Wettone Matthews

Budget 2012 report

twettone@wmcca.co.uk (Tim Wettone) — Wed, 28 Mar 2012 01:03:00 -0700

This Report, which was written immediately after the Chancellor of the Exchequer delivered his Budget Speech, is intended to provide an overview of the latest announcements and recent measures most likely to affect you or your business.

Throughout this guide we have included tips and ideas for effective tax and financial planning, but it is important to remember that this planning should be an ongoing, year-round process, not something that is left until the last minute.

We can help you to reassess your plans regularly, and adapt them as your personal and business circumstances change. With our help, you can plan for a rewarding and financially secure future.

Please note: while most taxation changes take effect from the start of the financial year, or tax year, some may not take effect until 2013, or later. Where relevant, details of these changes have been included in this Report. Throughout the Report, ‘HMRC’ refers to HM Revenue & Customs.

Budget Highlights
Business Tax & Investment Incentives
Capital Taxes
Duties
National Minimum Wage
Income Tax & Personal Savings
Value Added Tax
Tax and Travel
National Insurance
Other Measures Announced
2012/13 Tax Calendar

Budget Highlights

Chancellor cuts 50p rate in a Budget to ‘reward work and support growth’

Chancellor George Osborne began his third Budget speech with a pledge to support working families, through ‘far-reaching reform’ of the UK tax system.

Asserting that Britain will avoid a ‘technical recession’ and will ‘earn its way in the world’, the Chancellor announced that the UK’s economic growth forecasts remain broadly unchanged from the Autumn Statement, with the growth forecast for 2012 revised upwards slightly to 0.8%.

The Chancellor’s statement contained some key announcements on personal and business taxation, including confirmation of a cut in the 50p headline rate of income tax. Confirming recent speculation, the Chancellor emphasised that the rate has ‘damaged competitiveness’ and raised ‘next to nothing’, although the reduction of the rate to 45p will not take effect until April 2013.

Meanwhile, personal tax allowances were also a significant focus of the Chancellor’s speech. With the income tax personal allowance set to rise to £8,105 next month, the Chancellor confirmed that a further rise in the income tax allowance will take place in 2013, taking the allowance to £9,205. Age-related tax allowances currently stand at £10,500 for those aged up to 74 and £10,660 thereafter. However, these allowances are to be frozen, and will stop for anyone turning 65 after 5 April 2013.

Among the key measures of significance for business was a doubling of the planned reduction in the headline rate of corporation tax, which will see the rate fall from 26% to 24% in April 2012. Individuals and partnerships in business whose turnover is up to £77,000, are also set to benefit from ‘radical reform’ of the tax administration system.

The tax cuts announced are to be funded by a clampdown on tax avoidance, together with the introduction of a new 7% Stamp Duty Land Tax on residential properties worth over £2 million, and a provision charging a 15% duty on certain high value purchases. A new cap will also be applied to previously uncapped tax reliefs, set at a rate of 25% of total income (or £50,000 if greater) for those claiming relief of more than £50,000 a year.

Controversial plans to withdraw Child Benefit for higher rate taxpayers have also been modified, with the Chancellor announcing that the benefit will be clawed back by 1% for every £100 of earnings in excess of £50,000 a year, with only those earning over £60,000 losing the benefit entirely.

Despite recent campaigns, the Chancellor stated that there would be no change to the Government’s plans for fuel duty, meaning that the scheduled 3p rise will take place in August. The price of tobacco, meanwhile, will see an increase of 5% above inflation.

Additional measures announced include the introduction of tax credits for the video games, animation and high-end television production sectors, a new annual statement of Government spending for taxpayers, and a temporary relaxation of Sunday trading laws, to cover eight weekends during the Olympics and Paralympics.

Business Tax and Investment Incentives

Corporation Tax

Corporation tax rates and bands are as follows:

Financial Year to	31 March 2013	31 March 2012
Taxable profits
First £300,000	20%	20%
Next £1,200,000	25%	27.5%
Over £1,500,000	24%	26%

The main rate of corporation tax will be reduced to 23% for the financial year commencing 1 April 2013 and to 22% for the financial year commencing 1 April 2014.

Capital allowances

From April 2012 there will be a reduction in the amount of expenditure on plant and machinery that qualifies for a 100% year one write-off (via the Annual Investment Allowance (AIA)), from £100,000 to just £25,000.

In addition, from 1 April 2012 (for businesses within the charge to corporation tax) and from 6 April 2012 (for businesses within the charge to income tax), the rates of writing down allowances will be reduced from 20% to 18% (main rate pool) and from 10% to 8% (special rate pool). For businesses with years straddling 31 March/5 April, there will be a transitional AIA and writing down allowance.

From April 2012 the availability of capital allowances to a purchaser of fixtures will be conditional on businesses following a new statutory mechanism for fixing a value for fixtures within two years of a sale.

As announced in the Autumn Statement, the Enterprise Zones in assisted areas will qualify for enhanced capital allowances. In these areas, 100% First Year Allowances will be available for expenditure incurred by trading companies on qualifying plant or machinery. The qualifying expenditure must be incurred between 1 April 2012 and 31 March 2017.

Research and development (R&D)

The additional corporation tax deduction given to SMEs for qualifying R&D expenditure rises from 100% to 125%, in respect of expenditure incurred on or after 1 April 2012. The £10,000 minimum expenditure requirement for large companies and SMEs will be abolished. The Government will introduce an 'above the line' R&D tax credit from April 2013 with a minimum rate of 9.1% before tax. Loss making companies will be able to claim a payable credit.

Controlled foreign companies (CFCs)

A new CFC regime will have effect for CFC accounting periods beginning on or after 1 January 2013. The business profits of a foreign subsidiary will be outside the scope of the new CFC regime if they meet the specified conditions set out in a 'gateway'. There will be 'safe harbours' for the gateway conditions covering general commercial business, incidental finance income and some sector specific rules. As an alternative to the gateway there will be exemptions including excluded territory exemption and a low profits exemption. There will also be rules for intra group finance income.

Media

Subject to State Aid approval and following consultation, the Government will introduce new corporation tax reliefs from April 2013 for the video games, animation and high-end television industries.

Enterprise Management Incentives (EMI)

Subject to State Aid approval, the limit on the value of shares over which options may be held by an employee under EMI will be increased, as soon as possible, from £120,000 to £250,000. The Government will make reforms to the EMI in Finance Bill 2013 so that gains made on shares acquired through exercising EMI options on or after 6 April 2012 will be eligible for Entrepreneurs’ Relief.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)

Legislation will be included in Finance Bill 2012 to simplify the EIS by relaxing the connected person rules and widening the definition of shares which qualify for relief, and removing the £500 minimum investment limit. The Government will also remove the £1 million limit on investment by a VCT in a single company (except for companies in a partnership or a joint venture).

The employee limit for both EIS and VCT purposes will be increased to fewer than 250 employees, while the gross asset limit will rise to £15 million before the investment and £16 million after, and the maximum annual amount that can be invested in an individual company will increase to £5 million (and not £10 million as had been previously announced). These changes will apply, subject to State Aid approval, to shares in investee companies that are issued on or after 6 April 2012. In addition, the maximum annual amount that an individual can invest under the EIS will rise to £1 million.

From April 2012, a new Seed Enterprise Investment Scheme (SEIS) will:

apply to smaller companies, those with 25 or fewer employees and assets of up to £200,000, which are carrying on or preparing to carry on a new business
give income tax relief worth 50% of the amount invested to individual investors with a stake of less than 30% in such companies, including directors who invest in their companies
apply to an annual amount of investment of £100,000 per investor, with unused annual amounts able to be carried back to the previous year, as under EIS
provide for relief within an overall tax favoured investment limit of £150,000 for the company
provide for an exemption from CGT on gains on shares within the scope of the SEIS and on gains realised from disposals of assets in 2012/13, where the gains are reinvested through the new SEIS in the same year.

Patent Box

The Patent Box will, from 1 April 2013, allow companies to elect to apply a 10% rate of corporation tax to all profits attributable to qualifying patents, whether paid separately as royalties or embedded in the sales price of products. The regime will also apply to other qualifying intellectual property rights such as regulatory data protection, supplementary protection certificates and plant variety rights.

Small businesses

From April 2013 a new cash basis for calculating tax for small unincorporated businesses will be introduced. The Government will consult on the details of the scheme including on extending eligibility to businesses with turnover up to the VAT registration threshold of £77,000.

Anti-avoidance

Legislation will be introduced in the Finance Bill to prevent tax avoidance arising from: corporate investors in Authorised Investment Funds; corporate settlor-interested trusts; debt buybacks; plant and machinery leasing; plant and machinery transactions where there is a tax avoidance purpose; post-cessation trade and property reliefs; property losses; sales of lessor companies; and site restoration payments.

Capital taxes

Capital gains tax (CGT)

The annual exempt amount for individuals for 2012/13 is £10,600.

Gains that fall within an individual’s otherwise unused basic rate income tax band are taxed at 18%; any remaining gains above the basic rate band limit are taxed at 28%. The rate of CGT for trustees or personal representatives is 28%.

Foreign currency bank accounts

From 6 April 2012, currency gains and losses on the withdrawal of funds from foreign-denominated bank accounts for all individuals, personal representatives and trustees will be exempt from CGT.

Inheritance tax (IHT)

The IHT threshold is frozen at £325,000 until 5 April 2015.

The rate of IHT remains 20% for lifetime transfers and 40% for death estates (including transfers within seven years before death brought back into the estate for the purpose of calculating the tax due at death).

A reduced rate of 36% will apply from April 2012 to death estates, where 10% or more of the net estate is left to charity.

Avoidance using offshore trusts

With effect on and after 21 March 2012, if a person enters into arrangements through which they acquire an interest in excluded property such that the value of their estate is reduced, the reduction will be charged to IHT as if that person had transferred assets of that value directly to a relevant property trust. The assets settled in the offshore trust will cease to be treated as excluded property and will instead become subject to the relevant property regime.

These provisions will also apply to existing schemes or arrangements entered into before 21 March 2012 but only in relation to periodic charges and exit charges that arise on or after that date.

Duties

Stamp Duty Land Tax (SDLT): Residential property over £2 million

SDLT on the purchase of a residential property (freehold, lease premium or assignment) will be charged at 7% of chargeable consideration where this is more than £2 million. The measure will have effect for transactions where the effective date (normally the date of completion) is on or after 22 March 2012.

SDLT: Enveloping of high value residential properties

A 15% rate of SDLT will apply to residential properties over £2 million purchased by certain ‘non-natural persons’, and will take effect from 21 March 2012.

In addition the Government will consult on the introduction of an annual charge on residential properties valued over £2 million owned by certain non-natural persons, with the intention of introducing legislation next year and the measure coming into effect in April 2013.

