The Budget Headlines

The detailed budget document is 160 pages long so these are the highly edited headlines!
22-06-2010

VAT will go up to 20% in Jan 2011. Items that currently don’t have VAT added such as most food and children's' clothing will stay zero rated over the course of this parliament.

Income tax payers will have their personal allowance (the amount they can earn before paying income tax on the rest) raised in April by £1,000 to £7,475. About 23 million basic-rate taxpayers will pay up to £170 a year less and 880,000 will pay no income tax at all. Only basic rate taxpayers will benefit though as the threshold for paying higher rate income tax will be reduced which will in effect claw back the benefit of the extra personal allowance, until 2013-14.
Alcohol, tobacco and fuel taxes won’t go up any more that the rises announced by the previous Labour government in the March Budget. And plans to raise the price of cider by 10% above inflation will be scrapped from the end of this month.
Capital Gains Tax (CGT) stays at 18% for low and middle-income earners, but has gone up to 28% for taxpayers on higher income tax rates. Second-home owners, people with shares or collections of paintings and antiques will probably have to pay higher rate CGT. The annual allowance of £10,100 remains before capital gains tax is payable.
For businesses the 10% CGT rate will be extended from the first £2m of qualifying gains to £5m.  
Welfare benefits, tax credits and public service pensions will be increased each year in line with the consumer prices index, not the often higher retail prices index. Housing Benefit will be capped at £400 a week for homes with more than 3 bedrooms, (£340 for 3 bedrooms; £290 for 2 bedrooms and £250 a week for a one bedroomed flat) so anyone paying more than that in rent while claiming housing benefit will have to find the rest themselves. Those on Job Seekers Allowance for more than 12 months will have their Housing Benefit cut by 10% from April 2013.
Tax credits will be cut for households earning more than £40,000 next year.
The child element of the Child Tax Credit will rise by £150 above inflation.
Lone parents will now be expected to look for work when their youngest child goes to school.
Child benefit will be frozen for the next three years.
There will be medical assessments for people claiming Disability Living Allowance from 2013.
From April 2011, the state pension will rise by the same amount as the increase in average earnings, or the increase in prices, or go up by 2.5% whichever is the highest.  The process of raising the state pension age to 66 will be speeded up.
There is to be a two-year pay freeze for workers in the public sector who earn more than £21,000 a year. Those earning less than £21,000 will get pay increases of £250 a year for each of those two years.
The threshold at which employers will start to pay National Insurance will go up; corporation tax will be cut next year to 27%, and by 1% annually for the next three years, down to 24%. The small companies' tax rate will also be cut to 20%.
Council tax: Could be frozen for one year from April 2011 in England, but extra funds will only be offered to councils which keep their own costs down. Worth about £35 per household.
A 50p a month "landline tax" to fund the rollout of fast broadband will be scrapped - instead the government will support private investment, partly funded by the digital switchover under-spend within the TV licence fee.
A bank levy will be introduced from January 2011 but smaller banks will not have to pay.  
The government will look at changing the aviation tax system - possibly switching from a per-passenger to a per-plane levy.  
There are 160 pages of the detailed budget proposals so these are the very edited headlines!