but will now remain fixed at £325,000.
- Basic State Pension will increase by 2.5% from April 2010, from £95.25 per week to £97.65 per week. The couples’ rate will rise from £152.30 to £156.15.
- Standard rate VAT will revert to 17.5%, rising from the reduced level of 15% from 1 January 2010.
- Stamp Duty Land Tax (SDLT) will be re-imposed on residential property sales above £125,000 from 31 December 2009. It will be charged at 1% on properties worth up to £250,000, 3% on properties worth between £250,000 and £500,000 and 4% on property worth more than £500,000.
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