Air Passenger Duty

As set out in the 2011 Autumn Statement, Air Passenger Duty (APD) rates will rise from 1 April 2012.

Tobacco products duty

From 21 March 2012 the duty rates for tobacco products are increased by 5% above RPI. This is equivalent to adding:

37p to a packet of 20 cigarettes
37p to a pouch (25g) of hand-rolling tobacco
12p to a packet of 5 small cigars
20p to a pouch (25g) of pipe tobacco.

Alcohol duty rates

As previously announced, from 26 March 2012 alcohol duty rates will increase by 2% above RPI. This is equivalent to adding:

3p to the price of a pint of beer
2p to the price of a litre of cider
11p to the price of a bottle of wine
41p to the price of a bottle of spirits.

National Minimum Wage (NMW)

The current NMW rates are as follows:

Age	21 and over	18-20	16 and 17	Apprentice rate*
From 1 October 2012	£6.19	£4.98	£3.68	£2.65
From 1 October 2011	£6.08	£4.98	£3.68	£2.60
* Rate applies to apprentices under 19, or those 19 and over in the first year of apprenticeship.

Income Tax and Personal Savings

Income tax rates

	2012/13	2011/12
Basic rate band – income up to	£34,370	£35,000
Starting rate for savings	*10%	*10%
Basic rate	20%	20%
Dividend ordinary rate	10%	10%
Higher rate - income over	£34,370	£35,000
Higher rate	40%	40%
Dividend upper rate	32.5%	32.5%
Additional rate – income over	£150,000	£150,000
Additional rate	50%	50%
Dividend additional rate	42.5%	42.5%
*Starting rate is for savings income up to the starting rate limit of £2,710 (£2,560) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.

Personal allowances (ages are as at the end of the tax year)

Personal allowances		2012/13	2011/12
Personal allowances (PA)	under 65	£8,105	£7,475
	65 to 74	£10,500	£9,940
	75 and over	£10,660	£10,090

The personal allowance for those aged under 65 increases from 6 April 2012 to £8,105. The advantage to higher rate payers is countered by a lowering of the higher rate threshold, to £34,370 from 6 April 2012.

Married couple's allowance (MCA)		2012/13	2011/12
Either partner born before 6 April 1935 (relief restricted to 10%)		£7,705	£7,295

Age-related allowances are reduced by £1 for every £2 that adjusted net income exceeds £25,400 (£24,000), to a minimum PA of £8,105 (£7,475).

The MCA is reduced by £1 for every £2 by which the income of the spouse or civil partner with the most income exceeds £25,400 (£24,000), subject to a minimum of £2,960 (£2,800).

Where adjusted net income exceeds £100,000, the PA, including the minimum age-related allowances, is reduced by £1 for every £2 that net adjusted income exceeds £100,000 until it is nil.

Individual Savings Accounts (ISAs)

The annual ISA subscription limit for 2012/13 will rise from £10,680 to £11,280, up to £5,640 of which can be invested in a cash-only ISA.

The subscription limit for Junior ISAs, which are available to those aged under 18 who do not have a Child Trust Fund account, will remain unchanged at £3,600.

Furnished Holiday Lettings (FHLs)

The rules on FHLs have been subject to a number of changes in recent years, and further changes apply from the 2012/13 tax year.

From April 2012, the following tests must be satisfied in order for a letting to qualify as an FHL:

the property must be available for commercial letting as holiday accommodation for a minimum of 210 days during the relevant period
the property must actually be let to the public for a minimum of 105 days during the relevant period
the accommodation must not be let for periods of longer term occupation (over 31 days) for more than 155 days in the tax year.

Child Benefit

A new income tax charge will apply to taxpayers who receive Child Benefit themselves or whose partner receives Child Benefit. The charge will only apply to those whose income is more than £50,000 for the tax year. If both partners have income of more than £50,000 for the tax year, the charge will apply only to the partner with the highest income.

For this purpose, a partnership comprises: a married couple living together; civil partners living together; a man and a woman who are not married to each other but who are living together; or a man living with a man or a woman living with a woman who are living together as if they were civil partners.

For people with income between £50,000 and £60,000, the amount of the charge will be a proportion of the Child Benefit received. For those with income above £60,000, the amount of the charge will equal the amount of Child Benefit received. For example, Child Benefit for two children is £1,752. For someone whose income is £54,000, the charge will be £700.80 – i.e. £17.52 for every £100 earned above £50,000. For one whose income is £62,000, the charge will be £1,752.

The amount of Child Benefit payable will be unaffected by the new tax charge. However, Child Benefit claimants will be able to elect not to receive the benefit if they or their partner do not wish to pay the new charge. That election may subsequently be withdrawn if the circumstances change.

This measure is to come into effect from 7 January 2013. HMRC will contact people earning over £50,000 about the new charge from Autumn 2012.

Personal allowances and tax rates for 2013/14

The basic and higher rates of income tax will remain at 20% and 40%, respectively, while the additional rate will be reduced to 45%. The dividend additional rate will be set at 37.5%, the trust rate will be set at 45% and the dividend trust rate will be set at 37.5%.

For 2013/14 the personal allowance for those born after 5 April 1948 will be set at £9,205 and the basic rate limit at £32,245.

From 2013/14, the age-related personal allowances will not be increased and their availability will be restricted to people born on or before 5 April 1948:

born 6 April 1938 – 5 April 1948	£10,500
born before 6 April 1938	£10,660

Cap on unlimited tax reliefs

Legislation will apply a cap on income tax reliefs claimed by individuals from 6 April 2013 where they are currently unlimited. For anyone seeking to claim more than £50,000 in reliefs, a cap will be set at 25% of income (or £50,000, whichever is greater).

Domicile and residence

From 6 April 2012 the £30,000 annual Remittance Basis Charge (RBC) will be increased to £50,000 for resident, non-domiciled individuals (non-doms) who have been UK resident for at least 12 out of the last 14 years. The £30,000 RBC will continue to apply for those who have been resident for at least 7 out of the last 9 years. However, the remittance basis tax charge will not apply where non-doms remit foreign income or gains to the UK for the purpose of commercial investment in UK businesses, nor (subject to conditions) when certain property is brought to, and sold in, the UK and the proceeds are then taken offshore.

Complex (and generally not beneficial) identification rules apply if a non-dom remits nominated income or gains before remitting all other offshore income and gains of the year. A slight relaxation applies from 6 April 2012, allowing up to £10 of a year’s nominated income and gains to be remitted without triggering the identification rules.

Following a Government consultation, the introduction of the statutory residence test has been delayed until April 2013. Any reforms to ordinary residence will be introduced at the same time.

Also proposed for 2013 is legislation to increase the inheritance tax-exempt amount that a UK domiciled individual can transfer to their non-UK domiciled spouse or civil partner. The Government similarly proposes to allow individuals who are domiciled outside the UK and who have a UK domiciled spouse or civil partner to elect to be treated as domiciled in the UK for the purposes of inheritance tax.

Value Added Tax

From	4 Jan 2011
Standard rate	20%
VAT fraction	1/6
Reduced Rate	5%
Current Turnover Limits
Registration - last 12 months or next 30 days over	£77,000 from 1 April 2012
Deregistration - next 12 months under	£75,000 from 1 April 2012
Annual accounting scheme	£1,350,000
Cash accounting scheme	£1,350,000
Flat-rate scheme	£150,000

Hot food and premises

The definition of 'hot food' will be clarified to confirm that the sale of all hot food, with the exception of freshly baked bread, is standard-rated. The meaning of 'premises' will be clarified by confirming that the sale of all food sold for consumption in areas adjacent to a retailer (such as a table and chairs outside a café) or in areas that are shared with other retailers (such as food courts in shopping centres) is standard-rated. The measure will have effect on supplies made on or after 1 October 2012.

Approved alterations to listed buildings

Currently the repair and maintenance of a protected building is standard-rated, but the approved alteration of a protected building is zero-rated.

New rules will result in:

all building materials and construction services supplied in the course of an approved alteration to a protected building becoming subject to VAT at the standard rate
a narrowing of the circumstances in which the first sale or long lease by a developer of a substantially reconstructed protected building can be zero-rated, so that only buildings reconstructed from a shell continue to benefit from the zero rate.

The measure will have effect on supplies made on or after 1 October 2012. Transitional arrangements will be put in place to protect contracts entered into before 21 March 2012. Anti-forestalling legislation will apply to supplies made on or after 21 March 2012.

VAT standard rate clarifications

It has been clarified that from 1 October 2012 the standard rate of VAT will apply to: self-storage, hairdressers’ chair rental, sports nutrition drinks and holiday caravans.

Tax and Travel

Car and fuel benefits

The taxable petrol and diesel car benefit is based on the car's CO₂ emissions. It is calculated using the car's UK list price and applying the 'appropriate percentage' as shown in the table below.

The car fuel benefit is calculated by applying the same percentages to the fuel multiplier, which for 2012/13 is £20,200.

For cars which cannot produce CO₂ engine emissions under any circumstances when driven (‘zero emission cars’, including those powered solely by electricity), the appropriate percentage is reduced to 0%, thereby reducing the car benefit charge to nil.

For cars emitting between 1g/km and 75g/km the appropriate percentage is reduced to 5% (8% for diesel) for five years from 6 April 2010.

Changes from 2013/14

The lower threshold will be reduced from 120g/km to 115g/km. The lowest appropriate percentages will remain at 0% and 5%. The 10% rate will apply to cars with CO₂ emissions of 76g/km to 94g/km. The appropriate percentage will increase by 1% for all vehicles with CO₂ emissions between 95g/km and 215g/km, to a maximum of 35%.

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2012.

CO₂ emissions	Appropriate percentage		Quarterly VAT
(g/km)	Petrol %	Diesel %	Fuel scale charge £	VAT on charge
(g/km)	Petrol %	Diesel %	Fuel scale charge £	£
Zero	0	0	166	27.67
Up to 75	5	8	166	27.67
76-99	10	13	166	27.67
100-104	11	14	166	27.67
105-109	12	15	166	27.67
110-114	13	16	166	27.67
115-119	14	17	166	27.67
120-124	15	18	166	27.67
125-129	16	19	250	41.67
130-134	17	20	266	44.33
135-139	18	21	283	47.17
140-144	19	22	300	50.00
145-149	20	23	316	52.67
150-154	21	24	333	55.50
155-159	22	25	350	58.33
160-164	23	26	366	61.00
165-169	24	27	383	63.83
170-174	25	28	400	66.67
175-179	26	29	416	69.33
180-184	27	30	433	72.17
185-189	28	31	450	75.00
190-194	29	32	467	77.83
195-199	30	33	483	80.50
200-204	31	34	500	83.33
205-209	32	35	517	86.17
210-214	33	35	533	88.83
215-219	34	35	550	91.67
220-224	35	35	567	94.50
225 and above	35	35	583	97.17

Plug-in grants

Motorists (private or business) purchasing a new qualifying ultra-low emission car can receive a grant of 25% towards the cost of the vehicle, up to a maximum of £5,000. The scheme has recently been extended to cover new qualifying ultra-low emission vans, where the available grant will be 20% towards the cost of the vehicle, up to a maximum of £8,000.

