The Chancellor, George Osborne, outlined his budget as one which “encourages enterprise” and “supports exports, manufacturing and investment” with the aim of “reforming the nation’s economy, so that we have enduring growth and jobs in the future”.
The changes introduced in the budget will affect individuals and businesses according to their particular circumstances and as with any budget it is worth reviewing these changes with your accountant. Aside from changes in rates such as personal allowances the key measures within the budget are set out below.
- Mileage allowances for employees - to be increased from 40p per mile to 45p per mile
- Fuel – duty falling immediately by 1p with the rise due in April being postponed for 1 year
- Non-domiciled tax – Charge to be raised for those living in the country more than 12 years. Tax removed when monies are remitted to the UK for investing within a UK company
- Inheritance tax – those leaving 10% or more to charity will have 10% taken off the inheritance tax rate
- Corporation tax – The rate of corporation tax was due to fall by 1% in April. A reduction of 2% will now apply with further annual reductions of 1% for the following 3 years
- Business Rates – the small business rate relief scheme is to be extended to October 2012
- Business start ups and those employing less than 10 people – will be exempt from new domestic regulations for 3 years
- Enterprise Investment Scheme – business tax relief to increase from 20% to 30% with entrepreneurs’ relief increasing to £10million.
- Small company research & development tax credit – rises to 200% in April and to 225% in 2012
- Short Life assets – Time limit on capital allowances being doubled to 8 years
- Enterprise Zones – Among 21 new zones across the country, one is to be created in London bringing business rate discounts, superfast broadband and simpler planning.
- VAT – threshold increased to £73,000
- Tax & NI – a review is to take place with a view to combining these regimes at some stage in the future
- IR35 - to be retained
- Tax reliefs – 43 tax reliefs to be abolished