UK Chancellor Alistair Darling’s 2010 Budget Speech

The Budget Speech today delivered a ‘business as usual’ message for contractors in the UK. Contractors can breathe easy with no major changes from 1 April.

Budget points for contractors:

• Personal Allowance unchanged at £6,475
• National Insurance rates unchanged at 11% and 12.8%
• Corporation Tax unchanged at 21%
• Capital Gains tax unchanged at 18%
• VAT remains unchanged at 17.5%
• VAT threshold increased from £68,000 to £70,000 from 1 April

The Budget 2010 also confirms:

• A 2 year stamp duty relief for property purchases up to £250,000 for first time buyers
• Doubling of the Annual Investment Allowance to £100,000 giving 100% relief
• Entrepreneurial relief lifetime limit increased to £2m
• Inheritance tax threshold of £325,000 frozen until 2014
• Beer, wine and spirits duty up by 2%
• A 1 per cent increase in national insurance contributions (NICs) rates from April 2011, alongside adjustments to the NICs primary threshold to protect those on low incomes
• A 50 per cent additional rate of tax on those with incomes above £150,000 and the gradual withdrawal of the personal allowance from those with incomes above £100,000 from April 2010
• New 42.5% dividend tax rate on income over £150,000
• Freezing the point at which individuals start to pay the higher rate of tax in 2012-13
• Restricting pensions tax relief from April 2011 for individuals with gross incomes of £150,000 and over (where gross income incorporates all pension contributions, including benefits provided by an employer). This restriction is subject to an income floor, so that individuals with pre-tax incomes (excluding employer pension contributions) of less than £130,000 will be unaffected
  
• A freeze in the inheritance tax (IHT) allowance of £325,000 in 2010-11

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