From April 2010 a new 50% additional tax rate will apply to income above £150,000 in the United Kingdom (UK) and the income tax personal allowance will gradually be withdrawn for those with incomes over £100,000. Other income tax rates will stay the same as will income tax personal allowances.

Budget 2010 is fiscally neutral and confirms the Government’s plans to more than halve the deficit over four years, maintaining a path of fiscal consolidation. On public spending,  Budget  2010  identifies  the  £11  billion  of  cross-cutting  savings  announced under  Smarter  Government  department-by-department  and  provides  further  details  on how  the  Government  will  deliver  £5  billion  of  savings  from  targeting  and  prioritizing spending. On tax, the Government intends to make further progress in Finance Bill 2010 passing  into  legislation  its  tax  consolidation  plans,  and  Budget  2010  announces  the continuation of above inflation increases in fuel, alcohol and tobacco duties to 2014-15.

Budget 2010 also confirms that overall spending will continue to rise in 2010-11 to help support the economy through the recovery. But, as announced at the 2009 Pre-Budget Report, public sector current expenditure will grow at the slower rate of 0.8 per cent a year on average from 2011-12 to 2014-15, and public sector net investment will fall to 1¼ per cent of GDP by 2013-14 and remain at that level in 2014-15.

Budget  2010  provides  targeted  support  for  households  and  individuals,  including:

increased  support  through  tax  credits  for  families  with  children  aged  one  and  two,
continuing  to  provide  an  additional  payment  for  pensioner  households  alongside  the Winter Fuel Payment,
two-year stamp duty relief for first time buyers for property purchases up to £250,000 from alongside an additional 5 per cent rate of stamp duty for residential property purchase over £1 million from 2011-12.

Budget 2010 also states that the Inheritance Tax threshold will be frozen to 2014-15.

Source: HM Treasury

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