The following changes to UK taxation were announced in this year’s emergency budget:-
INHERITANCE TAX
The nil rate band for Inheritance Tax will remain frozen at £325,000.00 per person until 2014.
CAPITAL GAINS TAX
1. From 23rd June 2010 Capital Gains Tax (CGT) will increase from 18% to 28% for Higher Rate (40%) and Additional Rate (50%) Income Taxpayers and trustees of relevant property trusts.
2. The Annual Exempt Amount will remain at £10,100.00;
3. Entrepreneur’s relief will be increased to the first £5million of qualifying gains made over a lifetime.
INCOME TAX & NATIONAL INSURANCE
1. Additional Rate of Income Tax (50%) on income over £150,000.00 will remain from April 2010;
2. Income Tax Personal Allowance for people aged under 65 will increase from £6,475.00 to £7,475.00 from 6th April 2011, but the Allowance for those with incomes over £100,000.00 will be reduced, tapering down to zero;
3. The point at which individuals start to pay the higher rate of Income Tax (40%) will be frozen in 2012-13 at the same level as that in 2011-12 (to be announced in the autumn);
4. Tax relief on pension contributions will still be restricted for gross incomes greater than £150,000.00 from April 2011, and the government intends to restrict the generosity of tax relief on pension contributions by reducing the annual allowance;
5. Employee, employer and self-employed rates of National Insurance Contributions (NICs) will still increase by 1% from April 2011, but the threshold at which employers start to pay National Insurance will be raised by £21 per week above indexation;
6. Outside the Greater South East region, new businesses will be exempted from up to £5,000.00 of Class 1 NICs for each of their first 10 employees hired within a set 3 year period;
7. Annual ISA limit remains at £10,200.00 from April 2010 and will increase annually in line with inflation.
STAMP DUTY LAND TAX
1. Stamp Duty Land Tax holiday for first-time buyers purchasing a property worth up to £250,000.00 will remain from 25th March 2010 for two years;
2. Stamp Duty Land Tax will still increase from 4% to 5% on properties worth £1million or more from April 2011.
VAT
The standard rate of Value Added Tax (VAT) will rise from 17.5% to 20% from 4th January 2011. VAT on food, children’s clothes and books will remain at 0% and VAT on domestic fuel and power will remain at 5%.
CORPORATION TAX
1. The Main Rate of Corporation Tax will be reduced to 27% from 1st April 2011, to 26% from April 2012, to 25% from April 2013 and to 24% from April 2014;
2. The Small Profits Rate of Corporation Tax will be 20% from April 2011.
© Harold Michelmore 2010
Please note that the information and advice in this Note is provided for general guidance only. We believe it is accurate and up to date, but you must seek personal advice on any specific case or matter. We cannot accept liability for your reliance only on information or advice in this note.
If you would like further advice please contact Mr Charles Cooper:-
email: cjac@haroldmichelmore.co.uk
telephone: 01626 332266 |
