Budget: How it will affect you
Chancellor George Osborne's first Budget heralds big changes to both the tax and the welfare systems.
He said the tough measures announced were "unavoidable" because he had to deal with the country's debts, but everyone would be "in it together".
According to the Treasury's own analysis, individuals will only be worse off, from the income tax and national insurance changes, once their income gets close to £50,000.
But the picture is different once all the VAT and benefit changes are taken into account.
From 2012, when many of the tax credit changes kick in, all households will be worse off, even the poorest.
Overall you will probably pay more. Taxes are going up, and the chancellor made no bones about it.
Firstly, VAT on goods and services is going up. On 4 January 2011, the main rate of VAT will rise from 17.5% to 20%.
This is a huge increase and will generate more than £13bn a year by the end of 2014-15.Continue reading the main story
Calculate VAT rise
How much more do things cost following the VAT rise to 20%?
However, zero-rated items, such as most food and children's' clothing - which do not attract the tax, will be spared over the course of this parliament.
As for income tax, the personal allowance is to be increased by £1,000 in April to £7,475.
This is part of the coalition' s plan to eventually raise the allowance to £10,000.
This first stage means about 23 million basic-rate taxpayers will pay up to £170 a year less, while 880,000 will pay no income tax at all.
To stop higher rate taxpayers benefiting from this, the starting point for paying higher rate income tax will be lowered from its current £37,400, to claw-back the benefit of the extra personal allowance. That date has not yet been named.
There will not be any new increases in duties on alcohol, tobacco or fuel after the rises announced by the previous Labour government in the March Budget.
In addition, the last government's plan to increase the duty on cider by 10% above inflation will be scrapped from the end of this month.
Capital Gains Tax (CGT) stays at 18% for low and middle-income earners, but from midnight taxpayers on higher income tax rates will pay 28% CGT.
This is likely to affect second-home owners, and those who own share portfolios, or art or antique collections.
However, their taxable gain still has to be more the existing annual allowance of £10,100 before capital gains tax is payable.
Meanwhile, the 10% CGT rate for entrepreneurs will be extended from the first £2m of qualifying gains to £5m.
The CGT changes, Mr Osborne said, should bring in an extra £1bn.
STATE BENEFITS AND TAX CREDITS
The new government wants to save lots of money on the welfare and benefits bill.
So, benefits, tax credits and public service pensions will be uprated each year in line with the consumer prices index, not the often higher retail prices index.
This is a big change that will eventually save the government £6bn a year.
The chancellor is planning to cut the cost of a variety of welfare benefits, the cost of which he said had got out of hand.
Tax credits - currently available to 4.7 million households - will be curbed for those earning more than £40,000 next year. That move will render 1.1 million households ineligible for such help from next year.
TAX CREDITS EXPLAINED
Currently tax credits are paid based on four criteria: children, people with disabilities, families and babies.
They go to families whose household income is less than £58,000 a year.
They are paid at three different rates, high for those bringing in less than £16,190 a year, a lower rate for households with under £50,000 and a reducing rate that falls away until a ceiling of £58,000 is reached.
Nine in 10 families with children can currently benefit from these payments.
In future, credits will be paid at the same rate for those earning £16,190 a year, and a reduced rate for those earning between that amount and £40,000.
To soften the blow, the child element of the credit will rise by £150 above inflation.
A reducing rate will then be paid, but that will cut off far sooner at just above £41,000 a year. Six in 10 families will be entitled to these payments by 2012-13.
However, the child element of the Child Tax Credit will rise by £150 above inflation for those earning less than £40,000.
Elsewhere, Mr Osborne said he would abolish the universal "health in pregnancy" grant from April 2011 - worth £190, and restrict the Sure Start maternity grant to the first child only.
Lone parents will now be expected to look for work when their youngest child goes to school.
Child benefit, to which all families are entitled, will be frozen for the next three years.
The government will also introduce a medical assessment for Disability Living Allowance from 2013 for new and existing claimants to try to cut down on the numbers claiming it.
And housing benefit will be restricted to a maximum limit of £400 a week, in a package aimed at saving £1.8bn a year by the end of this parliament.
All these welfare and benefit changes will save a massive £11bn a year by 2014-15.
From April 2011, the state pension will rise by the increase in average earnings, or move in line with prices or by 2.5%, if either of those two are higher.
And the government confirmed its intention to speed up the process of raising the state pension age to 66.
PUBLIC SECTOR WORKERS
A two-year pay freeze has been announced for workers in the public sector.
However, the 1.7 million of public sector employees who earn less than £21,000 a year - 28% of the total - will be "protected".
FULL BUDGET DOCUMENTS
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They will receive pay increases of £250 a year for each of those two years.
The government is also going to look at ways of making it cheaper to fund your public sector pension scheme which could well mean higher contributions or lower benefits.
The threshold at which employers will start to pay National Insurance will rise by £21 per week above indexation in line with inflation.
Meanwhile corporation tax will be cut next year to 27%, and by 1% annually for the next three years, down to 24%.
The small companies' tax rate will also be cut to 20%.