The Budget 2010
24 March 2010
Chancellor of the Exchequer Alistair Darling delivered the last budget of this parliament at a time when the focus has shifted slightly from tackling the recession to how to deal with the large amounts of debt built up in doing so. While the economic data over recent months has been decidedly mixed, most economists agree a recovery of sorts is under way for now, although some fear the economy could slide back into recession unless a credible plan for dealing with the budget deficit is presented. With a general election only months away, normally a ‘giveaway’ budget could be expected, but the state of the public finances has largely prevented this.
Preparing for the 50% Tax Rate
The current tax year ends on 5 April, and the new 2010/11 tax year sees the introduction of the new 50% tax rate on incomes above £150,000, as well as the removal of personal allowances for some.
Planning for the New Pension Restrictions
Following next month’s tax rises for high earners, April 2011 will see restrictions on how much tax relief some higher-rate taxpayers can claim on their pension contributions.
Managed Payment Plans
HMRC has announced that they will launch a new method of paying tax liabilities, known as Managed Payment Plans, in April 2011.
Student Loan Repayments
HMRC have announced a new initiative to reduce student loan over repayments for those ex students who repay their loan through PAYE deductions.
Tax Codes Being Issued
HMRC have updated their guidance on the issue of multiple or incorrect PAYE tax codes to some employees following the introduction of their new National Insurance and PAYE computer system.
The Vehicle Scrappage Scheme is a voluntary scheme for motor dealers under which participating dealers give buyers a £2,000 discount off the purchase price of a new car (or certain types of small van) in exchange for scrapping their old qualifying vehicle.
Government figures released show that the inflation rate increased to 3.5% in January 2010 from the previous month’s figure of 2.9%.