Buzzacott 2010 Emergency Budget Report

Wednesday 23rd June 2010

A Summary of the 2010 Emergency Budget

The Chancellor, George Osborne, presented the Coalition Government’s first Budget yesterday and our summary of the main announcements can be found on this website.

As expected the Budget was a mix of radical cuts to public expenditure, together with some significant tax changes. The more widely applicable tax changes include:

A significant increase in the standard rate of VAT.
An ‘immediate’ increase in the top rate of capital gains tax.
An increase in the lifetime limit for entrepreneurs’ relief from capital gains tax.
A £1,000 increase in the personal income tax allowance for those paying tax at basic rate.
Phased reductions in the main rate of corporation tax.
A reduction in the small companies’ rate of corporation tax.
Reductions in the rates of capital allowances available to businesses.
Reversal of the announcement made by the previous Government that the beneficial Furnished Holiday Letting rules would be withdrawn.

The Government has also expressed reservations about the recent amendments to the pension regime, although it believes that reform of the previous regime is necessary. Reform may result in the repeal of recent changes coupled with a significant reduction in the annual allowance.

Finally, and as expected, the Government has announced that further action will be taken to tackle tax avoidance schemes, particularly in respect of employment income and national insurance contributions. New legislation will be introduced to take effect from 6 April 2011.

Inevitably the provisions announced yesterday are far more wide-ranging than this. Further detail is available by clicking on the relevant point below:

We will be analysing changes as further information becomes available and will be releasing Insights as appropriate. Where we are aware that a change may impact on particular clients, we will be contacting them directly. In particular we will be providing detailed guidance on the impact and operation of the proposed VAT change.

In the meantime please contact Alastair McQuater or your usual Buzzacott contact if you have any immediate concerns or queries.