|
We are all on hold |
| After
last year’s spectacular raid on the higher earners,
this year there is nothing more than a ‘steady
as she goes’ pre-election Budget, but we all know
that the public finances are not ‘steady as she
goes’ so we can expect a radical Budget within
a year of the new Government – whatever the outcome.
|
There were no major changes to:
• |
Income
Tax |
•
|
Capital
Gains Tax (other than the doubling of Entrepreneurs
Relief from £1,000,000, to £2,000,000) |
•
|
Inheritance
Tax (other than announcing that the tax free allowance
(currently £325,000 per person) is frozen
until after 5 April 2015 |
• |
Corporation
Tax |
• |
VAT |
• |
Spousal
remuneration for owner managed companies (good!) |
|
| But
there are three things to mention: |
Women
(and men)
This was announced several years ago but, from now on,
women turning 60 are in transition for State Pension.
In five years time women will receive State Pension
at the age of 65 - between now and then, for every month
you were born after 5 April 1950, your State Pension
is put back by a month. And in subsequent years the
pension age, for men and women, will gradually be put
back to (at this stage) age 68. If you are interested,
try the State Pension Profiler at: www.direct.gov.uk. |
Business
tax
The Annual Investment Allowance (which allows businesses
to deduct the full amount of capital expenditure (other
than on buildings and cars)) was doubled from £50,000
to £100,000. This is part of the ‘Capital
Allowance’ regime. |
| Stamp
Duty
There was the introduction of a new 5% rate of Stamp
Duty on houses purchased for over £1,000,000 from
5 April 2011.
There is also a two year period for first time buyers
to purchase their main residence where the price is
below £250,000 without paying Stamp Duty. The
two years began on 25 March 2010. |
|
There are also the changes announced last year
– remember these? |
The 50% tax rate
From 6 April 2010 the top rate of Income Tax rises to
50% for those with taxable income above £150,000.
|
| The
scrapping of the Personal Allowance
From 6 April 2010 the Personal Allowance is gradually
removed for those with taxable income above £100,000. |
|
Increase in National Insurance
National Insurance will rise by 0.5% for employees,
the self-employed and employers from 5 April 2011. This
is the measure that is currently causing political unrest. |
The removal of higher rate tax relief on pension
contributions
From 6 April 2011 certain pension contributions will no
longer attract higher rate tax relief for those with taxable
income above £150,000 (now reduced to £130,000
and restrictions are already in place). |
|
Please ask if you have any queries on any aspect of
the Budget. And finally, Rates and Allowances for 2010
and 2011 are set out below:
|
Rates and Allowances for 2010
and 2011
| Income
Tax |
2009-10 |
2010-11 |
| Allowances
|
£ |
£
|
| Personal
allowance *
Personal allowance for people aged 65 - 74
Personal allowance for people aged 75 or more |
6,475
9,490
9,640 |
6,475
9,490
9,640 |
| Income
limit for age-related allowances |
22,900 |
22,900 |
|
Married couple’s allowance – aged 75 or more
Minimum amount of married couple’s allowance
Blind person's allowance |
6,965
2,670
1,890 |
6,965
2,670
1,890 |
| Taxable Bands |
|
|
Starting
rate for savings 10%
Basic rate 20%
Higher rate 40%
Additional rate 50%
|
0
– 2,440
0 – 37,400
> 37,400
N/A |
0
– 2,440
0 – 37,400
37,401–150,000
> 150,000 |
* From April 2010 the Personal
Allowance will be gradually withdrawn for income over £100,000
at a rate of £1 of allowance lost for every £2 over
£100,000 until it is completely removed.
| Capital Gains Tax
|
2009-10 |
2010-11 |
| Annual exempt amounts:
Individuals etc.
Other
trustees |
£10,100
£5,050
|
£10,100
£5,050
|
| Standard rate |
18% |
18% |
| Inheritance
Tax |
2009-10 |
2010-11 |
| Threshold |
£325,000 |
£325,000 |
| Rate |
40% |
40% |
| Corporation Tax |
Profits 2009-10 &
2010-11 |
| Small
companies' rate 21% |
£0
– £300,000
|
| Marginal
relief |
£300,001 – £1,500,000 |
| Main
rate 28% |
£1,500,001 or more |
| Capital
Allowances |
2009-10 |
2010-11 |
| Annual
Investment Allowance |
£50,000 |
£100,000 |
| Writing
Down Allowance |
20% |
20% |
| Value
Added Tax (VAT) |
2009-10 |
2010-11 |
| Registration
threshold |
£68,000 |
£70,000 |
| De-registration
threshold |
£66,000 |
£68,000 |
| National Insurance
|
2009-10 |
2010-11 |
| Class
1 Employees |
| On
first |
£110
pw |
Nil
|
£110
pw |
Nil
|
|
Between
|
£110 - £844
pw |
11%
|
£110 - £844
pw |
11%
|
| Over
|
£844
pw |
1% |
£844
pw |
1% |
| Employee's
contracted-out rate |
1.6% |
|
1.6% |
Married
womans
reduced rate |
4.85%
of £110 to £844 pw, 1% above £844 |
4.85%
of £110 to £844 pw, 1% above £844 |
| Class
1 Employers |
| On
first |
£110
pw |
Nil
|
£110
pw |
Nil
|
| Over |
£110
pw |
12.8%
|
£110
pw |
12.8%
|
| Employers'
contracted-out rebate, salary related schemes |
3.7% |
|
3.7% |
| Employers'
contracted-out rebate, money purchase schemes |
1.4% |
|
1.4% |
| Class
2 Self employed |
| Flat
rate |
£2.40
pw |
|
£2.40
pw |
| Small
earnings exception |
£5,075
pa |
|
£5,075
pa |
| Special
Class 2 rate for volunteer development workers |
£4.75
pw |
|
£4.85
pw |
| Class
3 Voluntary |
| Flat
rate |
|
£12.05
pw |
|
£12.05
pw |
| Class
4 Self employed |
| On
profits between |
£5,715
- £43,875 pa |
8%
|
£5,715
- £43,875 pa |
8%
|
| |
above £43,875 |
1% |
above £43,875
|
1% |
Stamp
Taxes
Transfers
of property (consideration paid)
| Rate |
All
land in the UK |
Land
in disadvantaged areas |
| |
Residential |
Non-residential |
Residential |
Non-residential |
| Zero |
£0
- £125,000 |
£0
- £150,000 |
£0
- £150,000 |
All |
| 1% |
Over
£125,000 – £250,000 |
Over
£150,000 – £250,000 |
Over
£150,000 – £250,000 |
N/A |
| 3% |
Over
£250,000 – £500,000 |
Over
£250,000 – £500,000 |
Over
£250,000 – £500,000 |
N/A |
| 4% |
Over
£500,000 |
Over
£500,000 |
Over
£500,000 |
N/A |
New
leases (lease duty)
Duty
on the premium is the same as for transfers of land (except
that special rules apply for non-residential land and property
premium where rent exceeds £1,000 annually. The rules
no longer apply to residential property from 12 March 2008).
Duty on the rent is charged on any part of the net present
value (NPV) which exceeds the threshold.
| Rate |
Net
Present Value of Rent Rate |
| |
Residential |
Non-residential |
| |
Slice
of NPV |
| Zero |
£0
- £125,000 |
£0
- £150,000 |
| 1% |
Over
£125,000 |
Over
£150,000 |
The rate
of stamp duty / stamp duty reserve tax on the transfer of
shares and securities is unchanged at 0.5% for 2009-10. |
