Wednesday, December 09, 2009

Pre-Budget Report Live Blogging

So the Chancellor is going to raise corporation tax by 1% but no longer hold off on returning VAT to 17.5%. Therefore this recressive tax which proportionally hits the poorsest more is going to have a bigger impact that on corporations, thus far.

Anyone under 24 is to be guaranteed work or training after 6 months out of work. And all 16 to 17 year old's guaratnee to be extended for another year.

State pension is to go up 2.5% so that will pretty much be swallowed up by VAT.

But hey we'll be borrowing a whole £3bn more this year than HE anticipated. That is £178bn instead of £175bn. Of course being only £3bn off is better than a lot of the doomssayers also thought we'd turn out. But still that is £1.5bn net more to be paid back under Darlings four-year-plan to cut it in half.

Boiler scrappage scheme has been confirmed and tax breaks announced for YIMBYs* in the form of a tax break for feeding any additional wind or solar power back into the national grid.

After Labour have removed the 10% income tax rate, they are now to give just such a break to corporations that take part in research or development. Maybe I should become a limited company and so a little bit more R&D in my job then.

The biggie has arrived any bankers monus over £25,000 is to be taxed at a one off rate of 50%.

Inheritance tax threshold is not a priority so will not rise from £325,000 to £350,000 just now.

The Chancellor likes to say that half of the additional reveunue raised on bonuses and inheritance will come from the top 2% of earners. He claims it is about fairness? Is it just me or did I miss a similar break down on the VAT increase he announced earlier? Might that be that that increase wasn't about fairness? Much in the same way that the abolition of the 10p tax rate proved to be.

There is to be £5bn of efficiency savings, scaling back in major IT projects (does that mean ID card database?) , reforming legal aid and outsourcing prison management.

National insurance contributions are to be raised by a further 0.5% but those earning less than £20,000 will be protected.

*Yes in My Back Yard.

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