Budget 2012 - update
The Chancellor announced the latest budget on 21 March 2012.
Here’s a brief summary of the main changes:
Business
- Corporation tax will be cut by an additional 1% – from April 2012 this will be now be 24%, reaching 22% by 2014. No changes announced to the lower rate of 20%.
- New enterprise zone announced for Wales and Scotland.
- Possible enterprise zone status for Northern Ireland, which could prove 100% tax relief on plant & machinery expenditure.
- Tax credits announced, via a suspect reference to “Wallace and Gromit”, for video game development, animation and TV production within the UK.
- Extension of 100% capital allowances on energy efficient cars.
- Consultation on cash accounting basis for businesses with turnover up to £77,000 (i.e. qualifying businesses would only pay tax on monies received in any tax year).
Personal Tax
- Personal allowances to be raised to £9,205, effective from April 2013.
- Top rate of Income Tax (Earnings £150,000 +) reduced from 50% to 45%, effective from April 2013.
- Income tax relief will be restricted to 25% of income or £50,000, whichever is higher. This will include gift aid (cash gifts and shares/land).
- Age related Personal Allowances will be simplified for the eldery.
- Basic State Pension to increase by £5.30 / week.
- The Child benefit threshold has been amended, so that any household with a taxpayer earning £50,000+ will suffer a gradual decrease in their benefits. No benefit is available if earnings exceed £60,000.
Stamp Duty Land Tax (SDLT)
- Residential properties (£2m+) sold through a corporate structure will attractive 15% SDLT, effective immediately.
- Similar properties (£2m+) sold personally will attract 7% SDLT.
Alcohol and Tobacco
- Duty rates remain unchanged at 2% above inflation.
- Duty on tobacco rise 5% (c. 37p on a pack of cigarettes).
If you would like to discuss this article, please contact Nigel Morrow.
