The Chancellor of the Exchequer Alistair Darling MP delivered the 2010 Budget on Wednesday 24 March 2010. While most of the measures announced had been signaled in the Pre-Budget Report issued on 9 December 2009, there were some additional features.

The main tax measures can be summarised as follows:

VAT

• From 1 April 2010 the VAT registration and deregistration threshold increased to £70,000.
• VAT recovery for immovable property, boats and aircraft will change from 1 January 2011 to ensure that VAT recovery is restricted to business use of the asset.
• From 31 January 2011 VAT at the standard rate will apply to certain postal services provided by Royal Mail which have previously been VAT exempt.
• For accounting periods beginning on or after 29 March 2010 bingo duty decreased from 22% to 20%. In addition for amusement machine licence applications received by HMRC after 26 March 2010 the amusement machine licence duty will increase in line with inflation.

Corporation Tax

• The reduced rate of corporation tax of 21% for small companies will remain in place with the planned increase being deferred as announced in the pre budget report.
• The Annual Investment Allowance (AIA) which allows businesses to claim an allowance for the cost of certain plant and machinery additions in the year of acquisition has will be doubled with effect from 1 April 2010. The doubling of the allowance also applies to income tax with effect from 6 April 2010. However some anti-avoidance provisions have also been introduced to prevent property losses generated from AIA claims from being deducted for income tax purposes.
• From 1 April 2010 capital allowances of 100% will be allowed for zero emission goods vehicles (but not zero emission cars).
• From Budget day new anti-avoidance rules will apply with the effect that corporation tax relief will not be allowed where a company writes off loans provided to a participator of the company or an associate of a participator.

Income Tax

• There is no change to income tax rates or thresholds next year and the 50% rate of income tax for individuals earning over £150,000 which was announced in Budget 2009 will take effect from 6 April 2010.
• Personal allowances remain unchanged however where income exceeds £100,000 allowances will gradually be withdrawn at a rate of £1 of personal allowance for every £2 of income above the £100,000 threshold.
• Employer, employee and self-employed rates of National Insurance will be increased over the next two years £ primary and secondary Class I contri–butions will be 11% and 12.8% respectively from 6 April 2010 and 12% and 13.8% respectively from 6 April 2011. Class IV contributions will be 8% from 6 April 2010 and 9% from 6 April 2011.
• Benefit in kind charges for employees on the private use of company cars and vans are to be eliminated for zero emission cars and vans. Where the emission level is less than 75g/km of CO₂ the benefit in kind will be reduced to 5% of the list price of the company car.

Stamp Duty Land Tax

• First time buyers of homes costing under £250,000 will be exempt from Stamp Duty Land Tax for a two year period. However, those acquiring property with a value in excess of £1m the tax will increase to 5% with effect from 6 April 2011.

Other Announcements

• The capital gains tax rate remains unchanged at 18%.
• The rates of inheritance tax rates remain unchanged and the individual allowance of £325,000 will remain frozen at that level for the next four years.
• From 6 April 2010 the special rules for furnished holiday lettings will be abolished and such lettings will be treated the same as any other property rental business.
• For individuals with income in excess of £180,000, tax relief for pension contributions will be restricted to the basic rate of income tax with effect from 6 April 2011. Where income exceeds £150,000 but is less than £180,000, a gradual reduction to basic rate will apply.

Full details can be found on the budget section of the HMRC website which can be accessed at http://www.hmrc.gov.uk/budget2010/index.htm