TAX

Total tax revenues

Alistair Darling is expected to admit that the economic slump will hit tax revenues hard, and oblige him to borrow big to plug the gap between his revenue and government spending. Last time he said he would raise £575 billion: the updated figure is likely to be tens of billions less.

The figure to watch for: £575 billion

Income tax

A new higher rate of income tax of 45 per cent will be introduced in April 2011. Today, the threshold at which it is paid may be reduced, perhaps to include those who earn more than £100,000 a year.

The figure to watch for: 45%

National insurance

National insurance contributions are due to rise by 0.5 per cent in 2011. They could also be fast-tracked or increased to 1 per cent, which would raise an extra £2 billion a year for the Treasury.

The figure to watch for: 0.5%

VAT

Value-added tax was cut from 17.5 per cent to 15 per cent in the Pre-Budget report in November, to give a boost to spending in the shops. The Chancellor may announce an increase to 18.5, 19 or as much as 20 per cent in future years. Every percentage point increase in VAT raises approximately £5 billion a year.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

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