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Budget Is Announced – A Summary Of How It Affects You

Chancellor Alistair Darling has set out his Budget for 2010, the last one ahead of the general election.

A rise in taxes on fuel, cigarettes and alcohol appears as expected, although a three pence duty on fuel will be phased in over three stages between April this year and January 2011, rather than rise in one go next month.

The rest of the tax increases will come in at midnight on Sunday, with cider duty rising to ten per cent above inflation, wine, beer and spirit by two per cent (and another two per cent planned for two years from 2013) and tobacco by one per cent, plus a two per cent rise in real terms each year until 2014.

However, the Budget is likely to be welcomed by people trying to get on the property ladder, with stamp duty scrapped for homes below £250,000 for first-time buyers.

Instead it hits the pockets of top market property owners, with stamp duty on residential homes sold for more than £1 million set to increase to five per cent from April 2011.

The chancellor has promised help for businesses, with a £2.5 billion package for small businesses to boost skills.

There will be a one-year cut in business rates from October to help 500,000 companies and the investment allowance for small firms has doubled to £100,000.

There has been no change to capital gains tax rates, although a doubling on relief from capital gains tax for entrepreneurs.

People under 24 and out of work have seen the promise of six months work or job training extended to 2012 and the amount of time over 65s must work in order to receive working tax credits has been reduced.

A total of £385m has been promised to maintain the road network.

Parents with young children will see child tax credits rise by £4 from 2012 and the elderly will benefit from winter fuel allowance rates extending for another year.

In education, the government has promised funding for 20,000 new university places in science and maths – but there is a sting, as institutions have been told they make savings elsewhere.

Meanwhile, a £35m “enterprise fund” has been set out to help businesses launched from university. There are no planned changes to VAT or income tax and the limits of Individual Savings Accounts (ISAs) will rise with inflation.

Tax allowances for those on over £100,000 will be gradually removed and the inheritance tax threshold has been frozen for four years.

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