VAT

The headline rate of VAT will be increased to 20% from 4 January 2011. There will be no change to zero-rated and exempt items such as food, children's clothing and books.

Capital Gains Tax

The headline rate of Capital Gains Tax rises from 18% to 28% with immediate effect, but only for higher rate taxpayers. This is a lower increase than that which had been widely predicted and the first £10,100 of annual gains remain tax-free, at least for now.  Entrepreneurs' relief rate of 10 per cent will be extended from the first £2 million of gains to the first £5 million.

PAYE

Personal tax-free allowance increased by £1,000 to £7,475 from April 2011.  40% tax threshold will be reduced to £42,375 to claw-back the increase in te tax-free allowance for higher-rate taxpayers.

Employees' National Insurance

National insurance contributions payable by employees rise by 1% to 12% from April 2011 up to the upper earning limit (UEL) which will be reduced by £1,650.  Employee NIC rate will rise by 1% to 2% above the UEL.

Corporation Tax

Small businesses will benefit from a reduction in the Small Profits Rate of corporation tax from 21% to 20%. This applies to firms with profits not exceeding £300,000. The standard rate of corporation tax will be reduced to 27% from April 2011, with further 1% reductions in each of the following three years.

Manufacturing allowances and reliefs

The Annual Investment Allowance will be reduced to £25,000 a year, with the intention of targeting support to smaller firms. Capital allowances will be reduced for plant and machinery from 20% to 18% per annum.  Allowances for assets held for longer periods will be cut from 10% to 8% per annum. These changes will not take place until April 2012.

 Employers' National Insurance

Employers' National Insurance Contributions (NICs) will increase by 1% from April 2011 but the weekly earnings threshold for payment will rise by £21 per week above inflation. New businesses outside London, the South East and the East will receive a £5,000 exemption from NIC payments for their first 10 employees.

Duties

There will be no increases in cigarette, fuel or alcohol duties, although the Chancellor signified that rises may follow in the future. As previously announced, the planned 10% increase in cider duty will be scrapped.

Pensions

Basic state pension to be linked to earnings from April 2011, with a minimum increase of 2.5%.  Age by which private pension-fund holders must buy an annuity to rise from 75 to 77.