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Emergency Budget 2010
PERSONAL TAX SUMMARY
Capital gains tax
- Higher rate tax payers will pay 28% from midnight on 22 June 2010
- Low and mid-income savers will continue to pay 18%
- CGT for entrepreneurs will be extended to the first £5m of
lifetime gains
- The annual exempt amount for capital gains tax will remain at £10,100
for 2010-
National insurance
- National insurance rates for employees will increase by 1% in April
2011
- Employers' NIC will increase by £21 a week above indexation
Personal allowances
- Personal allowance for under 65s will be increased to £7,475
from April 2011, worth £170 to basic rate taxpayers (lower than
the £10,000 predicted)
- The basic rate limit will be reduced by £2,500 and the higher
rate threshold by £1,650.
- The national insurance upper earnings/profit limit will also be
reduced to keep it in line with the income tax higher rate threshold
Income tax
- The basic rate limit for income tax will be frozen in 2013-14 to
help fund increases in personal allowance
Pensions
- State pension to be relinked with earnings from April 2011
- Basic state pension to go up every year by highest of earnings,
inflation or 2.5%
- The government will accelerate the increase in state pension age
to 66
Non-doms
- The government has pledged to review the tax conditions for non-domiciled
individuals
SMALL BUSINESS SUMMARY
Corporation tax rates
- Main rate of corporation tax is to be reduced to 24% over four years
- The small companies rate is to be cut from 21% to 20% from April
2011
Capital allowances - the practical impact
- Writing-down allowances on plant and machinery reduced from 20%
to 18% per year from 2012 for main rate pool; and from 10% to 8% per
year for longer-term special rate pool assets.
- Annual Investment Allowance to be reduced to a maximum of £25,000
from 2012.
National insurance
- The planned NI rate rises will go ahead from April 2011, and the
threshold will rise by £21 per week for employers' NIC.
- Start-up businesses outside London and the South East to be exempt
from NI for first 10 employees. Tax break, worth up to £50,000
for 400,000 businesses, is expected to last three years and will allow
businesses to avoid NI for 12 months
VAT
- VAT will increase to 20% from 4 January 2011
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