This paper sets out the main changes to direct tax rates and allowances announced in the Budget on 22 April 2009. It lists the principal personal allowances which will be available against income tax in the tax year 2009/10, and it outlines the conditions necessary for eligibility for these allowances.

This note looks at the Government's recent legislative proposals to prevent 'income shifting' - arrangements used by the main earner in a family businesses to divert part of his income through the business to another person in a lower tax bracket, often their spouse, to mitigate their overall tax bill. These proposals proved controversial, and in the Pre Budget Report in November 2008 the Government confirmed that it was deferring any legislation, but would keep the issue under review.