Tax Rebates & Refunds

It’s Budget Day – what can we expect?

March 24, 2010
Posted in Budget 2010 — Written by The Entitlements Agency

Chancellor Alistair Darling will today deliver what many believe to be his final Budget and he is under pressure to reduce the country’s deficit, cut public spending and raise more revenue.

Tax is, of course, the way to go about raising that revenue. And income tax is always key. So what can we expect?

IFAonline.co.uk expects there to be a freeze on all income bands in what it calls a “classic stealth tax”.

It claims:

Every higher-rate taxpayer earning more than £43,875 will pay an additional £489 in tax as a result of the move, and 75,000 more people will pay this higher-rate tax for the first time.

The BBC website, meanwhile, suggests that Stamp Duty on house purchases up to £250,000 will be scrapped for first time buyers, duty on alcohol will significantly rise (and we say it will on cigarettes too), fuel duty will rise in phases (despite the fact that the cost of petrol is already astronomical) and Mr Darling himself has said that a rise in VAT was “not on the table”.

The Daily Mail has a stark warning for middle and high income earners of what to expect. The paper reports that from April:

  • All tax allowances will be frozen.
  • The personal allowance will be withdrawn for those who make more than £100,000 a year.
  • A new 50p tax rate will be imposed on those earning more than £150,000 a year.
  • Those earning more than £130,000 will see higher rate tax relief on pensions gradually withdrawn.
  • A pledge to raise the inheritance tax threshold to £ 350,000 has been abandoned.
  • Taxes on company cars will rise.

While from April 2011:

  • Everyone earning over £20,000 will pay more National Insurance.
  • The threshold for paying higher-rate tax will be frozen until 2013, dragging tens of thousands more into the 40 per cent tax band as their pay rises.

We’ll be following the Budget closely and will report back on any changes likely to affect your income tax, National Insurance contributions or your ability to get a tax rebate.

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