Budget 2009 Headlines

The Chancellors new Budget for 2009 saw the introduction of a new top rate of Income Tax, increases in investment limits for ISAs, greater support for young people that are out of work, and a series of low carbon economy measures.

Here are the headlines:

Personal taxation

• an additional Income Tax rate of 50 per cent will apply to people earning over £150,000
• the income tax personal allowance will be reduced for those with incomes over £100,000

Pensions and savings

The Budget announced the following changes to pensions:

• an increase of £100 to over-80s households and £50 to over-60s households in 2009/10, alongside their Winter Fuel Payment
• tax relief on pensions contributions will be reduced for those earning £150,000 and over

The overall annual investment limit for ISAs rises to £10,200 of which £5,100 can be saved in cash. These higher limits will be available to over-50s from 6 October 2009 and to everyone from 6 April 2010.

Housing and homeowners

The Stamp Duty land tax threshold on residential properties costing £175,000 or less will be extended until 31 December 2009.

Local Housing Allowance (LHA) is being reformed - households will no longer be able to keep any surplus LHA if it is higher than their rent.

Budget 2009 announced a £600 million fund to kick-start housebuilding, with the aim of delivering an additional 10,000 homes in England over the next two years.

Motoring and transport

The Government has announced a temporary vehicle scrappage scheme - it offers consumers a £2,000 discount when buying a new vehicle to replace a vehicle more than 10 years old.

Budget 2009 confirmed the fuel duty increase announced in the 2008 Pre-Budget report, and further increases from 2010 to 2013.

Alcohol and tobacco

Alcohol duty rates increase from 23 April 2009. The duty will increase by 2 per cent, adding one penny to the price of a pint of beer, 13 pence to the price of a bottle of spirits and four pence to the price of a bottle of wine.

Duty on tobacco will increase by 2 per cent from 22 April 2009.

Employment and training

The Budget announced that 18 to 24 year olds who have been unemployed for 12 months will be guaranteed a job, training or a work placement.

An extra 54,500 places will be created in the next academic year for 16 and 17 year olds who wish to take them up.

Spending on public services

Current spending on public services will grow by an average of 0.7 per cent in real terms between 2011-12 and 2013-14.

The government’s short-term focus is on supporting employment and jobs through the downturn, while doing more to prepare Britain for the economic recovery. Budget 2009 announced:

• additional funding for Jobcentre Plus to help move people back into work
• that the guarantee of a place in education and training to every 16 and 17 year old who wants one will be met in full - an extra 54,500 student places in the next academic year
• a further £500 million of additional spending as part of an overall £1.4 billion package to boost Britain's low-carbon sectors, including measures to support energy efficiency and support low-carbon industries and green manufacturing
• a £600 million package to increase housing supply
• a new £750 million Strategic Investment Fund to support advanced industrial projects of strategic importance

For a more detailed budget breakdown click here