How was the Budget Darling!
No huge shocks with duty increases on high value home purchases and the usual culprits: beer, tobacco and petrol!
Income Tax and Personal Allowances. No change to rates previously announced. The changes previously announced mean the following changes from 6th April 2010:
New 50% tax band on earning over £150,000.
Tax rates and personal allowances unchanged from tax year 2009/2010. Although personal allowances which reduce by £1 for every £2 earned over £100,000.
National Insurance:From 6 April 2011, employer’s NIC will increase by 1.0% to 13.8% and, for employees, NIC will increase by 1.0% bringing the rate for those above the upper earnings limit to 2.0%.
Capital Gains Tax remains at 18%. Entrepeneurs' Relief band increased from £1m to £2m (where qualifying sales are taxed at 10% giving a potential increase in tax saving of up to £80,000).
From 6th April the ISA limit increases to £10,200 (£5,100 can be cash) and will grow annually in line with inflation.
Pension Contributions: Tapered restriction to basic rate relief will commence from 6th April 2011.
Buying a new home. A 2 year exemption for new buyers buying a home for less than £250,000 (giving a maximum saving of £2,500).
From April 2011 stamp duty on properties over £1,000,000 increases from 4% to 5%.
VAT remains at 17.5%.
2% increase on duty on beer, wine and spirits. Tax on cider increased by 10% above inflation. Tobacco duty increased by 1% above inflation. 3p rise in fuel duty to be staged in (1p in April, October and January 2011).
If you are a contractor working in the UK and would like to see how all this will affect your earnings for the forthcoming tax year please call PayMatters on 0800 121 6513 for a free tax calculation.