A 'Considered' Budget review

We know the budget took place over a month ago but this summary is based on a considered appraisal rather than on an overnight ‘rushed’ response.

The main rate changes are shown in a neat downloadable format which can be downloaded here.

The rates of national insurance have risen by 1% but from 11% to 12% this is an increase of 9% really. For employers the jump is really by 7.8%.

Employees can counter this if they are paid up to £136 per week or £589 per month as this will give them;

1.       No employee or employer national insurance

2.       No tax if this is their only income

3.       A ‘credit’ towards their State Pension – as if they had paid contributions.

Those using fuel on private journeys paid for by their employer will pay tax based on a yearly figure of £18,800 (2010/11 £18,000)

The mileage rate for claiming the use of your own car or van on business increases to 45p per mile at last!

If you receive employer supported childcare and you are a higher rate taxpayer then you will only save tax at 20% - unless you joined the Scheme before 6 April 2011.

Businesses can still claim 100% deduction against profits basically when the buy up to £100,000 worth of equipment before 1/6 April 2012. Then it falls to the first £25,000 you spend.

Corporation tax reduces to 20% per year on company profits.

From 1 April 2012 all traders will have to file their VAT returns online and pay their VAT bills electronically.

Please contact us if you would like any further information