Pre-Budget Report Briefing - If It Counts, It's Covered

INTRODUCTION

With UK GDP contracting more sharply than expected at Budget 2009, the purpose of the Pre- Budget Report (PBR) is to maintain economic stability. The Chancellor refrained from increasing rates of income tax beyond those previously announced. The rates for corporation tax and capital gains tax are unchanged.

As anticipated, a one-off tax of 50%, payable by banks, was announced on bonuses over £25,000. The restoration of the VAT rate back to 17.5% from 1 January 2010 was confirmed and no subsequent increase in the VAT rate was announced. Other key measures include:

• A further increase in National Insurance Contribution rates of 0.5% from 2011, in addition to the 0.5% increases announced in PBR 2008;