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Pre-Budget Report 2009: Key Tax & Benefits Provisions

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In this week's pre-budget report, the Chancellor Alistair Darling confirmed  and scotched .

Instead of raising VAT, the Chancellor chose to increase National Insurance contributions (NIC) by 0.5% effective 2011 - but only for people earning over £20,000 a year.

Darling also froze the .

To fund the extension of the UK's broadband network, he imposed a 50p per month tax on landline telephone connections.

He also announced employer pensions contributions will now to be included in pensions tax relief. 

Finally, the Chancellor imposed a 50% one-off "supertax" on all bonuses over £25,000 awarded to workers in the banking sector.

Business Taxes

The Chancellor deferred an increase in corporation tax for small businesses.  He also extended empty property relief on commercial properties with a rateable value below £18,000 for another year.

In addition, Darling exempted electric vehicles from company car tax for five years.  And businesses buying plug-in vans will be able to write off their full cost against corporation tax.

Lastly, he imposed a new 10% corporation tax on income from biotechnology and pharmaceutical patents in the UK.

Pensions & benefits

The basic state pension will rise by 2.5% in April 2010, or 4% in real terms.

Inflation-linked benefits and tax credits, including child benefit and working tax credit, will rise by 1.5%.

** Additional Information & Advice **

You can obtain further information about tax and benefit rules on .

Depending on your circumstances, however, you may want to .  You can be matched with a solicitor for free via , which can also help you to understand the best course of action for your situation and whether you are ready to hire a solicitor.

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