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Emergency Budget: Personal tax summary

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22nd Jun 2010
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A breakdown of the key personal tax measures in today's Emergency Budget report. Keep your eyes on this page as we'll be updating it throughout the day.

Capital gains tax

  • Higher rate tax payers will pay 28% from midnight on 22 June 2010
  • Low and mid-income savers will continue to pay 18%
  • CGT for entrepreneurs will be extended to the first £5m of lifetime gains
  • The annual exempt amount for capital gains tax will remain at £10,100 for 2010-11

National insurance

  • National insurance rates for employees will increase by 1% in April 2011
  • Employers' NIC will increase by £21 a week above indexation

Personal allowances

  • Personal allowance for under 65s will be increased to £7,475 from April 2011, worth £170 to basic rate taxpayers (lower than the £10,000 predicted)
  • The basic rate limit will be reduced by £2,500 and the higher rate threshold by £1,650. The national insurance upper earnings/profit limit will also be reduced to keep it in line with the income tax higher rate threshold

Income tax

  • The basic rate limit for income tax will be frozen in 2013-14 to help fund increases in personal allowance

Pensions

  • State pension to be relinked with earnings from April 2011
  • Basic state pension to go up every year by highest of earnings, inflation or 2.5%
  • The government will accelerate the increase in state pension age to 66

Non-doms

  • The government has pledged to review the tax conditions for non-domiciled individuals

Benefits and tax credits

  • Child benefits will be frozen for the next three years
  • Tax credits for families with income over £40,000 will be reduced from April 2011, with further changes planned for 2012-13
  • Lone parents whose youngest child is over five will be moved onto Jobseekers Allowance rather than receiving Income Support from 2011-12 to help them move back into work
  • There will be a shake-up of Housing Benefits from April 2011 onwards, which will include capping the maximum amount payable at £400 a week and restricting availability for those who can be expected to look for work
  • Those claiming Disability Living Allowance will have to undergo a medical assessment from 2013

 

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Replies (3)

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By kenny achampong
22nd Jun 2010 14:43

NI

And now that they are not going to behave like Mr Brown and announce things like NI rates long after the budget, what are the NI rates and allowances ?

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By Gina Dyer
22nd Jun 2010 15:05

NI

Detailed summary of NI measures can be found here:

https://www.accountingweb.co.uk/topic/tax/emergency-budget-national-insu...

 

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By markbrowning
23rd Jun 2010 12:46

Furnished Holiday Lets

Am I right in thinking that the previous government's abolition of the tax benefits for FHL have been reversed, so that it will continue to be possible to offset capital expenditure against FHL income?

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