This tax year (2010/11)-from April 2010 and other dates

• Personal allowance unchanged at £6,475 but reduces to nil over the salary range of £100,000 to £112,950
• Higher rate tax (40%) starting level unchanged at £43,875
• New 50% tax rate over £150,000pa
• NI rates unchanged
• Inheritance tax threshold unchanged at £325,000
• Capital allowances –annual investment allowance increased from £50,000 to £100,000 (you can write off fixed asset expenditure of this amount 100%)
• Corporation tax for small companies unchanged at 21% (up to £300,000profit) -above at 28%
• Tax free CGT annual allowance unchanged at £10,100
• CGT rate of 18% up to 22 June 2010. From 23 June 2010, gains are added to your income – if over higher rate level CGT is at 28% -otherwise at 18%
• Entrepreneurs CGT rate remains at 10% - and the lifetime limit increases from £2m to £5m.
• VAT rate will increase from 17.5% to 20% from 4 January 2011. Flat rate scheme %s will change

Next tax year (2011/12) - from April 2011

• Personal allowance increases by £1,000 to £7,475
• Higher rate tax (40%) starting level reduced to £41,375 –so that higher rate tax payers do not benefit from the increased personal allowance
• NI for employees – rate increase from 11% to 12%
  for employers – rate increases from 12.8% to 13.8%
  for self-employed –rate increases from 8% to 9%
• NI employee additional rate (after the upper earnings limit) increases from 1% to 2%
• Corporation tax for small companies reduced 1% to 20% (up to £300,000profit) -above at 27%

Next tax year plus one (2012/13) – from April 2012

• Corporation tax for small companies unchanged at 20% (up to £300,000profit) -above at 26%
• Capital allowances –annual investment allowance reduced from £100,000 to £25,000 (100% write off). Main writing down allowance reduced from 20% to 18%

Other key points
Furnished holiday lettings are favourably treated as income –both for properties in the UK and EEA. It was planned to withdraw this treatment from this tax year 2010/11, but this will now not happen. There is to be consultation about any plans to change the tax treatment from April 2011

Tax avoidance The drive to root out tax evasion and counter tax avoidance will continue. This year there was an offer to the medical profession to disclose undeclared income with a low 10% penalty. This may be extended to other professions. Consideration will be given to a general anti-avoidance rule (GAAR).

Employer NIC holiday for new businesses Qualifying new businesses set up after 22 June 2010 will be able to benefit from a three year scheme to be exempt from up to £5,000 of Class 1 employer NI for each of their first 10 employees hired in the first year of business – applies outside London, the South East and East England

Pensions Planned changes from April 2011(restrictions above £150,000 salary pa etc) will not be brought in. However there will be consultation on alternative approaches to be effective from April 2011. It is expected that the current annual allowance for pension contributions will be reduced from £255,000 to between £30,000 and £45,000 – a significant reduction.
From April 2011 the requirement to buy a pension annuity at age 75 will be increased to age 77

Tax credits Complicated package of measures designed to reduce spending on tax credits. The main thrust is to reduce entitlement to tax credits for households with income of £40,000 or more.

Electric vans A 100% first year allowance (reduces taxable profits) available for expenditure on new (not second hand) electric vans, purchased in the five years from April 2010

Late PAYE penalties There is now a system of charging interest and penalties on late payment of monthly PAYE