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Contractors await Pre-Budget Report - 9th December

Published on Nov 11, 2009 |

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Read the key points for contractors from the 2009 Pre-Budget Report.

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The Chancellor has announced that he will deliver his Pre-Budget Report on 9th December.

Given the gaping hole that now exists in the public finances, most commentators are expecting Alistair Darling to announce further tax raising measures, in addition to the ones we are already aware of.

Current tax hikes planned for 2010

Although the new 50% income tax rate is due to hit earners over £150,000 from April 2010, it is possible that the Chancellor may decide to lower the threshold.

For earners over £100,000, the personal allowance is to be gradually removed, meaning that the effective rate of taxation on income between £100,000 and £112,950 is 60%.

In addition, a new dividend tax rate of 42.5% will be introduced for those earning over £150,000. The current 10% and 32.5% dividend tax rates remain unchanged.

The small companies corporation tax rate is also due to rise from 21% to 22% from April.

The current Capital Gains Tax rate may also rise from 18% to 25% according to many 'tax experts'.

As ever, we'll update the site with the latest developments and predictions in the run up to the PBR on 9th December.