Budget Update
22nd June 2010
- Overview - Mixed for most business owners - lower Corporation Tax, but VAT Increased to 20% and potentially higher Capital Gains Tax for higher rate taxpayers.
- Corporation Tax for Small Companies - Rate to reduce from 21% to 20% from April 2011 - this is against a previous Labour plan to raise the rate to 22%.
- Capital Allowances for Small Companies - Annual Investment Allowance reduced from £100K to £25K. Ongoing writing down allowance reduced from 20% to 18%.
- Personal Tax -
Personal Allowances from April 2011 increased to £7,475 (£622.83 per month, £143.73 per week) but lower higher rate threshold makes this neutral for higher rate taxpayers. 50% tax rate to remain in place. Higher rates tax kicks in once total earnings reach £43,435 in 2009/10. Personal Allowances restricted for those earning over £100,000 and removed completely for people earning over £112,500.
- National Insurance - Increase for both employee and employer contributions by 1% from April 2011 - NI will total 24.80% of wages. Increased lower threshold for employers NI will broadly offset the rate increase.
- Capital Gains Tax -
Gains over the threshold are taxable at a rate of 18% for lower rate taxpayers and 28% for higher rate taxpayers. Entrepreneurs relief ramains at 10% for business assets with the lifetime allowance increased to £5M.
- Inheritance Tax - Threshold
remains at £325,000.
- VAT Rate - Vat rate increased to 20% from 4th January 2011.
- Self Employed National Insurance
- Class II National Insurance raised to £2.40 per
week (2009/10).
- Select the Useful Websites page to access the H M Treasury Budget Pages
