Budget June 2010

The first budget of the coalition government was never going to be a popular one with a number of cuts and changes that will affect both individuals and employers. Here are some of the key points of the budget:

	Capital gains tax has been increased to 28% from 18%, for higher rate, and additional rate, tax-payers, effective from 24 June 2010
	The personal allowance for income tax will increase by £1,000 to £7,475 from 6th April 2011
	The small companies rate of Corporation Tax will be reduced to 20% from 6th April 2011
	Gradual reduction of the main rate of Corporation Tax from 28% to 24% over the next four years
	The VAT rate will increase to 20% from 4th January 2011
	Pensions have been affected by the removal of the requirement for a pension scheme member to buy an annuity at age 75, but there are also ongoing consultations regarding limitation of tax relief given on pensions.
	The Annual Investment Allowance will be cut from £100,000 to £25,000 from April 2012.  This may affect your planning if you are considering a large capital investment around this time
	National Insurance will increase by 1% from April 2011, to 13.8% for employers and 12% for employees. To slightly mitigate this, the threshold at which NI contributions become payable will increase by £21 per week for employers.
	It was confirmed that the “time to pay scheme” to ease cashflow for small businesses will be extended to the end of this Parliament.

As always, should you have any queries about how these changes will affect you, please feel free to contact us.”

Please note that all of this information is provisional only and subject to change after publication. Please do not make any financial decisions based on the above information without consulting a qualified advisor.