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The 2011 Budget at a glance: 23/03/11

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News - 23 March 2011

The 2011 Budget at a glance: 23/03/11


2011 growth forecast downgraded from 2.1% to 1.7%
2012 forecast also down from 2.6% to 2.5%
Inflation set to remain between 4% and 5% in 2011


• No new personal tax rate increases.
• Personal tax allowance to increase a further £630 to £8,015 in April 2012. The basic rate limit will be reduced at the same time to £34,370 to ensure no additional higher rate taxpayers are created, so most basic and higher rate taxpayers will gain from the increase in personal allowances by the same amount.
• The tax free allowance from April 2011 is to increase to £7,475.
• Consultation on long-term plan to merge income tax and National Insurance.
• 50% top rate of tax to remain but there will be a review of how much it raises.
• The taxation of non-domiciles saw further changes for next year, when the £30,000 charge for those who have lived in the UK for seven years will rise to £50,000 for those who have been here for 12 years.
• The ISA limits, as already announced last October, are £10,680 and £5,340 for the cash ISA.


• The Annual Exemption amount on which no Capital Gains Tax is payable is to increase to £10,600 from £10,100 with effect from 6th April 2011.
• The lifetime limit on gains qualifying for Entrepreneurs' relief doubled from £5m to £10m with effect from 6 April 2011. Subject to the existing criteria disposals of entrepreneurial businesses will qualify for Entrepreneurs’ Relief, with the qualifying gains taxed at 10%.


• The main rate of Corporation tax for companies making profits of more than £1.5M to be cut by 2% from April 2011 to bring it down to 26%.
• Small companies making profits of up to £300,000 will pay tax at 20% from April 2011 as previously announced, down from 21% up to March 2011.
• The Small Business Rates relief scheme was due to end on 30 September 2011, but has now been extended for an additional year. The scheme provides eligible small business ratepayers with small business rate relief at 100 per cent on properties up to £6,000 rateable value in 2010, (rather than the previous rate of 50 per cent), and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value.
• HMRC has confirmed through the Budget announcements that the Time to pay scheme will remain available and that the Business Payment Support Service will remain in place to advise viable businesses experiencing temporary financial difficulty.
• Changes to the rates of capital allowances proposed in June 2010 remain unaltered by the Budget announcements. These changes will come through in April 2012, and will see the Annual Investment Allowance reduced to £25,000, and the rates of writing down allowance reduce from 20% and 10% on the main and long life pool respectively to 18% and 8%.
• No new regulation on firms with fewer than 10 staff for three years
• New rules to require planners to prioritise growth and jobs
• £100m funding for science facilities
• 21 "enterprise zones" to be launched, backed by tax incentives


• the taxable turnover threshold, which determines whether a person must be registered for VAT, will be increased from £70,000 to £73,000.
• the taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £68,000 to £71,000.
• The government will require all remaining VAT customers i.e. those with turnover below £100,000 to file their VAT returns online and pay electronically from 1 April 2012.

• The amount per mile that an employee can be reimbursed tax free for business journeys (also known as Mileage Allowance) has remained fixed for nearly a decade at 40p per mile for the first 10,000 miles and 25p per mile thereafter. Finally the higher rate is being increased from 40p to 45p a mile.

• Council tax to be frozen or reduced this year across England
• Rise in air passenger duty to be frozen this year
• Private jet users to pay passenger duty for first time
• Tax avoidance clampdown to raise £1bn this year
• Support for families in the south-west of England with water bills


• Government-backed shared equity scheme to help 10,000 first-time buyers


• Funding for 12 further university technical colleges
• 40,000 new apprenticeships for young people out of work
• Funding for 100,000 work experience placements


• Long-term aim for £140 a week flat-rate state pension - not to apply to current pensioners


• £100m for repairing potholes in England
• £200m support for regional railways in England

• £2bn extra funding for Green Investment Bank - to launch in 2012


If you need any help and advice on the implications of the 2011 Budget, or any other Tax or Business matter, don’t hesitate, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial and business planning.
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds.marketing@netaccountants.net

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