We have compiled a summary of the major points arising from Alistair Darling's 2009 Budget Statement to Parliament.
Please note that this is only a brief guide so please contact us if you have any questions
Tax
- A new band of Income Tax of 50% for those earning over £150,000 will be introduced in April 2010.
- Duty on cigarettes and alcohol is to rise by 2% immediately
- Fuel duty to rise by 2p per litre from September, then by 1p a litre above indexation each April for the next four years
Savers
Mr Darling has raised the annual ISA investment limit to £10,200, of which £5,100 can be saved in cash.
These higher limits will be introduced for those aged 50 for the tax year 2009-10, with the first deposits being available from 6 October 2009. The higher limits will then apply to everyone else from 6 April 2010.
Housing Market
For the housing market, Alistair Darling said the government is to use £600m to unlock stalled housing sites and provide a kick-start to house building. He said this would deliver up to 10,000 homes in England over the next two years.
On top of this, he has extended the stamp duty holiday for residential properties valued up to £175,000 until midnight 31 December 2009. According to Mr Darling, around 60 per cent of purchases are currently exempt from paying stamp duty as a result of the holiday.
Pension Tax Relief
From April 2011, tax relief on pension contributions will be restricted for those with incomes over £150,000. From that level of income, the value of pension tax relief will be tapered down until it is 20 per cent for those on incomes over £180,000. The government said it would consult on this measure shortly.
Car Scrappage Scheme
From May 2009 until March 2010 anyone who scraps a car over ten years old will get a £2,000 discount on a new car. This is on the condition that the car has been owned by them for at least 12 months.
Businesses
For businesses, Mr Darling has introduced a top-up to the trade credit insurance scheme to help UK businesses maintain their finances in the current economic climate.
Under the scheme, the government will offer to top up private sector trade credit insurance provision if insurers reduce cover from any business operating in the UK. However, cover provided under the scheme will be time-limited and capped at £5bn.
In the 2008 Pre-Budget Report the government announced a temporary one-year extension of loss carry-back for businesses from one to three years for losses up to £50,000.
Today (22 April) the government enhanced this further and has extended the relief to two years rather than one. Mr Darling said he expects 140,000 businesses to benefit.
Offshore Accounts
Mr Darling has begun to take a tougher stance on offshore accounts with a new disclosure opportunity (NDO) for holders of offshore accounts to run until March 2010.
This will give holders of these accounts the opportunity to disclose of their own accord, if they have unpaid tax or duties and to settle debts. HMRC is also seeking to issue notices requiring financial institutions to provide information about offshore account holders.
Financial Regulation
Meanwhile, the government also announced that it is to strengthen financial regulation and will soon launch a paper aimed at strengthening the financial system.
The government intends to renew financial regulation and reduce the deficiencies in corporate governance and help develop responsible remuneration packages.
Mr Darling said measures are needed to strengthen responsible shareholder engagement, remuneration and risk management practices.
However, the strengthening of regulation of financial services firms will only take place 'once the recovery is assured' and aims to improve the quantity and quality of bank capital and liquidity.
Mr Darling said he will use regulation to mitigate excessive leverage and increase future financial stability and will bring in the support of the FSA and the Bank of England to necessitate these changes.
Mr Darling also aims to reduce the 'systematic risks' by working urgently to improve transparency and a single set of high quality global accounting standards and said hedge funds could soon be regulated.