Vehicles with CO₂ emissions of 75g/km or less, including electric, plug-in hybrid and hydrogen-fuelled cars, are all potentially eligible for the subsidy. There are strict criteria to be met before specific vehicles can be confirmed as eligible under the rules of the scheme.

Mileage rates

Changes to the HMRC business mileage rates are announced from time to time. The rates at 6 April 2012 are as follows:

Vehicle	First 10,000 miles	Thereafter
Car / Van	45p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

Car - fuel only advisory rates
Engine Capacity	Petrol	LPG
1400cc or less	15p	10p
1401 - 2000cc	18p	12p
Over 2000cc	26p	18p
Engine Capacity	Diesel
1600cc or less	13p
1601 - 2000cc	15p
Over 2000cc	19p

The fuel only advisory rates relate to company cars only. They can be applied as a tax-free maximum rate for employees claiming for petrol used on business journeys and for employees reimbursing their employers with the cost of petrol used for private journeys.

HMRC will consider claims for a higher maximum rate, if it can be demonstrated that it is necessary for an employee to use a car with higher than average fuel costs.

Car costs – Vehicle Excise Duty (VED) rates

VED ('Car Tax') rates also reflect emissions, with lower scale rates for cars using alternative fuels. The following table shows the rates which apply from 1 April 2012 for cars registered on or after 1 March 2001:

VED Band	CO₂ emissions (g/km)	First year rate	Standard rate
VED Band	CO₂ emissions (g/km)	First year rate	Petrol & Diesel	Alternative fuels
A	Up to 100	£0	£0	£0
B	101 – 110	£0	£20	£10
C	111 – 120	£0	£30	£20
D	121 – 130	£0	£100	£90
E	131 – 140	£120	£120	£110
F	141 – 150	£135	£135	£125
G	151 – 165	£170	£170	£160
H	166 – 175	£275	£195	£185
I	176 – 185	£325	£215	£205
J	186 – 200	£460	£250	£240
K*	201 – 225	£600	£270	£260
L	226 – 255	£815	£460	£450
M	Over 255	£1,030	£475	£465
* includes cars emitting over 225g/km registered before 23 March 2006

Company vans

The taxable benefit for the unrestricted private use of vans is £3,000. There is a further £550 taxable benefit if the employer provides fuel for private travel.

Van and fuel charge	Van	Fuel	Total
Tax (20% taxpayer)	£600	£110	£710
Tax (40% taxpayer)	£1,200	£220	£1,420
Tax (50% taxpayer)	£1,500	£275	£1,775
Employer’s Class 1A NICs	£414	£75.90	£489.90

The flat rate of £3,000 is reduced to nil for vans emitting zero CO₂. There is no fuel benefit for such vans.

National Insurance Contributions (NICs)

		2012/13
Class 1 (not contracted out)		Employer	Employee
Payable on weekly earnings of:
Below £107 (lower earnings limit)		Nil	Nil
£107 - £144 (employers’ earnings threshold)		Nil	Nil
£144.01 - £146 (employees’ earnings threshold)		13.8%	Nil
£146.01 - £770 (upper accrual point)		13.8%	12%
£770.01 - £817 (upper earnings limit)		13.8%	12%
Over £817		13.8%	2%
Over state retirement age, the employee contribution is generally nil
Class 1A	on relevant benefits	13.8%	Nil
Class 2	Self employed	£2.65 per week
	Limit of net earnings for exception	£5,595 per annum
Class 3	Voluntary	£13.25 per week
Class 4*	Self employed on profits
	£7,605 - £42,475	9%
	Excess over £42,475	2%
*Exemption applies if state retirement age was reached by 6 April 2012

Other measures announced

Income tax avoidance: Life insurance policies

The chargeable event gain regime provides special rules for applying income tax to investment gains from life insurance policies. These rules apply to each individual policy or contract and provide that the amount of a gain that may be liable to income tax is the difference between the value of benefits paid from a policy and the total of premiums paid into the policy plus certain gains arising earlier in the life of a policy.

There is currently no requirement under these rules that the earlier gains must have been included in the total income of a person liable to any tax under the chargeable event gain regime. For relevant policies and contracts made on or after 21 March 2012 (and existing policies and contracts which are assigned in part or whole, or are used as security for a debt, or into which policyholders choose to pay further premiums, on or after 21 March 2012), changes announced will ensure that when calculating the amount of a chargeable event gain under a policy or contract, a deduction for earlier gains will only be allowed to the extent that those earlier gains are attributable to a person chargeable to tax on gains under the chargeable event gain regime.

Further provisions will be included to ensure that interdependent policies (under which the value of benefits paid from one policy is dependent on premiums paid into another policy) will be treated as a single policy with the current rules applying to that single policy as usual.

Personal Tax Statement

From the 2014/15 tax year the Government will introduce a new Personal Tax Statement for around 20 million taxpayers, including Self Assessment taxpayers and those in Pay As You Earn (PAYE) who receive a coding notice.

The statement will detail the income tax and National Insurance Contributions (NICs) they have paid and their average tax rates. It will also outline how this contributes to public spending, outlining the proportions used for education, health and welfare.

The aim is to improve the transparency of the tax system.

According to sample Treasury calculations, someone earning just over £25,000 would pay £5,700 in direct taxes. Of that, more than £1,900 would go on welfare and pension payments, nearly £1,000 on health and £750 on education. £360 would also be spent on national debt repayments.

General Anti-Abuse Rule (GAAR)

A consultation document will be issued in Summer 2012 with a view to bringing forward legislation in Finance Bill 2013.

The Government insists it is 'committed to ensuring that this legislation effectively tackles artificial and abusive tax avoidance schemes and that the supporting guidance is practical both for taxpayers and for HMRC'.

Gift Aid small donations scheme

As announced at Budget 2011, the Government will introduce a new Gift Aid small donations scheme from April 2013 to enable charities to claim a Gift Aid style top-up payment on up to £5,000 of small donations, without the need to collect Gift Aid declarations.

Charities will be able to claim the new payment on donations of £20 or less.

Real Time Information (RTI) and PAYE penalties

Currently, employers and pension providers send information about tax, NICs and other payroll deductions to HMRC after the end of each tax year. The result is that HMRC cannot correct mistakes until the employer sends this information. However, under RTI, employers and pension providers will tell HMRC about tax, NICs and other deductions when or before the payments are made.

The Government will consult before the Summer on a new model for PAYE late payment and late filing penalties.

Bank Levy rate

As announced at Autumn Statement 2011, the full rate of the Bank Levy is set at 0.088% from 1 January 2012. In the Budget it was announced that from 1 January 2013 the full rate of the Bank Levy will be increased to 0.105%.

National Loan Guarantee Scheme

Just prior to the Budget the Chancellor launched a new National Loan Guarantee Scheme (NLGS), designed to give smaller businesses greater access to cheaper finance by guaranteeing banks’ own borrowing.

Up to £20 billion of Government guarantees will be provided on unsecured borrowing by participating banks, enabling them to borrow at a cheaper rate. They will then pass on the entire benefit to businesses which, when taking out an NLGS loan, will receive a discount of one percentage point compared to the interest rate that they would otherwise have received from that bank outside the scheme.

The loans are available to all UK businesses with a company group annual turnover of less than £50 million. Banks currently participating in the scheme are Barclays, Santander, Lloyds and RBS, with Aldermore having also agreed to join in principle. Around £5 billion in guarantees will be made available in the first tranche.

2012/13 Tax Calendar

April 2012
5	Last day of 2011/12 tax year. Deadline for 2011/12 ISA investments. Last day to make disposals using the 2011/12 CGT exemption. Last date for contracting back into the State Second Pension for 2011/12.
14	Due date for income tax for the CT61 period to 31 March 2012.
19/20	Quarter 4 2011/12 PAYE remittance due.
20	Interest will begin to accrue on unpaid PAYE/NI for 2011/12.
30	Normal annual adjustment for VAT partial exemption calculations (monthly returns).
May 2012
1	Start of daily penalties for 2011 online Tax Return not yet filed. Additional penalties may apply for further delay.
3	Submission date of P46 (Car) for quarter to 5 April.
19	Last day for filing forms P14, P35, P38, and P38A - 2011/12 PAYE returns - without incurring penalties.
31	Last day to issue 2011/12 P60s to employees.
June 2012
30	End of CT61 quarterly period. Annual adjustment for VAT partial exemption calculations (March VAT year end).
July 2012
6	Deadline for submission of Form 42 (transactions in shares and securities). Deadline for submission of EMI40 (EMI Annual Return). File Taxed Award Scheme Returns, file P11Ds, P11D(b)s and P9Ds. Issue copies of P11Ds or P9Ds to employees.
14	Due date for income tax for the CT61 period to 30 June 2012.
19/20	Quarter 1 2012/13 PAYE remittance due. Final date for payment of 2011/12 Class 1A NICs. Second payment due date for 2011/12 Class 2 NICs.
31	Second self assessment payment on account for 2011/12. Annual adjustment for VAT partial exemption calculations (April VAT year end). Liability to 5% penalty on any tax unpaid for 2010/11. Deadline for tax credit Annual Declaration (if estimated, final figures required by 31/01/13).
August 2012
2	Submission date of P46 (Car) for quarter to 5 July.
31	Annual adjustment for VAT partial exemption calculations (May VAT year end).
September 2012
30	End of CT61 quarterly period. Last day for UK businesses to reclaim EC VAT chargeable in 2011.
October 2012
1	Due date for payment of Corporation Tax for period ended 31 December 2011.
5	Individuals/trustees must notify HMRC of new sources of income/chargeability in 2011/12 if a Tax Return has not been received.
14	Due date for income tax for the CT61 quarter to 30 September 2012.
19/22	Quarter 2 2012/13 PAYE remittance due.
31	Deadline for paper submission of 2012 Tax Return without incurring penalties.
November 2012
1	Please ensure you are retaining your documents for the 2013 Tax Return. £100 penalty if 2012 paper Tax Return not yet filed.Additional penalties may apply for further delay.
2	Submission date of P46 (Car) for quarter to 5 October.
December 2012
30	Last day for online submission of 2012 Tax Return for HMRC to collect tax through clients’ PAYE code, where they owe less than £3,000.
31	Last day for non-EU traders to reclaim recoverable UK VAT suffered in the year to 30 June 2012. End of relevant year for taxable distance supplies to UK for VAT registration purposes. End of relevant year for cross-border acquisitions of taxable goods in the UK for VAT registration purposes. End of CT61 quarterly period. Filing date for Company Tax Return Form CT600 for period ended 31 December 2011.
January 2013
1	Due date for payment of Corporation Tax for period ended 31 March 2012.
14	Due date for income tax for the CT61 quarter to 31 December 2012.
18/22	Quarter 3 2012/13 PAYE remittance due.
31	First self assessment payment on account for 2012/13. Capital gains tax payment for 2011/12. Balancing payment - 2011/12 income tax/Class 4 NICs. Last day to renew 2012/13 tax credits. First payment due date for 2012/13 Class 2 NICs. Deadline for amending 2010/11 Tax Return. Last day to file the 2012 Tax Return online without incurring penalties.
February 2013
1	£100 penalty if 2012 Tax Return not yet filed. Additional penalties may apply for further delay. Interest starts to accrue on 2011/12 tax not yet paid.
2	Submission date of P46 (Car) for quarter to 5 January.
14	Last date (for practical purposes) to request NIC deferment for 2012/13.
March 2013
2	Last day to pay any balance of 2011/12 tax and Class 4 NICs to avoid an automatic 5% late payment penalty.
31	End of Corporation Tax financial year. End of CT61 quarterly period. Filing date for Corporation Tax Return Form CT600 for period ended 31 March 2012.

