Summary of Chancellor's Pre-Budget Report

The Chancellor delivered his Pre-Budget Report on Wednesday 9 December. Business will welcome some PBR measures - the new patent box, whereby income from new patents granted from 2013 will be taxed at 10% and the announcement of consultation on a foreign branch exemption.

The extra ½% hike in national insurance rates for employers, employees and the self-employed from 2011 will not be appreciated. This - combined with the 2008 announcement - will mean a 1% charge, raising about £7 billion in 2011-12 and subsequently.

Individuals will see tax allowances and thresholds frozen at 2009-10 levels - so no pay boost in April 2010. National insurance rates and thresholds are also unchanged. The state pension will rise by 2.5% from April 2010 - meeting the guarantee to increase pensions by the lower of RPI and 2.5%. Other benefits and credits will rise by 1.5%.

The much-heralded bank bonus tax applies to bonuses over £25,000 payable from today to 5 April 2010. It covers individuals engaged in banking business (including building societies) and will be charged at a 50% rate. Taking account of the levy, national insurance and income tax, bonuses will bear an effective 68% tax. It supports the G20 measures on bank pay to defer bonuses.

Finally, the Chancellor confirmed that VAT will go back to 17.5% from 1 January 2010.

Posted at 11:50AM Dec 13, 2009 by Kris Wigfield in Sport Finance  |  Comments[0]