22/06/10

Chancellor Osborne's 2010 Budget

There are very few reversals of announcements in Chancellor Darlings last budget, these are included below or overwritten on our report on that budget

BUSINESS

      • The main rate of Corporation tax will be decreased progressively by 1% pa from 1st April 2011, reducing from 28% to 24% by 2014. (profits over £1.5million)
      • The increase in the small companies rate of Corporation tax from 21% to 22% scheduled is cancelled. The rate will be cut to 20% from 1st April 2011. (profits up to £300,000)
      • Writing Down Allowance on fixed assets will be reduced from 20% to 18% as from April 2012 and the Annual Investment Allowance (100% on purchase) will be reduced from £100,000 to £25,000
      • The increase in national insurance contributions announced by Chancellor Darling (1% on employers and employees) will go ahead from 1st April 2011 but will be mitigated by an increase in the threshold by £21 per week above indexation. Also new businesses outside London and the South-East will be offered relief from the first £5,000 on their first 10 employees

 

PERSONAL

      • From 6th April 2011 personal allowance will be increased by £1,000 to £7,475 for taxpayers under 65 but the higher rate threshold will be lowered so only basic rate tax payers benefit.
      • Individuals earning below £20,000 pa will be protected from the rise in national insurance contributions by the increase in the threshold. Higher rate taxpayers will receive some relief due to the decrease in the higher rate tax rate threshold with which the upper limit on standard contributions is aligned.
      • The rate of Capital Gains Tax will increase on 23rd June 2010 from 18% to 28% for higher rate taxpayers, this is where earnings plus capital gains exceed the higher rate threshold. The life time limit for entrepreneur's relief (gains taxed at 10%) will be increased from £2million to £5million.
      • Households with income of over £40,000 will no longer eligible for tax credits .
      • Pensions and benefits will be uprated in line with the CPI rather than the RPI.
      • Insurance premium tax will increase by between 1% and 2.5% depending on the type of insurance (travel will attract the bigger increase).

 

26/03/10

Chancellor Darling's 2010 Budget

You should also remember a general election is due in the next few weeks and that any incoming government is likely to have its own budget!

A fairly non-budget, most of the tax increases were announced in the pre-budget report in December and were not referred to in the budget.

These were:-

      • Increase in national insurance contributions (both employer & employee) of 1% from April 2011
      • Freezing of personal allowances at 2009 level (£6475) for 2010
      • New rate of tax of 50% for those earning in excess of £150,000pa
      • Reduced tax relief on pension contributions for those earning in excess of £130,000 pa
      • Phasing out of personal allowances for those earning in excess of £100,000 pa
      • Deferral of increase in Inheritance tax threshold from £325,000 for four years

Announcements included:-

      • The 3p increase in fuel duty scheduled for April will be phased in, 1p in April, 1p in October and 1p in January 2011
      • Duty on cider to increase 10% above inflation from Sunday while beer wine and spirits by 2%. Tobacco duty to increase by 1% from midnight Wednesday – CIDER INCREASE CANCELLED BY CHANCELLOR OSBORNE
      • Stamp duty threshold for first time buyers to be increased to £250,000 for two years. Stamp duty on homes priced over £1 million to be increased to 5%
      • Limits on ISA investment to increase with inflation
      • Child tax credits to increase in 2012 for one & two year-olds by £4 per week

 

02/03/10

Compulsory Online VAT Return Submission

As from the April 1st 2010 all VAT registered businesses with sales exceeding £100,000/pa and all new registrations will have to submit their returns online and make payment electronically. For businesses that have previously submitted paper returns with cheques the first period for which this is compulsory is the first period beginning on or after the 1st April.

The procedure to register for online returns is set out at http://www.hmrc.gov.uk/vat/vat-online/moving.htm.

Anyone requiring assistance either to register or with paying electronically should contact Robert or Jane at this office immediately.

Budget Highlights (or lowlights) 2009

Chancellors Pre-Budget Statement  9/12/09

 

The main points affecting most people are as follows:

        • The ½% increase in national insurance contributions scheduled for April 2011 has been increased to 1% (both employers and employees). The starting threshold is to be increased so anybody earning less than £20,000 will not be worse off.
        • The standard rate of VAT will revert back to 17.5% as from 1st January 2010.
        • Personal Allowances and tax bands will not be increased in 2010 from current levels.
        • The planned increase in the small companies rate of Corporation Tax from 21% to 22% will be deferred for another year (until 2011).
        • Planned increase in inheritance Tax threshold from £325,000 deferred.

     

     

    PERSONAL

    The main news here is the introduction of a 50% income tax rate on earnings over £150,000 pa from April 2010, a restriction of relief on pension contributes to basic rate for those earning over £150,000 from 2011 and a phased withdrawal of the personal tax allowance for those earning £100,000 from April 2010.

    Other items include the car scrapage scheme, your ten year old car is now worth £2,000 on trade in, increases in fuel duty from September, increases in alcohol and tobacco duties from budget day and an extension of the stamp duty holiday until 31st December for properties under £175,000.