Autumn Statement 2011

twettone@wmcca.co.uk (Tim Wettone) — Sat, 10 Dec 2011 12:12:00 -0800

Chancellor George Osborne presented the Autumn Statement to the House of Commons on 29 November 2011. This newsletter summarises the key points, and rounds up some of the recent changes announced by the Coalition Government.

Overview: Chancellor sticks to Plan A for the economy
Business and investment
Housing measures
Travel and infrastructure
Pensions Update
Jobs and education
Tax Credits and the state pension
Looking ahead to 2012
What they said

This publication was prepared immediately following the Chancellor’s Autumn Statement based on official press releases and supporting documentation. The publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for any loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

Overview: Chancellor sticks to Plan A for the economy

With the latest report from the Office for Budget Responsibility painting a gloomy picture for the UK economy, Chancellor George Osborne vowed that the Government would stick to its austerity programme to protect against ‘the sovereign debt storm’.

In line with predictions, the Chancellor announced a reduction in the UK’s economic growth forecasts, with the 2011 figure revised downwards from 1.7% to 0.9%. This was accompanied by an increase in Government borrowing, with the forecast for 2011/12 rising to £127bn, and total additional borrowing amounting to £112bn over the next four years. However, the Chancellor rebuffed recent reports that the UK is set to slip back into recession in the coming months.

Key announcements for business include the introduction of further credit easing, with up to £20bn being made available to small and medium-sized businesses through the National Loan Guarantee Scheme. The business rate relief ‘holiday’ for small firms will be extended to April 2013, and a new Seed Enterprise Investment Scheme for small businesses will offer 50% income tax relief for those investing up to £100,000 in new start-ups, together with a one year freeze on capital gains tax. A £940m ‘Youth Contract’ will also aim to boost employment by means of subsidised work placements for young workers.

Also central to the announcements was confirmation of a National Infrastructure Plan to boost the UK’s road, rail and broadband facilities, to be funded by £5bn of Government spending, with a further £20bn investment expected from British pension funds.

Meanwhile, public sector workers will experience a further squeeze, with a 1% cap on pay rises, and while some benefits will rise in line with inflation, other tax credits will see below-inflation increases.

Other significant announcements include a mortgage indemnity scheme aimed at helping 100,000 people to buy homes, a doubling of the number of childcare places for two year olds in England, a new cap on regulated rail fare increases, a cancellation of the rise in fuel duty scheduled for January, and a further increase in the bank levy.

Business and investment

The Autumn Statement contained announcements affecting many aspects of business life.

Tax changes

At the last Budget the Government cut the main rate of corporation tax to 26%, and it will fall by a further 1% each year until 2014, when it will reach 23%.

Changes to the tax rules with immediate effect will ensure the amount of tax relief given to employers making asset-backed pension contributions to registered pension schemes accurately reflects the amount of payments made, and does not give rise to unintended excess relief.

The climate change levy discount on electricity for climate change agreement participants available from 1 April 2013 will be increased to 90%.

As announced, the Government will remove the VAT relief for low value goods (below £15) sent to the UK from the Channel Islands with effect from 1 April 2012.

Enterprise Zones

Enterprise Zones in six assisted areas ñ Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley ñ will qualify for enhanced capital allowances. In these areas, 100% allowances will be available for plant and machinery investment incurred between April 2012 and March 2017. Discussions continue with the devolved administrations regarding enhanced capital allowances in their Enterprise Zones.

Venture Capital Schemes

The Chancellor announced a new Seed Enterprise Investment Scheme (SEIS) to encourage investment in new start-up companies. SEIS will provide income tax relief of 50% for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of £100,000 and a cumulative investment limit for companies of £150,000.

In addition, the scheme will offer a capital gains tax ‘holiday’ for investments made. This will provide for a capital gains tax exemption on gains realised on disposal of an asset in 2012/13 and invested through SEIS in the same year.

The Enterprise Investment Scheme (EIS) will be simplified by relaxing the connected person rules and the definition of shares that qualify for relief. At the same time the focus of the scheme will be tightened by the introduction of a new test to exclude companies set up for the purpose of accessing relief, exclude acquisition of shares in another company and exclude investment in Feed-in-Tariffs businesses.

In addition to these changes, the Government will remove the £1m investment limit per company for Venture Capital Trusts (VCTs) to reduce the administrative burdens of the scheme.

The Government had already announced that from 6 April 2012 the employee limit for both EIS and VCT purposes will be increased to fewer than 250 employees (currently 50), while the gross asset limit will rise to £15m before the investment.

In addition, the maximum annual amount that can be invested in a company will increase to £10m and the maximum annual amount that an individual can invest under the EIS will rise to £1m.

Business rates

The Government will extend the small business rate relief ‘holiday’ for a further six months from 1 October 2012 and give businesses the opportunity to defer 60% of the increase in their 2012/13 business rate bills as a result of the Retail Prices Index uprating, to be repaid equally across the following two years.

Employment regulation

The qualifying period for unfair dismissal claims is to be increased from one year to two years from April 2012 to help address employers’ fears about the risks of taking on a new member of staff. The Government will consult on the level of fees, to be introduced for individuals who want to bring cases to employment tribunals.

Planning law

The Government will:

review planning appeals procedures, seeking to make the process faster and more transparent, improve consistency and increase certainty of decision timescales. Proposals will be brought forward for implementation in summer 2012
consult on a proposal to allow the reconsideration of those planning obligations agreed prior to April 2010 where development is stalled; and
consult on proposals to allow existing agricultural buildings to be used for other business purposes such as offices, leisure and retail space, to make it easier for rural businesses to find the premises they need to expand.

Credit easing

The Government announced a package of up to £21bn of credit easing measures to support smaller and medium-sized businesses, comprising:

a National Loan Guarantee Scheme. Up to £20bn of guarantees for bank funding will be made available over two years. This will allow banks to offer lower cost lending to smaller businesses, subject to state aid approval; and
making available an initial £1bn through a Business Finance Partnership, which will invest in smaller and medium-sized businesses in the UK through non-bank channels.

Innovation

The Government has announced that it will:

invest an additional £75m in supporting technology-based SMEs to develop, demonstrate and commercialise new products and services
invest an additional £200m in science, including an £80m investment in the Institute for Animal Health and £25m for large-scale technology demonstrators; and
introduce an ‘above the line’ tax credit in 2013 to encourage research and development (R&D) activity by larger companies.

The Government will consult on the detail at Budget 2012 and aims to ensure that SME R&D incentives are not reduced as a result of this change. This builds on measures at Budget 2011 to increase the R&D tax credits for SMEs.

In December 2011 the Prime Minister will set out the Government’s strategy to support the life sciences work of universities, the NHS, private investors and businesses, to attract and develop talent, and improve incentives.

Following consultation over summer 2011, the Government will publish on 6 December 2011 further details of the Patent Box and its reform of the Controlled Foreign Company rules and R&D tax credits.

Housing measures

Analysis has shown that the stamp duty land tax relief for first time buyers has been ineffective in increasing the number of first time buyers entering the market. This relief will therefore end on 24 March 2012 as planned.

The ‘New build indemnity scheme’ provides a guarantee for up to 100,000 new mortgages at up to 95% loan to value for new build houses and flats in England. For each new build property sold under the scheme, the home builder will contribute 3.5% into an indemnity fund, with the Governments supporting the fund to a total of 9% of the property value. The indemnity fund pays out to the lender if a property financed under the scheme is repossessed and there is a shortfall. Builders will take the first loss in the indemnity, with the Government only being called upon to pay once the builder’s fund has been exhausted.

The Government will raise the discounts for the ‘Right to Buy scheme’. For each home purchased, the Government will provide an additional affordable home, in addition to plans to deliver up to 170,000 affordable homes through the new ‘Affordable Homes programme’.

A new £400m ‘Get Britain Building’ investment fund will support firms in need of development finance. This will be aimed at making progress on stalled sites which have planning permission and are otherwise ready to start.

Travel and infrastructure

Fuel duty

The planned 3.02p per litre fuel duty increase that was due to take effect on 1 January 2012 will be deferred to 1 August 2012, and the inflation increase that was planned for 1 August 2012 (expected to be 1.92p per litre) will be cancelled.

Roads and rail

A new National Infrastructure Plan is intended to improve Britain’s road and rail systems, with over 30 specific projects on motorways and rail lines detailed. £5bn of funding will come from government spending, with an anticipated £20bn investment coming from UK pension funds. An additional £1bn of new private sector investment in regulated industries will be supported by government guarantee.

Train fares have been expected to increase to RPI plus 3% to pay for the investment in railways and new trains. However, the Government will now limit the increase to Transport for London and regulated rail fares to RPI plus 1% for one year from January 2012.

Air Passenger Duty

The extension of Air Passenger Duty (APD) to flights taken aboard business jets, effective from 1 April 2013, will go ahead. Details will be set out following the APD consultation on 6 December 2011.

Superfast broadband

£100m will be invested to create up to 10 ‘super-connected cities’ across the UK, with 80-100 megabits per second superfast broadband and city-wide high-speed mobile connectivity. The four national capitals will all receive support from this fund, and a UK-wide competition will decide on up to six further cities that will also receive funding. These will be announced in the 2012 Budget.

A £20m Rural Community Broadband Fund will be opened to roll out superfast broadband to rural areas, and this may be extended if successful.

Pensions Update

Automatic pension enrolment delayed for small businesses

The Government has announced that small businesses will be given more than an extra year to comply with the requirements of the new automatic pension enrolment system.

Auto-enrolment is being phased in from October 2012, on a staged basis, beginning with larger employers. Following the announcement, the original April 2014 starting deadline for employers with less than 50 workers has been deferred until the start of the next Parliament.

