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.
