EMERGENCY BUDGET, JUNE 2010
MAIN FEATURES
VAT
Standard rate of 17.5% increased to 20% on 4th January 2011
New flat rates awaited
CAPITAL GAINS TAX
Immediate increase of 18% rate to 20%, but taxpayers whose income and gains fall below £37400 p.a. will continue to pay 18%.
Annual exemption remains at £10,100.
Entrepreneur's relief continues at 10%, and the lifetime limited is raised from £2M to £5M.
Any contracts signed before 23 June 2010 will be taxed at 18%.
INCOME TAX
Personal allowance 2010/2011 increased by £1,000 to £7475. To avoid this extra allowance being applied to higher rate taxpayers, the 40% threshold will be reduced.
BENEFITS
Child Benefit frozen until April 2014.
Tax credits to be withdrawn over time from families with total income over £40,000.
Child Trust Funds to be phased out.
PENSIONS
State pension age to be extended.
From April 2011 the state pension to be linked to the greater of the annual increase in earnings, or prices, or 2.5%.
Tax relief for pension contributions to be capped at around £35,000 per person from April 2011.
FURNISHED HOLIDAY LETS
Proposed changes under labour scrapped, so old rules still apply subject to increasing number of days available to let and actually let.
Businesses
Small corporation tax rate down from 21% to 20% April 2011. Applies to companies with profits up to £300,000 and no associated companies.
Large company rate down from 28% to 27%, and then to fall by 1% each year until 24%.
Capital allowances – Annual investment allowance of 100% applies to expenditure up to £25,000 not £100,000 from April 2012.
Writing down allowance of 20% reduced to 18% same date.
NIC
NI rates to go up by 1% from April 2011.
Details, including self-employed rates and thresholds to follow
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