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Alistair Darling and the £20 billion tax raid

Despite the fact that last week's budget was a fairly lacklustre affair, 6 April 2010 will see a number of previously announced tax changes come into play. In total it is believed that taxpayers in the UK will be around £20 billion a year worse off due to previously announced changes with an obvious target being those on higher incomes in the UK. So what can we expect?

One of the major issues, which will affect the vast majority of people in the UK, is the freezing of income tax allowances which will see more people pay more tax. We will also see those on more than £150,000 a year fall under the new 50% tax band with a further increase in taxation paid on dividends received. There is also an increase in taxation payable for those owning high polluting cars and even though this particular move was announced back in 2008, it will not come into effect until 6 April 2010. We will also see an increase of one percentage point in national insurance which again will hit directly or indirectly everybody in the UK, including business owners and employees.

The truth is that while the last budget was fairly subdued on the surface, changes such as an increase in national insurance, the freezing of incomes allowances and other general taxation changes announced some time ago will hit the UK economy hard and will make a difficult situation worse.

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