The key points announced are as follows:
- VAT – increase to 20% from 17.5% from 04/01/11
- Corporation Tax – the small companies rate will decrease from 21% to 20% as from 01/04/11
- Annual Investment Allowance – will decrease from £100k to £25k in 2012-13. This is the amount of immediate tax relief you can get when you purchase capital items. In reality, many small businesses struggle to spend £25k per year.
- Writing down allowance – reducing from 20% to 18% - this is the amount of tax relief that you get on capital purchases that do not qualify for tax relief under the annual investment allowance. Again, not expected to have a great impact on small businesses.
- Employer’s NI to increase 2011-12
- Personal allowance to increase by £1k in April 2011 – this is the amount which can be earned before tax is payable
- Capital Gains Tax – increase from 18% to 28% for higher rate earners only as from 23/06/10
- State pension age to increase to 66 years