News

Budget 2012 - Key Points

21 - 03 - 2012

Budget 2012 - The key points that may affect our clients are shown below:

Income Tax

As of 06 April 2013:

• Top rate of income tax will reduce from 50% to 45%;

• Personal Allowance increased to £9,205 from £8,105;

• Age related personal allowances to be phased out to create a single personal allowance.

Child Benefit

•To be phased out if someone in household has an income greater than £50,000 (currently £45,000). Benefit will decrease by 1% for every £100 earned over £50,000 so that anyone earning more than £60,000 will lose all the benefit.

Pensions

•Introduction of an automatic review of state pension age to ensure it remains in line with increasing life expectancy.

•A new single tier state pension for future pensioners set at £140 and based on contributions.

Corporation Tax

• As of 06 April 2012 full rate of corporation tax reduced to 24%;

• By 2014 corporation tax will be 22%;

Business

• Government considering enterprise loans for young people starting new businesses.

• Sunday trading laws to be relaxed starting 22 July 2012 for 8 Sundays during Olympics and Paralympics.

• Enhanced capital allowances for businesses starting up in new Scottish enterprise areas.

• New Welsh Enterprise Zone in Deeside.

Fuel

•No change to existing plans. The existing fair fuel stabiliser means above inflation rises in fuel duty will return if oil falls below £45 per barrel.

•Vehicle Excise Duty to rise by inflation except for road hauliers when will be frozen.

Infrastructure and Transport

• Superfast broadband and WiFi to be funded in top 10 UK cities.

• Future of aviation in South East report to be published summer 2012.

• Improvements to rail network around Manchester.

Housing Industry

• As of midnight 21 March 2012 residential house worth more than £2 million will have a new stamp duty level of 7%.

• Homes worth more than £2 million bought through a company will pay stamp duty of 15%.

• Additional funding to be made available to help construction firms build new homes.

VAT

• Eradication of anomalies in VAT for example hot food from cafes as opposed to from supermarkets;

• Exemptions for food, children’s clothes, books and newspapers to be retained.

Alcohol

•No change to existing plans

Cigarettes

•Duty on all tobacco products will rise by 5% above inflation as of 18:00 hours on 21 March 2012. This is equivalent to 37 pence on a packet of cigarettes.

Gambling

•New duty on gaming machines of 20%.

•Gaming machines with prizes of 5% and less of net takings will have a lower rate.

If you would like to know more about how the budget may affect your contracting business you can contact Foremans LLP on 01244 625500.