Under the system, employers will have to enrol automatically all eligible workers into any qualifying pension scheme. This could be an existing company scheme (if it meets, or can be changed to meet, the necessary criteria) or NESTs (National Employment Savings Trusts), a simple low-cost pension scheme being introduced by the government.

All businesses will eventually need to contribute at least 3% on a band of qualifying pensionable earnings for eligible jobholders. However, to help employers adjust, compulsory contributions will be phased in.

Employees will also contribute to their pension scheme ñ this will start at 1% of their salary, before later rising to 4%. An additional 1% in the form of tax relief will mean that there is a minimum 8% contribution rate.

Changes to the state pension age

The Chancellor has revealed that the rise in the state pension age to 67 will now come into effect between April 2026 and April 2028, saving an estimated £60bn between 2026/27 and 2035/36.

Meanwhile, the Government recently announced its intention to delay its plans to increase the state pension age to 66, following concerns that many thousands of women will have to wait longer to collect their pensions.

Under the plans, the pension age for women was set to rise from 60 to 65 by 2018, followed by a second increase in the pension age to 66, in April 2020. However, the second rise in the pension age will now take place in October 2020, benefiting around 245,000 women.

Jobs and education

The Government plans to invest an extra £600m to fund 100 additional Free Schools by the end of this Parliament. This will include new specialist maths Free Schools for 16-18 year olds, supported by strong university maths departments and academics.

It will also invest an additional £600m to support those local authorities with the greatest demographic pressures. This funding is expected to deliver up to an additional 40,000 school places.

Youth Contract

The Government is introducing a new ‘Youth Contract’, worth a total of £940m over the Spending Review 2010 period.

The Government will fund wage incentives for 160,000 young people to make it easier for private sector employers to take them on. In addition it will fund at least 40,000 incentive payments for small firms to take on young apprentices, and extra support from Jobcentre Plus for unemployed 18-24 year olds.

An offer of a work experience or Sector Based Work Academy place will be made to every unemployed 18-24 year old who wants one after three months on Jobseeker’s Allowance, together with a new £50m a year programme to support some of the most disadvantaged 16-17 year olds into education, an apprenticeship or a job with training.

2012/13: Tax Credits and the state pension

For 2012/13, the child element of the Child Tax Credit will be uprated by £135 per year in line with CPI, but the planned £110 above inflation increase will not go ahead.

The disability elements of tax credits will be uprated in line with CPI, but the couple and lone parent elements of the Working Tax Credit will not be uprated.

In line with the ‘triple guarantee’, the full basic State Pension will rise by £5.30 to £107.45 per week. The full couple rate will rise by £8.50 to £171.85 per week. The standard minimum income guarantee in Pension Credit will increase by 3.9% to £142.70 per week for single pensioners and £217.90 a week for pensioner couples. The threshold for Savings Credit will increase to £111.10 for single pensioners and £177.20 for pensioner couples.

Looking ahead to 2012

Income tax and personal allowances

The personal allowance for those aged under 65 increases to £8,105 from 6 April 2012. However, the advantage to higher rate taxpayers will be countered by a lowering of the higher rate threshold, to £34,370.

Capital allowances

The current system of capital allowances will see significant changes from April 2012, including a reduction in the amount of expenditure on plant and machinery which qualifies for a 100% year one write-off (via the annual investment allowance) from £100,000 to just £25,000.

In addition, for chargeable periods ending on or after 1 April 2012 (for businesses within the charge to corporation tax) and on or after 6 April 2012 (for businesses within the charge to income tax), the rates of writing down allowances will be reduced to 18% (main rate pool) and 8% (special rate pool).

Pensions tax relief lifetime limit

The lifetime allowance on money that can be accrued in a pension fund and still receive tax relief, is set to fall from £1.8m to £1.5m from April 2012.

Research & Development

The additional corporation tax deduction given to small and medium-sized enterprises for qualifying R&D expenditure will rise from 100% to 125%. It will have effect for expenditure incurred on or after 1 April 2012.

Inheritance tax

A reduced inheritance tax rate of 36% will apply from 6 April 2012 to death estates, where 10% or more of the net estate is left to charity.

If you are affected by the changes, please contact us for more information and advice.

What they said...

‘After 18 months in office the verdict is in: Plan A has failed and it has failed colossally... cutting too far and too fast has backfired and every one of the Chancellor’s claims of a year ago has completely unravelled’

Ed Balls, Shadow Chancellor

‘This Autumn Statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs. This is ‘Plan A Plus’ in all but name’

John Cridland, Confederation of British Industry

‘The biggest challenges to UK businesses remain global demand and economic uncertainty. Firms will give the Chancellor credit for pulling the levers under his control, but will remain concerned about the wider economic environment’

David Kern, British Chambers of Commerce

‘Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businessesÖ the key now is for the Government to be consistent, and set to the task of translating the policy intentions into tangible actions on the ground’

John Walker, Federation of Small Businesses

The penalties just keep going up!

twettone@wmcca.co.uk (Tim Wettone) — Wed, 06 Apr 2011 04:04:00 -0700

H M Revenue & Customs has issued a reminder that the new penalty regime for late filing and late payment of Income Tax Self Assessment Tax Returns starts shortly.

The new penalty regime for 2010/11 returns will be:

Late filing penalties:

When any return is late, an initial £100 fixed penalty arises the day after the filing date. Unlike before, this now applies even if there is no tax to pay or the tax due has been paid on time.
Individuals are notified they will be liable for a further delay penalty if the return is not submitted within 3 months of the filing date. The penalty is calculated at £10 per day, until the return is filed, for a maximum of 90 days (up to £900).
After the daily penalties, and if the return is still outstanding 6 months after the filing date, a further penalty arises, calculated at 5% of the tax liability on the return or £300 if this is higher.
Where the return is still outstanding after 12 months, a further penalty arises, calcuated at 5% of the tax liability on the return or £300 if this is higher.
If a determination has been made because the return has not been received, the penalties at 6 and 12 months will be based upon the estimated amount in the determination, and then adjusted retrospectively when the self-assessed amount is returned.

It doesn't stop there!

Late payment penalties:

At 30 days, there will be charged an intial penalty of 5% of the tax unpaid at that date.
At 6 months late, there will be charged a further penalty of 5% of the tax that is still unpaid.
At 12 months late, there will be charged a further penalty of 5% of the tax that is still unpaid.
These penalties are additional to the interest that will also be charged on all outstanding amounts, including unpaid penalties, until payment is received.

As an example, under this new system, taxpayers who have not filed their return within 6 months of the filing date will face a minimum penalty of £1,300, even if they do not owe any tax!

Take note, and spread the word!

Budget 2011 report

twettone@wmcca.co.uk (Tim Wettone) — Thu, 24 Mar 2011 02:03:00 -0700

We can help you to reassess your plans regularly, and adapt them as your personal and business circumstances change. With our help, you can plan for a rewarding and financially secure future.

Please note: while most taxation changes take effect from the start of the financial year, or tax year, some may not take effect until 2012, or later. Where relevant, details of these changes have been included in this Report. Throughout the Report, ‘HMRC’ refers to HM Revenue & Customs.

Budget Highlights
Business Tax & Investment Incentives
Capital Taxes
Duties
National Minimum Wage
Income Tax & Personal Savings
Value Added Tax
Tax and Travel
National Insurance
Other Measures Announced
2011/12 Tax Calendar

Budget Highlights

Osborne presents 'a Budget for growth'

Chancellor George Osborne heralded his second Budget as one ‘for enduring growth and jobs’. Despite revealing significant cuts in the economic growth forecasts for 2011 and 2012, the Chancellor insisted that the Government’s fiscal plans were on course.

The Chancellor’s speech included a range of measures intended to boost business enterprise. Among the key announcements was an increase in the planned reduction in corporation tax, with rates falling by 2% from April, and 1% in each of the following three years, to reach 23%, accompanied by an adjustment in the bank levy to ensure that banks do not pay less tax as a result. The scrapping of £350 million of business regulations and a three-year moratorium on new regulations for firms with fewer than 10 staff were also confirmed, and the business rate relief ‘holiday’ for small businesses will be extended for another year. Sweeping changes to the Enterprise Investment Scheme were also announced, alongside a doubling of Entrepreneurs’ Relief, which rises to £10 million from 6 April. The small companies R&D tax deduction will also rise to 200% in April, and to 225% next year.

Acknowledging that the cost of living and the high price of oil pose a problem for many British families, the Chancellor confirmed a number of measures aimed at providing support. While a postponing of the planned rise in fuel duty had been anticipated, the Chancellor went a step further by cutting the duty by 1p a litre, and introducing a Fair Fuel Stabiliser, measures which will be paid for by additional taxes on North Sea oil firms. In addition to the planned increase in the income tax personal allowance, another future rise will take the allowance to £8,105, in April 2012. Meanwhile, first-time buyers will be offered further help to purchase new property by means of a proposed shared equity scheme, and help for those with mortgage arrears will be extended. Also of interest was the announcement of a 10% inheritance tax discount for taxpayers who leave at least 10% of their estate to charity, and a simplification of the Gift Aid scheme.

The Chancellor stated his intention to make the UK the ‘most competitive tax regime in the G20’, but also outlined plans to abolish 43 tax reliefs. Tobacco duty rises by 2% above inflation. While air passenger duty rates have been frozen, users of private jets will be subject to passenger duty for the first time.

Also of note for the future were plans to consult on a merger of the income tax and national insurance regimes, proposals to review the effect of the ‘temporary’ 50% tax rate, and the long-term creation of a flat-rate state pension worth around £140 a week.

Economic overview

UK economic growth forecasts were downgraded from 2.1% to 1.7% for 2011, and from 2.6% to 2.5% for 2012, which the Office for Budget Responsibility (OBR) put down to the weaker than expected final quarter of last year, the rise in world commodity prices, and higher than expected inflation. However, the OBR said that the effect ‘creates scope for slightly stronger growth in later years’.

Meanwhile, inflation, which is currently at a two-year high, is predicted to stay between 4% and 5% this year, falling to 2.5% in 2012. The Chancellor confirmed that the target for Consumer Price Index (CPI) inflation will remain at 2%.

National debt is expected to be 60% of GDP this year, rising to 71% in 2012 and falling to 69% by 2015. Borrowing is expected to fall from £146 billion this year to £122 billion next year, reaching £29 billion by 2015/16.

The Chancellor also revealed that the OBR will become a permanent fixture.

Business Tax and Investment Incentives

Corporation Tax

Corporation tax rates and bands are as follows:

Financial Year to	31 March 2012	31 March 2011
Taxable profits
First £300,000	20%	21%
Next £1,200,000	27.5%	29.75%
Over £1,500,000	26%	28%

The main rate of corporation tax will be reduced to 25% for the financial year commencing 1 April 2012 and to 24% for the financial year commencing 1 April 2013.

