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Emergency Budget – what does it mean to you?

The Chancellor of the Exchequer, George Osborne, has delivered the new coalition Government’s first Budget statement. Mr Osborne has a tough job on his hands to try and reduce the UK’s spiralling debt and lay the foundations for economic recovery, so we’ve all been expecting some harsh measures. That indeed was what we got in the Emergency Budget, with significant cuts in public spending and in the benefit system and rises in taxation.

From 4 January 2011 VAT will rise from 17.5% to 20%, but fortunately current zero-rated items like basic food and children's clothes will remain exempt. Next April the personal income tax allowance will be increased by £1,000 to £7,475 – this will be worth £170 a year to basic rate taxpayers. Capital Gains Tax remains at 18% for basic rate tax payers but from midnight, higher rate taxpayers will pay 28%. The annual CGT allowance remains unchanged at £10,100. State Pensions...

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