Budget 2010: Top ten Budget tax changes since 1997

1, Dividend tax credits

In his first Budget in 1997, Gordon Brown announced the abolition of payable dividend tax credits for pension funds and other companies. This is often referred to as having had one of the most significant impacts on pension fund returns.

2, Stamp duty

1997 was also the year in which a graduated stamp duty was announced. Since then the threshold has increased from £60,000 to £125,000 (with a temporary increase to £175,000) and the rate for properties over £500,000 has doubled from 2pc to 4pc.

3, Tax credits

Gordon Brown would probably argue that tax credits are the most significant tax development. When he introduced the working families tax credit in the 1998 Budget, Gordon Brown said it would “..abolish the grotesque distortion where some low paid employees have had to pay back more than a pound for every extra pound they earn”.

4, Capital gains tax

Also in 1998, the Chancellor abolished the system of indexation for capital gains tax and introduced taper relief which provided an effective rate of 10pc on disposal of business assets and was looked upon as being a real boost for entrepreneurial businesses. In the 2007 Pre-Budget Report (PBR) nearly ten years later, taper relief was abolished and a flat rate of 18pc was introduced.

5, Benefits in kind

In the 1999 Budget the Chancellor extended employer national insurance contributions to all benefits in kind provided to employees whereas it had previously only applied to company cars and fuel. This imposed a considerable financial burden on some employers.

6, Environmental taxation

Over the course of the 1999 and 2000 Budgets climate change levy and aggregates levy were introduced to cut emissions and reduce pollution. Since then, along with landfill tax, these measures have been the cornerstone of the Government’s environmental policies.

7, Research and development relief

In the 2000 Budget small and medium-sized companies were given relief for expenditure on qualifying research and development and this was extended to large companies in the 2002 Budget to boost innovation and research in Britain.

8, Corporation tax rates

Of course Budgets are most famous for changing tax rates and Gordon Brown kicked this off by cutting the corporation tax rate from 33pc to 31pc in the 1997 Budget. It is now 28pc. A 10pc starting rate was announced in 1999, was reduced to 0pc in 2002 and was eventually abolished in 2005.

9, Income tax rates

In the 1999 Budget, the basic rate of income tax was cut from 23pc to 22pc, the 20pc rate was abolished and 10pc starting rate was announced. In the 2008 PBR, the basic rate was cut to 20pc and the starting rate was abolished for non-savings income. The most controversial change came in the 2008 PBR with the announcement of a 45pc rate (later amended to 50pc in the 2009 Budget) for high earners.

10, Holding companies

Over the course of a number of Budgets, a variety of measures have been introduced to create a regime to encourage holding companies to come to the UK. Such measures include double tax relief reform, the substantial shareholdings exemption, the dividend exemption and the new patent box rules