1. New "rich tax" for those earning over £150,000: a new higher rate tax at 50% on income above £150,000. This is a political swipe at high earners, as with no personal allowance this group will be hit the hardest. Suddenly labour - who at one time could not do enough for high earners - has dealt them a nasty blow. We predict that the government's plan to raise an additional £2 billion will fail as more people will simply switch to tax-avoidance schemes.
2. Increased ISA limit: Excellent news for savers. From 2010-2011, the limit on ISA savings will be increased from £7,200 to £10,200; £5,100 of which can be invested in cash. For over-50s, this applies to the current tax year, so our advice is invest in a tax-free ISA NOW to build your tax-free income for the future.
3. Tax Relief on pension contributions for high earners restricted to basic rate: From 2011-2012, individuals earning over £150,000 will not be eligible for higher rate tax relief on their pension contributions. Once again, government is squeezing high earners to increase Treasury income. New provisions will come into place to protect against increased pension contributions in order to claim higher rate tax relief.
4. Corporation tax rate on small business kept at 21%: the proposed increase in corporation tax to 22% has been postponed, so working through a limited company is still a competitive and tax efficient choice.
5. Extension of trading losses to be carried back: Government has offered some relief to businesses suffering from the recession by allowing current losses to be carried back against profits of the previous three accounting periods.
6. Personal allowance over £100,000 reduced: those earning over £100,000 will see their personal allowance cut by £1 for every £2 over £100,000.
7. A temporary 40% first-year allowance on plant and machinery: a welcome relief for small business planning on investing more than £50,000 in any one financial year. The first £50,000 will be covered by an Annual Investment Allowance.
8. Extension of business payment support service: this has been extended to apply to businesses genuinely unable to immediately pay outstanding liability; also allows for negotiating a "reasonable time to pay".
9. Extension of Stamp Duty holiday: applies to any residential properties acquired over £175,000 to 31st December 2009.
10. 2% Duty increase: Duty up 2% on alcohol and tobacco.
11. Up by 2p per litre: Fuel Duty increased by 2p per litre.
