The Chancellor, Alistair Darling will present his pre-budget speech to Parliament on the 9th December

Due to the current state of the UK’s finances it is likely that additional tax increases will be revealed. Tax increases have already been announced in the last budget.

Tax increases in April 2010

The new 50% rate of income tax was announced in the last budget, along with increases in the rate of dividend taxation for taxpayers earning over £150,000

Changes to personal allowances will also be made wef April 2010 for earnings over £100,000. The personal allowance will be reduced by £1 for every £2 earned over £100,000. This means taxpayers will be paying an effective 60% income tax rate on income between £100,000 and £112,950.

Small companies will also be hit by an increase in the small companies’ corporation tax rate. This rate will increase from 21% to 22% from April. This will directly hit the pockets of most small incorporated businesses in the UK.

There are also rumours about changes to capital gains tax, inheritance tax and tax relief on pension contributions. Any further changes could have a dramatic impact on individuals and businesses alike. A review of the financial advice that you may have received prior to the budget might be appropriate

We will have to wait until the 9th to see what delights are in store for the UK.