8:18am Tuesday 22nd June 2010
By Matt Smith
BUSINESSES across the Hampshire were today bracing for painful tax hikes as the Chancellor of the Exchequer announces his emergency Budget.
George Osborne will stand up just after midday to deliver his medicine to tackle the national deficit with VAT widely expected to go up from 17.5 to 20 per cent.
• Click here for live coverage of the emergency budget.
The Government has already announced plans to increase Capital Gains Tax from 18 per cent to closer to 40 per cent.
However Corporation Tax will be cut and there will be a promised reverse in Labour’s proposed “jobs tax”, scrapping the one per cent rise in employers’ National Insurance.
Mr Osborne has promised “tough action” as part of his four-year plan to bring down borrowing which is set to total £155bn this year.
For every £1 he raises in tax hikes, the Chancellor will cut £4 from Government spending. A freeze on public sector pay and welfare payments is expected. Fewer people will receive benefits and tax credits.
Last night unions warned they will resist any attacks on public sector pay and pensions.
Councils in England will be offered help to bring in a council tax freeze.
Chief executive of the Hampshire Chamber of Commerce Jimmy Chestnutt said the chamber had already written to Mr Osborne pleading for “generous exemptions for entrepreneurial business” and highlighting the need and difficulties in protecting business and employees from any CGT rises.
He added: "The Chamber also hopes that the Chancellor honours his pledge to scrap the 1 per cent rise in national insurance contributions and lower the headline rate of corporation tax; and that tax increases will focus on consumption taxes rather than payroll, income or profits, so as not to jeopardise the prospect of recovery.”
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