Spring is in the air and the new tax year is around the corner! Now is the perfect time to understand the effect of George Osborne’s Budget 2012, review your own or your business’s financial circumstances and make the necessary changes to ensure you get the most out of 2012!
We have selected the Budget changes which are most relevant to our clients and have included some key considerations for the end of the financial year. We will happily advise further on an individual basis, so please feel free to contact us.
Key Budget Changes:
Personal Tax Allowance (<65 yrs): Increase to £8,105 for 2012/13 and £9,205 for 2013/14
Income Tax Bands:
- 20% basic rate of first £34,370 of taxable income
- 40% higher rate on income between £34,371 and £150,000
- 50% additional rate on income over £150,000 (To decrease to 45% from April 2013)
Pension Contributions: No change in the tax relief rates or allowances, annual allowance remains at £50k for 2012/13.
VAT Registration Limits: The taxable turnover threshold has been increased to £77,000 from £73,000.
Corporation Tax: Remains at 20% for small company rate and reduces to 24% for the main standard rate.
Tax Simplification for Small Businesses: The Chancellor committed to a process of consultation on a number of tax simplification proposals for smaller businesses.
Stamp Duty Land Tax: Residential property sold worth in excess of £2m subject to 7% SDLT (effective 22/03/2012). Residential property worth in excess of £2m bought through a company will be subject to 15% SDLT. Future planning for non-residents and company structures remain important. You can still invest in commercial property and/or property funds without being subject to these changes.
Child Benefit Income Tax Charge: A tax charge of 1% of the full Child Benefit award of every £100 of income between £50k and £60k. Consider the worth of contributing to a pension fund, which will reduce your taxable income and avoid this charge.