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Budget 2011: At a glance

HM Williams Accountants, author of Lawpack's 101 Ways to Pay Less Tax and winner of the prestigious Butterworth Tolley Best Tax Team Award, outline the changes to the tax rates for 2011/12.

Red text = tax year 2011/2012; Blue text = tax year 2010/11

INCOME TAX

Band	From	To	Rate
Starting rate for savings*	£0	£2,560 (was £2,440)	10%
Basic Rate	£0	£35,000 (was £37,400)	20%
Higher Rate	£35,001 (was £37,401)	£150,000	40%
Additional Rate	£150,001		50%

*If your non-savings income is above this limit then the 10 per cent starting rate for savings will not apply

CAPITAL GAINS TAX (for individuals)

First £10,600 exempt (was £10,100 in 2010/11)

CORPORATION TAX

Band	From	To	Rate
Small Companies Rate	£1	£300,000	20% (was 21%)
Marginal Relief	£300,001	£1,500,000	27.50% (was 29.75%)
Main Rate	£1,500,001		26% (was 28%)

PERSONAL ALLOWANCES

Personal**	£7,475 (was £6,475)
Personal (aged 65 to 74)	£9,940 (was £9,490)
Married Couples (aged less than 75 )*#	N/A
Personal over 75	£10,090 (was £9,640)
Married Couples over 75*#	£7,295 (was £6,965)

**From the 2010/11 tax year the Personal Allowance reduces where the income is above £100,000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
All four higher age allowances are only available for incomes up to £22,900 for 2010/11 and £24,000 for 2010/11
* = relief restricted to 10%, # = husband or wife must be born before 6th April 1935

NATIONAL INSURANCE 

Class 1 (Employment)

Employee (not contracted out)

Earnings per week - up to £139 (was £110)	Nil
Earnings per week - £139-£817 (was £110-£844)	12% (was 11%)
Earnings per week - over £817 (was £844)	2% (was 1%)

Employer (not contracted out)

Earnings per week - up to £136 (was £110)	Nil
Earnings per week - over £136 (was £110)	13.8% (was 12.8%)

Class 2 (Self-Employment)

The old weekly stamp - £2.50 (was £2.40)
No contributions due if profits below £5,315 (was £5,075)

Class 4 (Self-Employment)

9% on profits between £7,225 and £42,475 (was 8% on profits between £5,715 and £43,875)
2% on profits over £42,475 (was 1% on profits over £43,875)

STATE PENSION

	Per Week	Per Year
Single	£102.15 (was £97.65)	£5,311.80 (was £5,077.80)
Married	£163.35 (was £156.15)	£8,494.20 (was £8,119.80)
Age Addition (Over 80)	£0.25	£13.00

VAT

• Threshold - £73,000 (was £70,000)
• VAT Rate - 20%

STAMP DUTY

• 5% over £1,000,000

CAR MILEAGE ALLOWANCE

• Up to 10,000 miles per annum - 45p (was 40p)
• Over 10,000 miles per annum - 25p 

More information on these tax changes, plus this tax rate table, will be found in HM Williams Accountants' tax guides 101 Ways to Pay Less Tax and Tax Answers at a Glance. Both books are currrently being updated and will be published on 29th April including all the latest Budget changes.

Published on: March 23, 2011

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