An Overview of the Main Points
Personal Tax Allowances
An increase of £1000 in allowances for 2011/12 for those <65 years old.
The Basic Rate limit and the Upper Earnings & Profit limits for NIC have been reduced for 2011/12. (A method of ensuring that planned tax recovery from higher rate taxpayers will be secured)
NIC Primary Threshold to increase from April 2011 plus a 1% increase in Employer Costs and Self Employed contribution.
The Upper Earnings limits will stay in line with Higher Rate tax thresholds.
The level at which employers must pay NIC will rise by £21 per week above indexation.
A regional scheme to be introduced granting certain NIC exemptions on the first 10 employees in a first year of business.
Further changes to take effect from April 2011.
Reduction in any second income threshold from £50000 to £40000 for Child Tax Credit calculations.
First & second withdrawal rates for tax credits to be increased.
Removal of elements of Child Tax Credit & Working Tax Credit from 2012.
Increasing the child element of Child Tax Credit by £150 above indexation from 2012.
Further reductions in levels of in year income rises for disregard in tax credit calculations. Initially from £25000 to £10000 and then to £5000 from 2013.
Backdating of claims to only one month instead of three.
Falls in income of up to £2500 pa to be disregarded.
Main Rate down by 1%.
Small company rate cut to 20% from April 2011.
Maximum Annual Investment Allowance reduced from £100000 to £25000 from 2012.
Writing Down Allowances reduced by further 2% from April 2012.
Capital Gains Tax
Higher Rate Taxpayers to pay CGT at 28% after 23 June 2010.
Standard Rate Taxpayers continue to benefit from 18%.
Entrepreneurs Relief set at 10% for all Gains after the above date.
Entrepreneurs Relief extended from £2million to £5million.
No changes in personal exemption limits.
Standard Rate of VAT increases to 20% from 4 January 2011.
Flat Rate Scheme percentages will change to align with the above.
As time moves on & the economic position changes, it is possible that some measures will be amended. If considering tax planning measures based upon the above we would encourage you to talk to us about the implications before making decisions.