From January 4 2011, the main rate of VAT will rise from 17.5% to 20%. Current zero-rated items like children’s clothes and magazines will remain exempt.
Corporation Tax will be cut next year to 27%, and by 1% annually for the next three years, until it reaches 24%. The small companies’ tax rate will be cut to 20%.
The government will help low-spending councils in England to freeze council tax for one year from April 2011.
Capital Gains Tax remains at 18% for low and middle-income savers but from midnight, higher rate taxpayers will pay 28%.