2011 Budget Summary

24 - 03 - 2011

2011 Budget – Summary for Contractors.


Key points that may affect contractors:

  •  Business Mileage

Business mileage, for use of own car, has been increased from 40p to 45p for the first 10,000 miles. The 25p rate remains for miles over 10,000.


  1. Corporation Tax

The main rate of corporation tax has been reduced by a further 1% from 01.04.2011. However the small company rate, applicable to most subcontractors, remains at the 20% rate previously announced for 2011/12.


  1. Personal Allowances

As previously advised the 2011/2012 personal tax allowance will be £7,475. The 2012/13 personal tax allowance will be increased by £630 to 8,105.


  1. VAT

The threshold for VAT registration was increased to £73,000 turnover.


  1. IR35

IR35 remains and the government are committed to improving the way it is administered. This follows the guidance previously issued by the Office for Tax Simplification.


  1. Income Tax and NI

The government has a long term goal to combine the PAYE and NI regimes into one “simple tax”.






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Foremans LLP