Associated companies

A new measure amends corporation tax small profits rate legislation. It will ensure that companies are not held to be associated through an attribution of rights (solely by virtue of relationships between individuals), but only where the level of commercial interdependence between the companies themselves makes it appropriate to do so.

The tax effect on companies which are held to be associated is to lower the profit threshold at which they fall within the main rate of corporation tax, in proportion to the number of associated companies.

Patents

A reduced 10% rate of corporation tax for profits arising from patents will come into effect from 1 April 2013.

Capital allowances

The rates of writing down allowances (WDAs) for new and unrelieved expenditure on plant and machinery will be reduced from 20% to 18% per annum for expenditure allocated to the main rate pool, and from 10% to 8% per annum for expenditure allocated to the special rate pool. This will have effect for chargeable periods ending on or after 1 April 2012 for businesses within the charge to corporation tax and on or after 6 April 2012 for businesses within the charge to income tax.

The Annual Investment Allowance (AIA) will be reduced from the current limit of £100,000 to a new limit of £25,000. This will have effect from April 2012.

The period over which expenditure can be given short life asset treatment will be increased from four years to eight years. This will have effect for expenditure incurred on or after 1 April 2011 for businesses within the charge to corporation tax and on or after 6 April 2011 for businesses within the charge to income tax.

Research and development (R&D)

The additional corporation tax deduction given to SMEs for qualifying R&D expenditure will increase from 75% to 100%, giving a total deduction of 200%. Subject to State aid approval, this will have effect for expenditure incurred on or after 1 April 2011. A further increase to 125% will have effect for expenditure incurred on or after 1 April 2012.

Controlled foreign companies (CFCs)

The following changes to the CFC rules will be introduced in Finance Bill 2011:

an exemption for certain intra group trading transactions where there is little connection with the UK
an exemption for CFCs with a main business of intellectual property (IP) exploitation where the IP and CFC have minimal connection with the UK
a statutory exemption which runs for three years for foreign subsidiaries that, as a consequence of a reorganisation or change to UK ownership, come within the scope of the CFC regime
an alternative to the current de minimis exemption, which will increase the limit to £200,000 profits per annum, and the replacement of the need to calculate chargeable profits with an accounts based measure
extension of the transitional rules for superior and non-local holding companies until July 2012.

A full reform of the CFC rules will be introduced in 2012.

Foreign branches

Legislation will be introduced to allow a UK resident company to make an irrevocable election for all of its foreign branches, located anywhere in the world, to be exempt from UK corporation tax on their profits. If an election is made, no relief will be available for foreign branch losses. This will have effect for accounting periods commencing on or after Royal Assent.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)

Subject to State aid approval, the rate of income tax relief given under EIS will increase to 30% for shares issued on or after 6 April 2011.

For EIS and VCTs, the following increases will, subject to State aid approval, be introduced for shares in investee companies that are issued on or after 6 April 2012:

the employee limit to fewer than 250 employees
the size threshold to gross assets of no more than £15 million before investment
the maximum annual amount that can be invested in an individual company to £10 million
the annual amount that an individual can invest under the EIS to £1 million.

Companies whose trade consists wholly or substantially in the receipt of Feed-In Tariffs (FITs) or similar subsidies will only be eligible for the two schemes where commercial electricity generation commences before 6 April 2012. Shares issued before 23 March 2011 will not be affected.

Business rates

The Government will offer up to 100% business rate discount for five years to businesses located in any of the 21 new Enterprise Zones.

The small business rate relief ‘holiday’ will be extended by one year from 1 October 2011.

Capital taxes

Capital Gains Tax (CGT)

The annual exempt amount for 2011/12 is £10,600.

Entrepreneurs' Relief

Qualifying gains are taxed at 10%. The lifetime limit for Entrepreneurs’ Relief rises from 6 April 2011 to £10 million. The increased limit applies only to qualifying disposals on or after that date.

Inheritance tax (IHT)

The IHT threshold is frozen at £325,000 until 5 April 2015.

A reduced rate of 36% will apply from April 2012 to death estates, where 10% or more of the net estate is left to charity.

National Minimum Wage (NMW)

The current NMW rates are as follows:

Age	21 and over	18-20	16 and 17
From 1 October 2010	£5.93	£4.92	£3.64

An apprentice rate of £2.50 applies to apprentices under 19, or those 19 and over in the first year of apprenticeship.

The Government has launched a new scheme to expose publicly employers who deliberately pay their staff less than the NMW. Under the scheme, which came into effect on 1 January 2011, defaulting employers may have their breaches publicised by the Department for Business, Innovation and Skills.

Income Tax and Personal Savings

Income tax rates

	2011/12	2010/11
Basic rate band – income up to	£35,000	£37,400
Starting rate for savings	*10%	*10%
Basic rate	20%	20%
Dividend ordinary rate	10%	10%
Higher rate - income over	£35,000	£37,400
Higher rate	40%	40%
Dividend upper rate	32.5%	32.5%
Additional rate – income over	£150,000	£150,000
Additional rate	50%	50%
Dividend additional rate	42.5%	42.5%
*Starting rate is for savings income up to the starting rate limit of £2,560 (£2,440) within the basic rate band. The rate applies to any balance of the limit remaining after allocating taxable non-savings income.

Personal allowances (ages are as at the end of the tax year)

Personal allowances		2011/12	2010/11
Personal allowances (PA)	under 65	£7,475	£6,475
	65 to 74	£9,940	£9,490
	75 and over	£10,090	£9,640

The personal allowance for those aged under 65 increases from 6 April 2011 to £7,475 and from 6 April 2012 to £8,105. The advantage to higher rate payers is countered by a lowering of the higher rate threshold, to £35,000 from 6 April 2011 and to £34,370 from 6 April 2012.

Married couple's allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%)		£7,295	£6,965

Age-related allowances are reduced by £1 for every £2 that adjusted net income exceeds £24,000 (£22,900), to a minimum PA of £7,475 (£6,475).The MCA is reduced by £1 for every £2 by which the income of the spouse or civil partner with the most income exceeds £24,000 (£22,900), subject to a minimum of £2,800 (£2,670).

Where income exceeds £100,000, the PA, including the minimum age-related allowances, is reduced to nil by £1 for every £2 that net adjusted income exceeds £100,000.

Qualifying time deposits

Interest paid on sums held in qualifying time deposit (QTD) accounts is subject to tax, but is currently paid gross to account holders. From 6 April 2012, tax will be deducted at source from taxable interest paid on new QTDs.

Pension savings

The annual allowance for tax-privileged pension saving is being cut from 6 April 2011, from £255,000 to £50,000. Where premiums paid in the pension input periods ending in the preceding three years are less than £50,000, unused relief may be carried forward. Where pension savings exceed the limit, a tax charge will arise – if the charge exceeds £2,000 the individual will be able to elect to have it met from the pension benefit, with the scheme paying the tax when the charge arises.

Meanwhile, the lifetime allowance on money that can be accrued in a pension fund and still receive tax relief, is set to fall from £1.8 million to £1.5 million from April 2012.

Pensions: requirement to buy an annuity

The pensions tax rules that make it obligatory for members of registered pension schemes to secure an income, usually by buying an annuity, by age 75 are to be removed. This will involve, amongst other things, changes to the rules applying to income drawdown arrangements.

With effect on or after 6 April 2011:

individuals with defined contribution pension savings from which they have not yet taken a pension will be able to defer a decision to take benefits from their scheme indefinitely
individuals with a lifetime pension income of at least £20,000 a year will be able to gain access to their drawdown pension funds without any cap on the withdrawals they may make
the age 75 ceiling will be removed from most lump sums to which entitlement arises and the tax rate on lump sum death benefits will be 55%.

Pensions taxation

Legislation will be introduced in the Finance Bill 2011 to remove the tax charge on borrowing linked to the cost of setting up, managing or administering the National Employment Savings Trust (NEST), subject to conditions. It will also remove the tax liability on any interest payments on late pension contributions made by an employer to qualifying pension scheme. In addition it will provide a regulation-making power to deal with any unintended tax consequences that may emerge as a result of the implementation of NEST and the employer duty provisions as set out in the Pensions Act 2008.

This measure will have effect on or after 6 April 2011 apart from the removal of the tax liability on any interest payments, which will have effect on or after Royal Assent.

Domicile and residence

It is proposed that from April 2012 the existing £30,000 annual Remittance Basis Charge (RBC) will be increased to £50,000 for resident, non-domiciled individuals (non-doms) who have been UK resident for 12 or more years. The current £30,000 RBC will continue to apply for those who have been resident for at least 7 out of the last 9 years, and fewer than 12 years. However, the remittance basis tax charge will not apply where non-doms remit foreign income or gains to the UK for the purpose of commercial investment in UK businesses.

Some aspects of the current tax rules for non-doms will be simplified. A proposed statutory residence test is expected to bring clarity.

Individual Savings Accounts (ISAs)

The Chancellor has confirmed that the annual ISA subscription limit for 2011/12 will rise from £10,200 to £10,680, up to £5,340 of which can be invested in a cash-only ISA.

Following the closure of the Child Trust Fund to new entrants earlier this year, the Government has announced that tax-free Junior ISAs will be launched from Autumn 2011. They will be available to UK resident children under the age of 18 who do not have a Child Trust Fund account, as a cash or stocks and shares product.

Furnished Holiday Lettings (FHL)

Following a consultation on the tax rules for FHL, the law will be changed by the Finance Bill 2011 so that:

FHL in both the UK and European Economic Area (EEA) will be eligible as qualifying FHL within the (revised) special tax rules. This is the current situation but is not within the legislation
the minimum period over which a qualifying property must be available for letting to the public in the relevant period is increased from 140 days to 210 days in a year with effect from April 2012
the minimum period over which a qualifying property is actually let to the public in the relevant period is increased from 70 days to 105 days in a year with effect from April 2012
losses made in a qualifying UK or EEA FHL business may only be set against income from the same UK or EEA FHL business (existing rules allow set off against general income)
a ‘period of grace’ will be introduced to allow businesses that do not continue to meet the ‘actually let’ requirement for one or two years to elect to continue to qualify throughout that period.

Reduced childcare relief for higher earners

Those joining employer-supported childcare schemes providing childcare vouchers or directly-contracted childcare on or after 6 April 2011 will, if they are higher rate or additional rate taxpayers, have the value of their tax relief restricted to match the value to basic rate taxpayers’. This will be achieved by introducing new income tax exempt limits of £28 per week for higher rate payers and £22 per week for additional rate payers.

