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T71 - Pre-Budget Report.
We have summarised the key points of change from Chancellor
Alistair Darling’s 2008 Pre-Budget Report that we think are most likely to
affect you:
- For 2010/11, the personal allowance of £6,475 will be subject to an income
limit of £100,000. An individual’s personal allowance will be reduced by £1
for every £2 of gross income they have above the income limit up to a maximum
reduction of half of the personal allowance.
For those with income of above a second income limit of
£140,000, the amount of their allowance will be further reduced by £1 for
every £2 above this income limit up to a maximum of the full amount of
personal allowance.
- Non savings income and savings income over £150,000 will be subject to a
new 45% rate of tax.
Dividend income falling into the income band of over
£150,000 will be taxed at 37.5% rather than 32.5%.
- Class IV NIC currently payable by the self employed on profits between the
lower and upper profits limit, will increase from 8% to 8.5%, and from 1% to
1.5% on profits above the upper limit.
- Employees class I NIC will increase from 11% to 11.5% between the
threshold and upper earnings limit and from 1% to 1.5% on earnings above the
upper earnings limit.
- Employers class I NIC will increase from 12.8% to 13.3% on staff pay above
the upper earnings limit.
- The annual amount of pension contributions on which an individual is
entitled to tax relief will be frozen at £255,000 from 2011/12 to 2015/16. The
amount of lifetime allowance will be frozen at £1.8 million from 2011/12 to
2015/16.
- Expenditure on cars with CO2 emissions of less than 160gm/km or below will
get capital allowances of 20% on a writing down basis. Above 160gm/km will get
capital allowances on a writing down basis of 10%.
- Motorcycles will no longer be included within the definition of cars and
will qualify for the annual Investment Allowance
If you are have any specific questions about any of the
above, please call Priya on 020 8346 0391.
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