20 February 2020 - Video
The most significant changes in the Budget were to tax rates.
- Capital gains tax has risen from 18% to 28% for taxpayers whose total taxable income and gains (after allowable deductions) exceed the upper rate of the income tax band (£37,400 for 2010-2011). Any gains or part gains above that limit will be taxed at 28%. This higher rate will apply to disposals made on after 23 June 2010 and will particularly effect buy-to-let landlords and owners of second homes and holiday homes.
- The standard rate of VAT will be increased from 17.5% to 20% for any supply made on or after 4 January 2011. Legislation will be introduced to counter arrangements that purport to apply the 17.5 per cent VAT rate to goods or services to be delivered or performed on or after 4 January 2011. Rent demanded in advance for the quarter commencing 25 December 2010 can be billed at the 17.5% rate.
- The SDLT rate will be increased to 5% for residential properties worth over £1 million. This will apply to purchases completing on or after 6 April 2011.
- On 4 January 2011, the standard rate of insurance premium tax will be increased from 5% to 6%, and the higher rate will rise from 17.5% to 20%.