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News
09/12/2009 - Pre-Budget Commentary
In summary:
Pensions
The Chancellor confirmed announcement made in the Budget regarding reduction in pension tax relief for people with incomes of £150,000 or over.
The 'anti-forestalling' measures applying in tax years 2009/10 and 2010/11 will be extended to include those with relevant income between £130,000 and £150,000. The tax charge will also increase from 20% to 30% in April 2010.
He announced cost savings which include the 'phasing in' of personal accounts.
- Public sector pay settlements to be capped at 1% for 2 years starting 2011/12.
Banking
- The provision the Government is making for the cost of 'bank bailouts' is to decrease from £50 billion to £10 billion.
- There will be a one-off 50% levy on individual discretionary bonuses above £25,000 paid by banks.
Tax
- National insurance to increase by 1% for both individuals and employers from April 2011, up from the 0.5% already announced – the additional rise is expected to raise £3 billion a year.
- The Chancellor is looking to increase the level at which individuals start to pay NICs in order to ensure that no one who earns under £20,000 will end up paying more.
- The Inheritance tax threshold frozen at £325,000 until 2011.
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