This page contains the key points from today’s Budget, including both personal and business tax changes:
The Chancellor delivered his Budget speech at 12.30 today. In what most experts have called a fiscally neutral delivery, most headlines will revolve around the decision to cut the addtional tax rate from 50% to 45% from 2013, and substantially increase the personal allowance from the same date. The continued attach on tax avoidance also figured strongly in George Osborne’s speech.
Businesses will strongly welcome the higher than expected cut in Corporation Tax from 26% to 24% from April this year, although the Small Profits tax rate remains at 20%.
Budget 2012 – Main Points
- Total borrowing is set to reach £126bn this year, although this is lower than originally forecast.
- The UK economy is expected to have grown by 0.8% in 2012, 2% in 2013, and 2.7% in 2014.
- More incentives will be provided to encourage export finance.
- An extension of The Finance Partnership and Enterprise Finance Guarantee Schemes.
- The introduction of a ‘Patent Box’ to enable companies with qualifying intellectual property to offset some profits against Corporation Tax from 2013.
- Enterprise loans may become available to school leavers who wish to set up their own businesses.
- Funding will be made for ultra-fast broadband in many of the UK’s largest cities
- TV production, computer gaming and animation industries will benefit from tax credits.
- A consultation will look at how unincorporated small businesses (with a turnover of up to £77,000) are taxed.
- Further consultation will be made on merging the income tax and National Insurance systems.
- Taxpayers will receive a personal tax statement letting them know how their taxes contribute to public spending.
- Corporation Tax rate for larger firms will be cut further. From April 2012, the main rate will cut by 2% to 24%, instead of 25%. By 2014, the rate will be 22%.
- Consultation on a new General Anti-Avoidance Rule (GAAR) to tackle tax avoidance, with a view to introducing it in 2013.
- Property purchases of over £2 million will be subject to the new stamp duty rate of 7%.
- Child benefits will be gradually eroded for taxpayers earning £50,000 or more (with no benefits at all for individual earning £60,000 or more).
- The buying and selling of properties through offshore companies will see increased taxes.
- The highest rate of income tax, on income of £150,000 or more, will be cut from 50% to 45% from April 2013.
- From April 2013, the personal allowance will be increased by £1,100 to £9,205.
- A limit on uncapped income tax reliefs is to be introduced. For claims of £50,000 or more, there will be a cap of 25% on income, or £50,000 – whichever is greater.
- The annual threshold for VAT registration will be raised to £77,000 from April 2012.