The new 50p top rate of income tax is hugely significant.

Patrick Stevens, tax partner at Ernst & Young, tells me that it’s the highest band for 20 years in the UK.

Margaret Thatcher abolished the 60 per cent rate in 1987/88 and replaced it with the 40 per cent rate in 1988/89.

By Steve Lodge, FT Money

The increase in the Isa limit to £10,200 a year sounds good – after all it’s £3,000 more than the current £7,200 limit.
However, it’s not exactly a windfall giveaway. Savers will be able to put up to £1,500 more into a cash Isa – £5,100 compared with the present £3,600.  But with interest rates at record lows, the additional tax savings are worth just £9 a year for a higher rate taxpayer, according to KPMG.  In addition, there are no instant winners here: the allowance increase only comes into force from 6 October for over-50s, while younger savers will have to wait until next April.

See our up-to-the minute personal finance Budget coverage

It is a gift for the Tories. And the timing is bizarre.

The International Monetary Fund has made its global economic predictions and the results aren’t too pretty for the UK.

Two thoughts on the politics of the 50 per cent tax rate.

1) Alistair Darling has given the Tories a ticket out of tax raising jail

By Matthew Vincent, FT Money

The complicated new system for reducing tax relief on pension contributions from April 2011 – which tapers the relief down from 40 per cent for those earning £150,000, to 20 per cent for those on £180,000 or more – will have more impact that at first realised. Eight per cent of higher-rate tax payers will be affected – approximately 280,000 people.

By Alice Ross, FT Money

Changes made to enterprise investment schemes in today’s Budget have been dismissed as “virtually meaningless” by an industry expert.

By Sharlene Goff, FT Money

First-time buyers in London who are hoping to take advantage of the extended stamp duty holiday may be disappointed. Buyers now have until the end of this year to escape stamp duty if they are spending less than £175,000 on property – an extra three months on what was announced in the pre-budget report last year.

By Ellen Kelleher, FT Money

There will be some red faces in the City following this year’s Budget statement. Tax dodgers who misstate their yearly income and gains by tens of thousands of pounds face being “named and shamed” in public as part of a new round of efforts by the government to crack down on tax avoidance.

  • Chris Giles, economics editor, says “terrible” public finances set tone for Darling (video)
  • Martin Wolf, chief economics editor, writes: “Only Alistair Darling, most emollient of politicians, could manage to make this Budget seem boring. He is telling his country that British prosperity was, in important respects, as fraudulent as a collateralised debt obligation, that the boasts of “no more Tory boom and bust” are a joke, that the economic forecasts he gave only last November were nonsense and that the public finances are deteriorating at a rate never seen before in peacetime.”
  • Brian Groom, business and employment editor, notes that the Budget produced a muted response from business as Alistair Darling, the chancellor, sought to make the most of a modest fiscal stimulus.

Budget blog 2009

The Budget blog is no longer updated but it remains open as an archive.

As Alistair Darling delivers his speech on Wednesday, our live bloggers will take you through the Budget. Join Robert Shrimsley, Jamie Chisholm and Matthew Vincent for the Budget live blog here at 12.30pm BST. We'll also have blog posts throughout the afternoon.

About the authors

Robert Shrimsley is editor of FT.com
Jamie Chisholm is deputy markets editor
Matthew Vincent is personal finance editor
Ed Crooks is energy editor
Chris Giles is economics editor
Jim Pickard is political correspondent
Alex Barker is political correspondent
Elaine Moore is personal finance reporter
Ellen Kelleher is personal finance reporter
Sharlene Goff is deputy personal finance editor
Alice Ross is personal finance reporter
Steve Lodge is personal finance reporter

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