Budget Highlights

• from April 2010, an additional rate of income tax of 50 per cent will apply to income over £150,000, and the income tax personal allowance will be restricted for those with income over £100,000 and gradually reduced to nil
• from 2010-11 there will be increases to the trust rate and dividend trust rate to match those for income tax
• the measure includes new powers to vary the income tax rates for the charges that apply to registered pension schemes.
• from 22 April 2009, tax relief on pensions contributions will be restricted for those with incomes of £150,000 and over, and tapered down until it is 20 per cent; for those on incomes over £180,000, it will  be the same for each pound of contribution as for a basic rate income tax payer.
• The forecast for inflation by the end of the year is 1%
• Forecast for Retail Price Index by September is -3%
• From April 2010, the additional rate of income tax will be 50% on income over £150,000 with a rate of 42.5% for dividends and the value of the personal allowance will be restricted for those with incomes over £100,000, tapering down to zero.
• These changes replace the 45% income tax rate and the two-stage taper of the personal allowance announced in the 2008 Pre-Budget Report.
• The annual ISA investment limit will rise to £10,200, of which £5,100 can be saved in cash. These higher limits will be introduced for those aged 50 for tax year 2009-10, with the first deposits being available from 6 October 2009. The higher limits will then apply to everyone from 6 April 2010.
• A New Disclosure Opportunity (NDO) for holders of offshore accounts will run until March 2010. This will give holders of these accounts the opportunity to disclose, of their own accord, if they have unpaid tax or duties and to settle debts. HMRC is also seeking to issue notices requiring financial institutions to provide information about offshore account holders.
• The Government announces that is legislating for the publication by HMRC of the names of both corporate and individual taxpayers who incur a penalty because they have deliberately understated over £25,000 of tax.
• As announced at the 2008 Pre-Budget Report the income tax personal allowance for under 65s will increase above indexation to £6,475. Age related allowances have been increased in line with inflation.
• The basic rate of income tax will remain at 20p, and the higher rate of tax will remain at 40p.
• The capital gains tax (CGT) annual exempt amount increased in line with statutory indexation to £10,100 for the tax year 2009-10 for individuals. The annual exempt amount for most trustees is increased to £5,050. For capital gains above the annual exempt amount the CGT rate for 2009-10 will continue to be 18 per cent.
• As announced in Budget 2006, the inheritance tax allowance increased in 2009-10 to £325,000 for individuals or £650,000 for married couples and civil partners. The value of estates over and above the allowance is taxed at 40 per cent. The proportion of estates left on death in 2009-10 which are expected to be liable for inheritance tax is 2 per cent.
• inheritance tax agricultural property relief (APR) and woodlands relief (WR) will now apply to property in the European Economic Area (EEA). Property qualifying for this extended IHT relief will also qualify for capital gains tax (CGT) hold over relief.
• Disclosure of Tax Avoidance Schemes (DOTAS): HMRC will begin discussions with interested parties with a view to extending the ‘hallmarks’ used to identify avoidance schemes, to ensure they continue to bear down on avoidance, and revising the penalty regime to introduce tougher sanctions for the non compliant.
• the main rate of corporation tax will be 28 per cent on and after 1 April 2010 other than ring fence profits which are taxed at 30 per cent
• the small companies’ rate for all profits, apart from ring fence profits, will remain at 21 per cent from 1 April 2009 and will be 19 per cent for ring fence profits
• Legislation will be introduced to make a number of improvements to the Venture Capital Schemes, EIS and VCT
• There are changes to the tax treatment of offshore mutual funds
• further minor changes to the non-domiciled remittance basis of taxation
• rules introduced to counter schemes that are designed to exploit income tax loss relief rules using offshore life insurance policies
• Legislation will be introduced to provide a means of reclaiming overpayments of income tax, CGT and CT where there is no other statutory route.
• The penalty regimes for late filing of tax returns and late payment of tax will be reformed

The Finance Bill timetable is as follows:
Budget day 22 April - Finance Bill published 30 April - Second reading 6 May - Committee of the Whole House 12-13 May - Committee 19 May-25 June - Commons Report stage 7-8 July - House of Lords 17 July (debate only) - 21 July Royal Assent and Finance Act published