Chaseside Financial Services Ltd

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• Q2 2009
•   2009/10 Tax Tables
•   Housing Market Fortunes
•   Return Funds
•   Where should i put my money?
•   Forced to delay retirement
•   Corporate Retirement Planning
•   Retirement Matters
•   Budget 2009
•   Budget 2009
•   A Budget for business
•   Post-Budget wealth check
•   Financial security

Budget 2009

Chancellor increases tax rate on high earners’

The chancellor Alistair Darling unveiled plans during his second Budget speech on April 22, that he would increase taxes for the highest paid, rein in public spending and substantially increase borrowing to restore the public finances.

The economy is forecast to contract by 3.5pc in 2009, but growth is expected to resume “towards the end of the year” according to the chancellor.

Growth is predicted at 1.25 pc in 2010, and the chancellor said he expected the economy to grow at a 3.5 per cent rate from 2011 onwards. The current public deficit was “set to halve within four years”, he said. He said the Budget cut growth in real spending on public services from 1.2 per cent to 0.7 per cent from 2011.

Public borrowing is set to reach a post-war high of £175bn this financial year, or 12.4 per cent of gross domestic product, falling to £173bn next year and £130bn the year after. The public sector net debt will almost double to 79pc of national income by 2013. After that it is expected to stabilise and then start to fall only from 2015/16.

The previously planned introduction of a new 45pc income tax rate from April 2011, on income over £150,000 will now be brought forward by a year and the rate will increase to 50pc.
In addition, the personal tax allowance will be withdrawn for those earning more than £100,000 from next April, instead of a year later. From April 2011, the exchequer also intends to restrict pension tax relief for those with incomes above £150,000.

Other measures included the introduction of a car scrappage scheme next, paying buyers of new cars £2,000 if they got dispose of cars that are more than 10 years old. The scheme will run until March 2010.

The government aims to cut carbon emissions by 34pc by 2020, and will offer additional funding for energy efficient homes and buildings. There was also funding for green manufacturing.
The chancellor also doubled capital allowances for businesses this year to 40pc, in an effort to encourage companies to bring forward investment.

For savers, the annual Individual Savings Account limit has been increased from £7,200 to £10,200, half of which can be invested in cash. The new limit applies this year for the over-50s, and next year becomes available for all other savers.