UK 2009 Budget was announced today (22 April).

Chancellor of the Exchequer, Alistair Darling, has today (22 April) announced the UK Budget for 2009 with hopes of taking Britain out of the economic slump.

The key points of the Budget 2009 are listed below:

Tax

- VAT will return from 15% to 17.5% by December
- Income tax for those earning £150,000 and above will rise from 40% to 50% from April 2010
- From April 2011, pension tax relief for people earning over £150,000 will be reduced
- Fuel duty will rise by 2p a litre from September, and then by 1p a litre above inflation each year
- Alcohol duty will rise by 2% from midnight tonight
- Tobacco duty will rise by 2% from today
- Annual limit for tax-free ISAs will rise to more than £10,200 for over-50s this year and for everyone else next year. £5,100 of that amount can be cash.

Economy

- The UK economy is forecast to shrink by 3.5% in 2009
- Public borrowing will increase to £175 billion in 2009
- The current budget deficit will be back in balance by 2011
- UK net debt will “stabilise and begin to fall” in 2015-16
- The Retail Price Index is expected to fall to -3% by September
- Consumer price inflation is predicted to fall to 1% by the end of the year

Housing

- Stamp duty holiday for homes worth £175,000 or less will continue until the end of the year
- Pledge to introduce a scheme to guarantee mortgage-backed securities to boost spending
- A £500 million pledge to kick-start housing projects
- A further £80 million for HomeBuy Direct – the shared equity mortgage scheme
- £50 million investment in housing for the armed forces

Environment

- £1 billion pledge to help combat climate change
- Britain commits to cut carbon emissions by 34% by the year 2020
- £435 million pledged to support energy efficiency schemes for homes, businesses and public buildings
- £525 million pledged towards building off-shore wind farms over the next two years
- £405 million investment into encouraging low-carbon energy and advanced green manufacturing

Business

- Motor industry to introduce a car scrappage scheme to award £2,000 to owners of cars older than ten years to scrap their vehicles
- Help for loss-making companies extended until November 2010
- Business capital allowance rate will increase to 40% to encourage spending and forward investment
- Further investment to be made into Britain’s broadband network

Jobs

- Basic state pension will increase by at least 2.5%, regardless of inflation
- £1.7 billion pledge to support Jobcentre Plus and New Deal to help protect 500,000 jobs
- Statutory redundancy pay up from £350 to £380 a week
- Under-25s unemployed for a year will receive either job or training
- £250 million investment into work experience in growth industries
- Funding to create thousands more sixth-form places
- Extra support for people out of work for 12 months and over