Page last updated at 13:47 GMT, Wednesday, 24 March 2010

Budget 2010 Q&A: How it affects you


The Chancellor, Alistair Darling, has delivered his Budget for 2010.

What is in it for you?

Home buyers

Stamp duty on properties worth up to £250,000 will be suspended for the next two tax years, but only if you are a first-time buyer.

But this is not an outright tax give-away. A new higher rate of stamp duty on land will come in at 5% on properties worth more than £1m, though from 2011.

If you have lost your job and are struggling with your mortgage repayments, the Support for Mortgage Interest scheme will continue at its higher rate for another six months.

This gives income support to unemployed homeowners with mortgage interest payments to pay.

What about savers?

For savers, the new annual ISA limit, already scheduled to rise from £7,200 to £10,200, will increase annually in line with inflation.

Meanwhile parents of children aged one or two will receive £4 a week more in child tax credit, from 2012.

And winter fuel payments for pensioners will continue at £250 for another year, and at £400 for those over 80.

The "un-banked"

Mr Darling said he would "guarantee" that everyone can have at least a basic bank account. Most people have full-service bank accounts, and about eight million have basic ones. But still not everyone.

So he wants to ensure that over the next five years another one million people, out of the remaining 1.75 million adults, will have access to at least the basic version.

With these accounts, you can pay money in and take it out with a debit card, but no overdrafts are allowed and usually you cannot have a cheque book either.

Drink, cigarettes and petrol?

Next month's increase in fuel duties will be staggered. So fuel duty will go up by 1p in April and another 1p in October with the remainder next January.

Tax on beer, wine and spirits will rise, as previously announced, from midnight on Sunday.

There will be more in the pipeline as alcohol taxes will also rise by 2% above inflation for two further years from 2013.

However the tax on cider will increase by 10% above inflation from midnight on Sunday.

Tobacco duty will rise from today by 1% above inflation, and will then go up by 2% above inflation each year until 2014.

Haven't some things been announced already?

Yes. In last year's Budget the chancellor said that income tax personal allowances would stay at £6,475 this coming tax year.

The personal allowance for those aged 65-74 will stay at £9,490. And if you are aged 75 or over, your allowance stays at £9,640.

The highest earners face a huge rise in their income tax bills.

As previously announced, starting this coming tax year, the personal tax allowance is going to be gradually phased out for anyone whose taxable income rises above £100,000.

It disappears altogether once their income hits £112,950.

And a new top rate of tax, set at 50%, is coming in for taxable incomes of £150,000 or more.

Meanwhile the existing 40% higher rate tax threshold is frozen at £43,875.

So is the inheritance tax threshold, at £325,000, but for four years.

Corporation tax stays at 21% for the coming tax year.

The chancellor also re-stated his intention to cut the value of pension tax relief for people earning more than £150,000 a year, from 2011-12.

And the plans to tax people on the value of their employers' pension contributions, potentially affecting those who earn more than £130,000 a year, is still in train, from 2011-12 as well.

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