VAT rises to 20% - Emergency, Post-Election, Budget - June 22nd 2010

Chancellor George Osborne announced today that the standard rate of VAT will rise to 20% from 4th January next year (2011).

This is one of his measures for accelerating the reduction of the nation’s deficit.

Other measures included:

  • 2 year pay freeze for public sector workers earning over £21,000.
  • reducing tax credits for families earning over £40,000.
  • and what he described as ‘a tough decision’: child benefit frozen for next 3 years .
  • introduction of maximum limits on housing benefit to prevent
  • Corporation Tax Rates lowered in stages from 28% to 24%  over 3 years -  giving the lowest rate in G20 to attract foreign investment
  • Small companies’ corporation tax cut to 20% in 2011
  • Cancel some back dated business rate bills
  • Cancelled tax relief for the video games industry
  • Manufacturing as a whole will pay less tax.
  • From January 2011 introduction of a bank levy to generate over £2 billion pounds in annual revenues
  • 5 year plan to reform corporation tax system
  • Start-ups outside London exempt from up to £5,000 of national insurance payments for some employees

He hopes that the measures in this budget will make payments on interest £3 billion lower by the end of the year.

Further info on VAT

How to Add VAT to a Price

Do I need To Charge VAT?

Further Info on Previous Budget

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