Corporation tax: Small companies will now pay 20% (instead of the current 21%) from April 2011. Large companies with a taxable profit of more than £1.50 million will pay 28% in the year 2010, 27% in 2011, 26% in 2012, 25% in 2013, and 24% in 2014
Income tax: Personal allowance for those aged below 65 years has been increased by £1,000 to £7,475 and the 40% tax rate is likely to start above a threshold earning level of £ 42,375. These changes are effective April 2011.
VAT: The standard rate goes up by 2.50% to 20% from 4 January 2011 whilst the reduced rate (on items like domestic electricity and gas payments, energy saving equipments, children’s car seats etc) will remain at 5%
Capital gains tax: This has become less attractive for higher-rate taxpayers (those in the 40% tax bracket and above) who will pay 28% from 23 June 2010 instead of the previous 18%. Entrepreneurs, however, can now pay 10% on capital gains made over their lifetimes on the first £5 million gains they make, rather than £2 million previously.
National Insurance: From April 2011 the threshold level at which employers pay National Insurance will rise by £21 a week, lowering the cost of employing people earning less than £20,000. Persons who set up a new business outside London, the south-east and the eastern regions will be exempt from up to £5,000 of employer national insurance for each of their first 10 employees hired.
Bank tax: Effective 01 January 2011 banks and building societies will be taxed, at 0.04% to start with, on the size of their balance sheets. The more savings they have, the less tax they pay.
Tax relief for the video games industry is being scrapped.
Taxation of non-domiciled individuals: The Chancellor has announced that the Government will review the taxation of non-domiciled individuals.
Watch this space for more updates in the days to come!
