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Emergency budget date set - spending down, taxes up
Posted May 17, 2010
The new Chancellor has announced the date of his Emergency Budget. The Budget is set to be delivered on June 22nd, and is sure to contain a whole range of spending cuts as well as tax rises.
Given that government spending under Labour massively outstripped tax receipts for almost its entire time in office, aside from a brief period around the millennium, it is unsurprising that the state of the fiscal finances is dire. Even without the 'global economic crisis', the nation would have some serious decisions to make sooner or later.
George Osborne will set out his plans to deliver the first £6bn of spending cuts next week. The Budget will also contain plans to cut many more billions of waste, in addition to a wide range of tax increases, which are likely to include:
- Increase in the standard rate of VAT from 17.5% to 20%
- Increase in CGT rates on 'non-business assets' from 18% to nearer the 40% mark.
- Decrease in corporation tax rates, with a possible cut in the small companies' rate from 21p to 20p, as per the Conservatives' manifesto.
- Possible increase in the lower threshold of income tax for lower earners - unlikely to hit £10,000 in one go.
- Higher rate tax threshold may remain unchanged to make the most of 'fiscal drag' once again.
You might also like to read our article outlining the possible tax consequences for contractors of having a coalition government.
All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.
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