Budget 2010: VAT rise and benefits cuts to tackle Britain's deficit VAT will rise and benefits will be cut to wipe out Britain’s budget deficit within five years, George Osborne has announced. Key Announcements VAT rises to 20% from 4th January 2011 Corporation Tax rate reduced by 1% per annum, to 24% by 2015 Small business CT rate reduced to 20% CGT for higher rate tax payers rises to 28% from midnight 10pc CGT rate for entrepreneurs extended to first £5m of qualifying gains Personal income tax allowance rises by £1,000 in April Higher rate payer's income tax rate frozen until 2013/14 No increases in tax on alcohol, tobacco or fuel; planned cider duty rate rise scrapped Tax credits reduced for families earning over £ 40,000 Increase in state pension age to 66 accelerated No actions are required immediately for Sage software users. You will need to prepare for the VAT rate change before January 2011. The process for this will be the same as used for the temporary reduction to 15% during 2009. As always, MCS will keep you informed and will be available to advise if you have any questions on this. Sage Payroll users who have SageCover support will receive automatic updates direct from Sage at the appropriate time to implement changes. If you do not have current SageCover on your payroll software, please contact MCS to arrange this.   Return to News