Comments on the emergency Budget

George Osborne named his first Budget ‘the unavoidable Budget’ and the ‘emergency Budget’. It contained a number of very important announcements about tax.

These included:

• The increase in the rate of VAT from 17.5% to 20% to take effect on the 4th January, 2011.

• The £1,000 increase in the personal allowance in the tax year 2011/12.

• The immediate increase in the rate of capital gains tax for higher rate income tax payers from 18% to 28%.

• The rise in entrepreneurs’ relief for capital gains tax from £2 million to £5 million.

• The progressive cuts in the rates of corporation tax over the next four years, financed by cuts to capital allowances.

• The abolition of the effective requirement to annuitise pensions at age 75 and the prospect of changes to higher rate tax relief on pension contributions.

We hope this summary proves useful. We have a detailed summary available. If any of the areas that it covers seem likely to have an impact on your tax and financial planning, please do not hesitate to contact us.