Value Added Tax

From	4 Jan 2011	1 Jan 2010
Standard rate	20%	17.5%
VAT fraction	1/6	7/47
Reduced Rate	5%	5%
Current Turnover Limits
Registration - last 12 months or next 30 days over	£73,000 from 1 April 2011
Deregistration - next 12 months under	£71,000 from 1 April 2011
Annual accounting scheme	£1,350,000
Cash accounting scheme	£1,350,000
Flat-rate scheme	£150,000

Online registration and online filing

Following the Minister for the Cabinet Office’s statement of 23 November 2010 on the “Digital Agenda”, subject to consultation on the detail, the Government will mandate online VAT registration, de-registration and variations. The Government will also put forward regulations which, subject to consultation, will require all remaining VAT customers to file their VAT returns online and pay electronically for periods beginning on or after 1 April 2012.

Low value consignment relief (LVCR)

The Government will reduce the LVCR threshold from £18 to £15 from 1 November 2011. This is the threshold below which goods imported from outside the European Union (including the Channel Islands) are VAT-free. The person (or business) to whom the item is addressed is classed as the importer.

Tax and Travel

Car and fuel benefits

The taxable petrol and diesel car benefit is based on the car’s CO₂ emissions. It is calculated using the car’s UK list price and applying the ‘appropriate percentage’ as shown in the table below. The first two lines of figures in the table relate to qualifying low emissions cars (QUALECs).

The car fuel benefit is calculated by applying the same percentages to the fuel multiplier, which for 2011/12 is £18,800.

For cars emitting between 1 and 75g/km the appropriate percentage is reduced to 5% (8% for diesel) for 5 years from 6 April 2010.

List price cap

With effect from 6 April 2011, the list price cap of £80,000 is withdrawn. This will increase substantially the tax charge for drivers of very expensive cars. For example for a car with a list price of £170,000 and CO₂ emissions of 320g/km, the annual taxable benefit will increase from £28,000 to £59,500.

Future changes

From 6 April 2012 the table of tax bands will be extended down to a new 10% band for cars emitting up to 99g/km. This will replace the existing 10% band, so that QUALECs will no longer exist as a separate category. The rate for emissions of 100g/km will be 11% and will increase by 1% for every 5g/km to a maximum of 35%, as at present.

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2011.

CO₂ emissions	Appropriate percentage		Quarterly VAT
(g/km)	Petrol %	Diesel %	Fuel scale charge £	VAT on charge
(g/km)	Petrol %	Diesel %	Fuel scale charge £	£ (20%)
Up to 75	5	8	157	26.17
76 - 120	10	13	157	26.17
121 - 124	15	18	157	26.17
125 - 129	15	18	236	39.33
130 - 134	16	19	252	42.00
135 - 139	17	20	268	44.67
140 - 144	18	21	283	47.17
145 - 149	19	22	299	49.83
150 - 154	20	23	315	52.50
155 - 159	21	24	331	55.17
160 - 164	22	25	346	57.67
165 - 169	23	26	362	60.33
170 - 174	24	27	378	63.00
175 - 179	25	28	394	65.67
180 - 184	26	29	409	68.17
185 - 189	27	30	425	70.83
190 - 194	28	31	441	73.50
195 - 199	29	32	457	76.17
200 - 204	30	33	472	78.67
205 - 209	31	34	488	81.33
210 - 214	32	35	504	84.00
215 - 219	33	35	520	86.67
220 - 224	34	35	536	89.33
225 and above	35	35	551	91.83

Mileage rates

Changes to the HMRC business mileage rates are announced from time to time. The rates at 6 April 2011 are as follows:

Vehicle	First 10,000 miles	Thereafter
Car / Van	45p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

Car - fuel only advisory rates
Engine Capacity	Petrol	Diesel	LPG
Up to 1400cc	14p	13p	10p
1401 - 2000cc	16p	13p	12p
Over 2000cc	23p	16p	17p

HMRC will consider claims for a higher maximum rate, if it can be demonstrated that it is necessary for an employee to use a car with higher than average fuel costs.

Car costs – Vehicle Excise Duty (VED) rates

VED (‘Car Tax’) rates also reflect emissions, with lower scale rates for cars using alternative fuels. The following table shows the rates which apply from 1 April 2011 for cars registered on or after 1 March 2001:

VED Band	CO₂ emissions (g/km)	First year rate	Standard rate
VED Band	CO₂ emissions (g/km)	First year rate	Petrol & Diesel	Alternative fuels
A	Up to 100	£0	£0	£0
B	101 – 110	£0	£20	£10
C	111 – 120	£0	£30	£20
D	121 – 130	£0	£95	£85
E	131 – 140	£115	£115	£105
F	141 – 150	£130	£130	£120
G	151 – 165	£165	£165	£155
H	166 – 175	£265	£190	£180
I	176 – 185	£315	£210	£200
J	186 – 200	£445	£245	£235
K*	201 – 225	£580	£260	£250
L	226 – 255	£790	£445	£435
M	Over 255	£1,000	£460	£450
* includes cars emitting over 225g/km registered before 23 March 2006

Company vans

The taxable benefit for the unrestricted private use of vans is £3,000. There is a further £550 taxable benefit if the employer provides fuel for private travel.

Van and fuel charge	Van	Fuel	Total
Tax (20% taxpayer)	£600	£110	£710
Tax (40% taxpayer)	£1,200	£220	£1,420
Tax (50% taxpayer)	£1,500	£275	£1,775
Employer’s Class 1A NICs	£414	£75.90	£489.90

The flat rate of £3,000 is reduced to nil for vans emitting zero CO₂. There is no fuel benefit for such vans.

National Insurance Contributions (NICs)

As previously announced for 2011/12, the main and additional rates of NICs will increase by 1%.

		2011/12
Class 1 (not contracted out)		Employer	Employee
Payable on weekly earnings of:
Below £102 (lower earnings limit)		Nil	Nil
£102 - £136 (employers’ earnings threshold)		Nil	Nil
£136.01 - £139 (employees’ earnings threshold)		13.8%	Nil
£139.01 - £770 (upper accrual point)		13.8%	12%
£770.01 - £817 (upper earnings limit)		13.8%	12%
Over £817		13.8%	2%
_Over state retirement age, the employee contribution is generally nil_
Class 1A	on relevant benefits	13.8%	Nil
Class 2	Self employed	£2.50 per week
	Limit of net earnings for exception	£5,315 per annum
Class 3	Voluntary	£12.60 per week
Class 4*	Self employed on profits
	£7,225 - £42,475	9%
	Excess over £42,475	2%
_*Exemption applies if state retirement age was reached by 6 April 2011 _

Changes to payment dates - Class 2 NICs

From April 2011, HMRC will issue just two payment requests in the year in October and April, showing payments due by 31 January and 31 July, respectively. This means that the due dates for payment of 2011/12 Class 2 NICs will be 31 January 2012 and 31 July 2012.

Other measures announced

Charities, Gift Aid and SA Donate

The existing rule whereby the benefit received by individuals and companies as a result of making donations to charities and community amateur sports clubs in excess of £10,000 is to remain at 5% of the value of the gift, but the monetary cap on the value of such benefits is to increase from 1 April 2011 (companies) and 6 April 2011 (individuals) from £500 to £2,500.

The option to have self assessment repayments donated to charity under the SA Donate scheme is to be withdrawn in respect of:

tax returns for the tax year 2011/12 onwards
tax returns for years up to and including 2010/11 where the repayment is made on or after 6 April 2012.

The Government is to consult on a scheme to encourage donation of pre-eminent works of art or historical objects to the nation in return for a tax reduction.

From April 2013, a new scheme will allow charities to claim Gift Aid on up to £5,000 of small donations without the need for Gift Aid declarations.

‘Tainted’ charitable donations

The law will be changed to deny tax relief on charitable donations where one of the main purposes of the donation is to receive an advantage for the donor or a connected person directly or indirectly from the charity. These donations will be known as ‘tainted donations’ and there is no monetary limit on the amount of the donation which may be caught by these rules.

The rules will affect charity donations made on or after 1 April 2011 and replace the existing ‘substantial donor’ rules.

New data-gathering powers for HMRC

The Finance Bill 2011 will include measures to ‘modernise’ HMRC’s information powers by introducing a single set of general rules.

Notably, HMRC will be able to specify the format in which data is to be provided so that it may be more easily processed. The Government claims that the latest reforms will:

allow HMRC to use bulk information powers to gather specific pieces of information about a group of taxpayers, for use in risk analysis
introduce specialist ‘unnamed taxpayer’ powers that are narrowly defined in law to be used in very specific circumstances during a compliance check, such as when it is not clear who the taxpayer is
allow HMRC to apply to the tribunal for increased daily penalties where data is not supplied
cover data about certain foreign taxes
provide a penalty if a person is aware of an inaccuracy when providing information or documents and to correct a minor error in the legislation.

These changes are expected to be introduced from 6 April 2012 and will lead to a significant increase in HMRC’s powers.

Security for PAYE & NICs

Legislation in Finance Bill 2011 will introduce a power to allow HMRC to make regulations enabling them to require a security from employers for PAYE that is seriously at risk. The measure will also introduce a criminal offence for non-payment of a security.

Once the new power is in place, HMRC will use existing powers to make equivalent provision in respect of NICs.

Disguised remuneration

New measures will ensure that income tax and NICs on employment income are not avoided or deferred through the use of trusts or other intermediaries, including Employee Benefit Trusts (EBTs) and Employer Financed Retirement Benefit Schemes (EFRBS).

The legislation will have effect on or after 6 April 2011 and applies to rewards which are earmarked for an individual employee or otherwise made available on or after that date.

In addition, anti-forestalling provisions apply to the payment of sums (including loans) and the provision of readily convertible assets for the purposes of securing the payment of sums (including loans) where the sum is paid or the asset is provided between 9 December 2010 and 5 April 2011 where, if paid or provided on or after 6 April 2011, they would be caught by the legislation.

Mutual Assistance Recovery Directive (MARD)

Legislation will be introduced in Finance Bill 2011 to enable the UK to implement the MARD agreed by EU Finance Ministers during 2010. Under this Directive EU Member States can provide each other with assistance in the recovery of tax debts and duties, which includes service of documents and exchanging information in connection with the recovery of claims.

This measure fulfils the UK’s EU obligations by implementing the directive which provides reciprocal arrangements for recovering and enforcing tax debts and for the exchange of information across the EU.

The Directive becomes fully applicable on 1 January 2012 and the UK legislation transposing the Directive and setting out the detailed rules will come into force on that date.

Online tax calculator

The Government will build an online personal tax calculator by 2012 to allow individuals to estimate how much income tax and NICs they pay.

Move from RPI to CPI

From April 2012 the default indexation assumption for all direct taxes including income tax, NICs, inheritance tax, capital gains tax and ISAs, will move from the Retail Price Index (RPI) to the Consumer Price Index (CPI).

Simplifying the tax system

Ahead of the 2011 Budget, the Office of Tax Simplification (OTS) published its final recommendations for reforming the UK’s tax system.

