Pre-Budget Report 2009: Key Tax & Benefits Provisions

Pre-Budget Report 2009: Key Tax & Benefits Provisions

In this week’s pre-budget report, the Chancellor Alistair Darling
confirmed  and
scotched .

Instead of raising VAT, the Chancellor chose to increase National Insurance
contributions (NIC) by 0.5% effective 2011 – but only for people earning over
£20,000 a year.

Darling also froze the .

To fund the extension of the UK’s broadband network, he imposed a 50p per
month tax on landline telephone connections.

He also announced employer pensions contributions will now to be included in
pensions tax relief. 

Finally, the Chancellor imposed a 50% one-off “supertax” on all bonuses over
£25,000 awarded to workers in the banking sector.

Business Taxes

The Chancellor deferred an increase in corporation tax for small businesses. 
He also extended empty property relief on commercial properties with a rateable
value below £18,000 for another year.

In addition, Darling exempted electric vehicles from company car tax for five
years.  And businesses buying plug-in vans will be able to write off their full
cost against corporation tax.

Lastly, he imposed a new 10% corporation tax on income from biotechnology and
pharmaceutical patents in the UK.

Pensions & benefits

The basic state pension will rise by 2.5% in April 2010, or 4% in real terms.

Inflation-linked benefits and tax credits, including child benefit and
working tax credit, will rise by 1.5%.

** Additional Information & Advice **

You can obtain further information about tax and benefit rules on .

Depending on your circumstances, however, you may want to .  You can be matched with a solicitor
for free via , which can also help you
to understand the best course of action for your situation and whether you are
ready to hire a solicitor.