Summer Budget 2010 Introduction Income Tax Tax Credits and Benefits National Insurance Contributions Employees Savings Capital Gains Tax Inheritance Tax Corporation Tax Business Tax Value Added Tax Insurance Premium Tax Other Measures Tax Tables National Insurance

Tax Credits and Benefits Tax Credits A number of changes were announced to reduce the cost of Child Tax Credits, particularly those paid to higher earners. At present, some CTC can be claimed by couples earning over £50,000. There are no changes to claims in the current year, but from 2011/12: Eligibility for CTC for families with income above £40,000 will be reduced. The child element of CTC will be increased, but the rate at which it is withdrawn for higher incomes will also be increased. The "baby element" (which doubles CTC in the year a child is born) will be abolished. The "income disregard" (which ignores increases in income from one year to the next when finalising a credit entitlement) will be cut from £25,000 to £10,000. Further changes will be made in 2012/12 Pensioners The Chancellor announced that the State retirement pension will no longer increase in line with the retail prices index. Instead it will go up annually by the highest of 2.5%, the percentage rise in average earnings and the percentage rise in average prices. This will be a popular measure with campaigners on behalf of the elderly, who have protested that some recent rises in pensions have been derisory. Benefits and other measures Mr Osborne announced that welfare reform had to be an essential part of reducing the deficit in public finances. Child benefit will continue to be paid universally without a means test, but the amount will be frozen at current rates until April 2014. The Government had already announced an intention to reduce and then stop its contributions to Child Trust Funds, which were introduced by Gordon Brown for children born after August 2002. The Budget confirms that this reduction will begin for children born from August 2010, and the Government additions to CTFs at age 7 will cease from the same date. HMRC will not issue new CTF vouchers from 1 January 2011. Existing CTF accounts will still enjoy their tax-free status for the time being. Mr Osborne also announced significant measures to tighten the rules for Disability Living Allowance and to restrict the amounts of Housing Benefit. Benefits will in future be increased annually by reference to the consumer prices index rather than the retail prices index, and this is expected to produce smaller rises.