Darling freezes tax but raises National InsuranceIncome tax on hold but NI to go up 1% from 2011
09 December 2009
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.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what's going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.