UK Budget: snippets

  • Inflation target to remain at 2 per cent
  • VAT to rise to 20 per cent from Jan 4, 2011 (expected to raise £13bn per year by the end of this Parliament)
  • Bank levy targeting larger banks with lower tier one capital and/or shorter-maturity funding from Jan 2011 (expected to raise £2bn per year). France and Germany also pledge to introduce bank balance sheet levy
  • Capital gains tax – higher-rate taxpayers will pay 28 per cent from midnight; basic rate taxpayers still at 18 per cent; entrepreneurs’ 10 per cent rate extended from first £2m to first £5m of capital gains
  • HM Treasury’s Euro preparation unit to be disbanded
  • Deficit reduction: 77 per cent from spending cuts & 23 per cent from tax increases