Taxes
- Corporation tax, currently 28%, to fall by 1p in the pound a year for four consecutive years until it reaches 24%.
- Small companies tax to fall to 20%.
- New firms outside south-east/east to be let off employer national insurance contributions, up to £5,000, for each of first 10 employees recruited.
- VAT to increase to 20% on 4 January next year.
- Freeze council tax for one year from April next year.
- Capital gains tax, currently 18%, to increase for higher earners to 28% from midnight. Low and middle-income savers will continue to pay 18%
- Personal income tax allowance to be raised by £1,000 from April to £7,475.
- Higher rate income tax threshold frozen until 2013.
- The standard rate of insurance premium tax to rise from 5% to 6% and the higher rate to increase from 17.5% to 20%.
Benefits
- Benefits, tax credits and public service pensions will increase in line with consumer prices (CPI)rather than the retail price index (RPI).
- Child benefit to be frozen for the next three years.
- Caps on housing benefit to be introduced – from £280 a week for a one-bedroom property to £400 a week for a four-bedroom or larger.
- Sure start maternity grant will go to the first child only.
- Eligibility for child tax credits to be reduced for families with a household income of more than £40,000 from April next year
- The baby element of child tax credit will be abolished from April next year
- Child element of the child tax credit to increase by £150 above indexation next year.