Headline measures include 2p cut in income tax and stamp duty exemption for zero carbon homes built before 2012
Chancellor of the Exchequer Gordon Brown today presented what is expected to be his final Budget with a series of headline measures.
Mainstream corporation tax will be cut in April next year by 2p to 28%, but small companies will have to shoulder a 2p rise in corporation tax to 22% starting in 2009. However, the Chancellor announced small companies would receive grants of £2,000 to train new employees.
There was some bad news for the construction industry as the aggregates levy will rise from £1.60/t to £1.95/t from next April, and landfill tax will rise by £8 each year until 2011. The Chancellor also announced that commercial property lying empty will have its tax relief cut to six months
By 2012, zero carbon homes worth up to £500,000 will be exempt from stamp duty. Green grants for homes – incentives for such measures as renewable energy schemes – will rise by 50%. Pensioners installing insulation and green central heating systems will receive grants of between £300 to £4,000, and the VAT on housing alterations needed by the elderly will be cut from 17.5% to 5%.
In a surprise move that is bound to boost Brown’s popularity with the electorate before the forthcoming leadership election, the basic rate of income tax will be cut from 22p to 20p from April next year. The threshold for the higher rate will increase from £38,000 to £43,000 in April 2009.
Brown said: “Now is not a time for fiscal loosening… this Budget will set out the long-term reforms we must now make to meet the global challenges ahead, and to build a Britain of high aspiration and achievement for the years to come."