2009 United Kingdom Budget

Presented| 22 April 2009
Parliament| 54th
Party| Labour
Chancellor| Alistair Darling
Total revenue| £496 billion‡ (29% of 2008 GDP)
Total expenditures| £671 billion (40% of 2008 GDP)
Deficit| £175 billion (10.5% of 2008 GDP)
Website| Budget 2009: Building Britain's Future
‡Numbers in italics are projections.

‹ 2008

March 2010›

Pie chart of UK central government expenditure, 2009-10.

The 2009 United Kingdom Budget, officially known as Budget 2009: Building Britain's Future, was formally delivered by Alistair Darling in the House of Commons on 22 April 2009.[1] It introduced new tax, spending and debt rises in a financial environment of rising unemployment and recession.[2]

## Details

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To stimulate the motor industry, a £2,000 scrappage allowance was announced for a car more than 10 years old, if it is traded in for a new car and if it has been in the car buyer's ownership for the previous 12 months. £1,000 of this is to be provided by the government, and £1,000 by a motor manufacturer.[1] The scheme started about mid-May 2009 and was planned to finish at the end of February 2010; however, before it was due to end, it was extended by one month, to the end of March 2010.[3]

For high earners, a 50% tax band was announced for earners of over £150,000 per year to start in April 2010,[1] and tax relief on pension contributions was reduced progressively from 40% to 20% for annual incomes between £150,000 and £180,000 and to 20% above £180,000 commencing April 2011.[4]

Starting in April 2010, those with annual incomes over £100,000 would see their Personal allowance reduced by £1 for every £2 earned over £100,000, until the Personal allowance was reduced to zero, which (in 2010) would occur at an income of £112,950. This had the effect of creating an anomalous effective 60% marginal tax rate in the income band between £100,000 and £112,950, with the marginal tax rate returning to 40% above £112,950. As the Personal allowance has grown over the years, this has resulted in a corresponding increase in the size of the anomalous effective 60% tax band. As of 2018, the effective 60% marginal tax rate now arises for incomes between £100,000 and £123,700.[citation needed]

For savers, limits in Individual Savings Account (ISA) accounts were increased in two phases to a total of £10,200, including an additional £1,500 to the previous upper limit of £3,600 in a cash ISA. The first phase is for those over age 50 years, who can contribute additional amounts from 6 October 2009.[1]

### Taxes

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Receipts  | 2009-10 Revenues (£bn)

|

Income Tax  | 141
Value Added Tax (VAT)  | 64
National Insurance  | 98
Excise duties  | 44
Corporate Tax  | 35
Council Tax  | 25
Business rates  | 24
Other  | 67
Total Government revenue | 496

### Spending

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Department  | 2009-10 Expenditure (£bn)

|

Social protection  | 189
Health  | 119
Education  | 88
Debt interest  | 28
Defence  | 38
Public order and safety  | 35
Personal social services  | 31
Housing and Environment  | 29
Transport  | 23
Industry, agriculture and employment  | 20
Other  | 72
Total Government spending | 671

## See also

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* Budget of the United Kingdom

## References

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1. ^ a b c d "At-a-glance: Budget 2009". BBC. 22 April 2009. Archived from the original on 25 April 2009. Retrieved 23 April 2009.
2. ^ Wright, Ben (22 April 2009). "Budget signals new political era". BBC. Archived from the original on 25 April 2009. Retrieved 23 April 2009.
3. ^ "Car Scrappage Scheme Extended!". www.carscrappage.co.uk. 2010. Archived from the original on 28 May 2010. Retrieved 21 May 2010.
4. ^ "Pensions blow for higher earners". BBC. 22 April 2009. Archived from the original on 25 April 2009. Retrieved 23 April 2009.

## External links

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Wikinews has related news:

* Darling announces UK budget for 2009

* Budget 2009: Building Britain's future, HM Treasury web page (now at The National Archives)
* "Budget 2009 speech in full". BBC. 22 April 2009. Archived from the original on 24 April 2009. Retrieved 23 April 2009.
* "Complete Budget report" (PDF). Archived (PDF) from the original on 21 May 2009. Retrieved 23 April 2009.

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