The Chancellor delivered some good news on the personal allowance threshold, which has increased to £9,205 and the top-rate tax threshold, which has dropped to 45%. A U-turn on child benefit reforms will mean fewer families will lose it, but you'll have to wait until 2013 for any of this to take effect.
It adds up to some small points:
- Personal allowance up another £1,100 to £9,205;
- Top-rate tax dropped to 45%; but 300,000 people will fall into the top-rate tax band as the threshold is reduced from £42,475 to £41,450.
- Semi-U-turn on child benefit reforms;
- New cap on tax reliefs set at 25% of total income for anyone claiming more than £50,000 in a year, but no significant change to pensions’ relief.
- Government pledged £20billion worth of guarantees to banks to encourage them to offer cheaper loans to small- and medium-sized businesses
- Simplification of the way small businesses are taxed from April 2013: firms turning over up to £77,000 will be taxed on the cash passing through their business.
- Corporation tax for small firms will remain at 20%; the basic rate will fall to 24% from April 2012, down from the current 26%; then reduce to 23% in 2012 and 22% in 2014.
- The 3.02 pence per litre fuel duty increase will take effect on 1 August 2012 as planned.
DNS will keep you posted and explain more as things begin to take effect.