This tax year (2009/2010)

• Personal allowance increased from £6,035 to £6,475 (+7%).
• Higher rate tax (40%) starting level increased from £40,835 to £43,875 (+7%).
• Employee NIC 11% rate ceiling increased from £40,040 to £43,875 (+10%).
• Tax free CGT annual allowance raised from £9,600 to £10,100 (+5%).
• Inheritance tax nil rate band threshold raised from £312,000 to £325,000 (+4%).
• VAT rate unchanged at 15% until Jan 2010 when it will be raised to 17.5%.
• VAT registration threshold increased to £68,000.
• Stamp duty land tax starting rate point of £175,000 for residential property extended to 31st Dec 2009 (based on completion date)- from January 2010 the rate reverts back to £125,000.
• Capital allowances on motor cars will be based on CO2 emissions and not price-new cars with a CO2 rating of 160 gms/km or lower will get a 20%, annual, writing down allowance and higher than 160 gms/km will get a 10% writing down allowance.
• Rules allowing business losses to be carried back for 3 years, compared to 1 year, have been extended for a further 12 months to November 2010.
• Tax relief on pension contributions above £20,000 may be restricted to the 20% tax rate for individuals with taxable income over £150,000 (the rules are complex).

Next tax year (2010/2011)

• Corporation tax rate for small companies increases from 21% to 22%.
• New penalties for the late payment of monthly PAYE/NIC deductions come into force.
• New 50% tax rate for taxable income above £150,000.
• Personal allowances to be reduced, gradually, to nil on taxable income above £100,000.
• ISA savings limit to be increased for all savers from £7,200 to £10,200.
• Inheritance tax, nil rate band threshold to increase to £350,000 (+7%).

Next tax year plus one (2011/2012)

• NIC rate for employees to increase by 0.5% to 11.5% and for the self-employed by 0.5% to 8.5%.
• NIC additional (higher) rate to increase 0.5% to 1.5%.
• NIC employer rate to increase by 0.5% to 13.3%.
• Tax relief on all pension savings to be restricted to the 20% rate of income tax for taxable income above £150,000.

Other highlights

• Regulatory attacks on dividend income sharing arrangements within “husband and wife” companies were not mentioned.
• The names of individuals and companies who deliberately understate over £25,000 of tax will be publicised.
• Individuals and companies that have incurred a penalty for the understatement of tax of at least £5,000 will be subject to additional compliance and review for a period of 5 years.
• Between May 2009 and May 2010 owners of cars over 10 years old to be offered £2,000 to trade them in for a new vehicle, including vans.