The OTS, which was tasked with conducting a review of the UK’s tax relief system, has identified 47 reliefs which it says should be abolished and 17 which need to be simplified. It proposes that a further 37 reliefs should be examined in greater detail.

The report recommends the abolition of tax-free luncheon vouchers and relief on late night taxis. Others identified for removal include trade union subscriptions and the business premises renovation allowance.

Among those it suggests simplifying are: Entrepreneurs’ Relief; principal private residence relief; real estate investment trusts; and the enterprise investment scheme. The OTS also called for a wholesale review of inheritance tax and capital gains tax.

In the Budget, the Chancellor agreed to abolish 43 ‘complex reliefs’ but the most significant announcement for the long-term was the Government’s intention to consult on the possibility of ‘merging’ national insurance and income tax in future years.

2011/12 Tax Calendar

April 2011
5	Last day of 2010/11 tax year. Deadline for 2010/11 ISA investments. Last day to make disposals using the 2010/11 CGT exemption. Last date for contracting back into the State Second Pension for 2010/11.
14	Due date for income tax for the CT61 period to 31 March 2011.
19/22	Quarter 4 2010/11 PAYE remittance due.
20	Interest will begin to accrue on unpaid PAYE/NI for 2010/11.
30	Normal annual adjustment for VAT partial exemption calculations (monthly returns).
May 2011
3	Submission date of P46 (Car) for quarter to 5 April.
19	Last day for filing forms P14, P35, P38, and P38A - 2010/11 PAYE returns - without incurring penalties.
31	Last day to issue 2010/11 P60s to employees.
June 2011
30	End of CT61 quarterly period. Annual adjustment for VAT partial exemption calculations (March VAT year end).
July 2011
6	Deadline for submission of Form 42 (transactions in shares and securities). Deadline for submission of EMI40 (EMI Annual Return). File Taxed Award Scheme Returns, file P11Ds, P11D(b)s and P9Ds. Issue copies of P11Ds or P9Ds to employees.
14	Due date for income tax for the CT61 period to 30 June 2011.
19/22	Quarter 1 2011/12 PAYE remittance due. Final date for payment of 2010/11 Class 1A NICs.
31	Second self assessment payment on account for 2010/11. Annual adjustment for VAT partial exemption calculations (April VAT year end). Liability to 2nd £100 penalty arises for 2010 Tax Return still not filed. 5% surcharge on any tax unpaid for 2009/10. Deadline for tax credit Annual Declaration (if estimated, final figures required by 31/01/12).
August 2011
2	Submission date of P46 (Car) for quarter to 5 July.
31	Annual adjustment for VAT partial exemption calculations (May VAT year end).
September 2011
30	End of CT61 quarterly period. Last day for UK businesses to reclaim EC VAT chargeable in 2010.
October 2011
1	Due date for payment of Corporation Tax for period ended 31 December 2010.
5	Individuals/trustees must notify HMRC of new sources of income/chargeability in 2010/11 if a Tax Return has not been received.
14	Due date for income tax for the CT61 quarter to 30 September 2011.
19/21	Quarter 2 2011/12 PAYE remittance due.
31	Last day to file 2011 paper Tax Return without incurring penalties.
November 2011
1	Please ensure you are retaining your documents for the 2012 Tax Return.
2	Submission date of P46 (Car) for quarter to 5 October.
December 2011
30	Last day to file your 2011 Tax Return electronically if you wish to have a 2010/11 balancing payment of less than £2,000 collected through your 2012/13 PAYE code.
31	Last day for non-EC traders to reclaim recoverable UK VAT suffered in the year to 30 June 2011. End of relevant year for taxable distance supplies to UK for VAT registration purposes. End of relevant year for cross-border acquisitions of taxable goods in the UK for VAT registration purposes. End of CT61 quarterly period. Filing date for Corporation Tax Return Form CT600 for period ended 31 December 2010.
January 2012
1	Due date for payment of Corporation Tax for period ended 31 March 2011.
14	Due date for income tax for the CT61 quarter to 31 December 2011.
19/20	Quarter 3 2011/12 PAYE remittance due.
31	First self assessment payment on account for 2011/12. Capital gains tax payment for 2010/11. Balancing payment - 2010/11 income tax/Class 4 NICs. Last day to renew 2011/12 tax credits. First payment due date for 2011/12 Class 2 NICs. Deadline for amending 2009/10 Tax Return. Last day to file the 2011 Tax Return online without incurring penalties.
February 2012
1	£100 penalty if 2011 Tax Return not yet filed. Additional penalties may apply for further delay. Interest starts to accrue on 2010/11 tax not yet paid.
2	Submission date of P46 (Car) for quarter to 5 January.
14	Last date (for practical purposes) to request NIC deferment for 2011/12.
28	Last day to pay any balance of 2010/11 tax and Class 4 NICs to avoid an automatic 5% surcharge.
March 2012
31	End of Corporation Tax financial year. End of CT61 quarterly period. Filing date for Corporation Tax Return Form CT600 for period ended 31 March 2011.

Filing and payment changes for companies

twettone@wmcca.co.uk (Tim Wettone) — Tue, 15 Feb 2011 06:29:00 -0800

With effect from 1 April 2011, all companies will have to file their accounts and company tax returns electronically to H M Revenue & Customs using specific formats. The software we use has been updated to cope wth this, so compliance with the new obligations will remain part of our normal service to company clients.

In addition, again with effect from 1 April 2011, all payments for corporation tax must be made electronically as, after that date, cheques will not be accepted. If clients require assistance in doing this, please contact us for further guidance.

Baked Bean Bath - Thank You!

twettone@wmcca.co.uk (Tim Wettone) — Tue, 21 Dec 2010 01:12:00 -0800

We are thrilled to announce that a massive £2,165 was raised by Paul Susans when he recently sat in a baked bean bath in aid of St Michael's Hospice in Alton to mark his 25th anniversary at Wettone Matthews.

On 16th December 2010, a cheque for £2,055 was handed over to the charity, after which the money still kept coming in! Once gift-aid tax has been recovered, the total amount donated will exceed £2,500.

We would like to say a big thank you to all those who made this event possible, and especially a huge thank you to Paul for being willing to endure this ordeal for such a worthwhile cause.

Autumn Statement 2010

twettone@wmcca.co.uk (Tim Wettone) — Wed, 08 Dec 2010 14:12:00 -0800

Chancellor George Osborne presented the Autumn Statement to the House of Commons on 29 November 2010. This newsletter summarises the key points, and rounds up some of the recent tax changes announced by the Coalition Government.

The Autumn Statement is the Coalition's replacement for the previous Government's Pre-Budget Report. Whereas Gordon Brown and Alistair Darling used the occasion to make announcements on draft tax changes and legislation that would appear in the spring Budget, George Osborne gave a more concise speech focusing on the economy.

However, the Autumn Statement represents a good opportunity to take stock of where we are generally, in this busy first year of Coalition Government.

In this newsletter, we round up some of the most important tax and business changes announced in the last five months or so, starting with the Emergency Budget in June, including:

The forthcoming increase in the standard rate of VAT
Changes to pensions tax relief
Planned reforms to corporation tax.

We also summarise October's Comprehensive Spending Review, in which the Chancellor unveiled over £80 billion in public sector spending cuts.

If you would like to discuss any of the issues mentioned in this newsletter, do contact us.

'Britain on the mend', Osborne insists
The 2010 Comprehensive Spending Review
Emergency Budget Highlights
Corporate Tax - the 'five year plan'
Change in the Standard Rate of VAT
Pensions Tax Relief - the latest changes
Looking Ahead
What They Said...

This publication was prepared immediately following the Chancellor's Autumn Statement based on official press releases and supporting documentation. The publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by the publishers or the distributors for any loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

Britain 'on the mend', Osborne insists

Presenting his first Autumn Statement as Chancellor of the Exchequer, Chancellor George Osborne has asserted that Britain is 'on track' to recover from the deepest recession of post-war times.

The Statement was largely a response to the first Autumn forecast from the independent Office for Budget Responsibility (OBR), created by the Coalition Government earlier this year.

Despite issuing a cautionary note on the reliability of forecasts, Mr Osborne went on to argue that the OBR report vindicated the Government's 'decisive action' on the economy.

As widely predicted by economists, the economic growth forecast for 2010 was increased, from 1.2% to 1.8%. However, the estimates for 2011 and 2012 were reduced from 2.3% to 2.1%, and from 2.8% to 2.6% respectively, with the forthcoming increase in VAT - coupled with over £80 billion of spending cuts - expected to slow the pace and result in a period of 'sluggish growth'. Meanwhile public borrowing forecasts for the current financial year have been revised downwards by £1 billion, and borrowing is expected to fall from £148.5 billion to £18 billion in 2015/16.

Mr Osborne was keen to emphasise the OBR's view that Britain will not experience a double-dip recession, and that there will instead be a 'gradual rebalancing' of the economy, with the Government set to reach its target of eliminating the current structural deficit a year early.

Turning to employment, the Chancellor highlighted the OBR's prediction that public sector job losses over the coming four years will be lower than previously expected, falling from 490,000 to 330,000. This was said to be a result of the Government's emphasis on making welfare cuts, rather than reductions in departmental spending.

The Chancellor also set out a number of measures intended to support UK economic growth, with the announcement of a programme of 'significant and far-reaching' reforms to corporation tax to improve competitiveness, including plans to introduce a lower 10% rate of corporation tax on profits from patents. A new Growth Review has also been launched, with priority being given to planning and employment law, support for exporters and inward investors, and reforms to the competition regime.

The 2010 Comprehensive Spending Review

In recent years, Government spending has consistently exceeded Government receipts, resulting in an annual deficit and a spiralling national debt. Tackling this deficit has become the Coalition's top priority, prompting the Government to conduct a detailed review of public spending.

Chancellor George Osborne presented the Comprehensive Spending Review to the House of Commons on 20 October 2010. He unveiled over £80 billion in public sector spending cuts, including £7 billion in welfare savings, as part of the Government's commitment to eliminate the deficit by 2015. With Government departmental budget cuts averaging 19% over four years, the Chancellor estimated that around 490,000 public sector jobs may be lost, now predicted at 330,000.

Some of the key points from the Spending Review are outlined below:

The state retirement age for men and women is to be equalised at 65 by November 2018. It will rise to 66 for men and women by 2020 - four years ahead of the previous plan
Proposals will be set out to replace all working-age benefits and tax credits with a single, simple Universal Credit over the course of the next two Parliaments
The educational maintenance allowance for 16-19 year olds will be dropped
The child element of the Child Tax Credit will be increased by £30 in 2011/12 and £50 in 2012/13 above indexation, meaning annual increases of £180 and then £110 above the level promised by the Labour Government
The Chancellor confirmed that Child Benefit will be removed from families with a higher-rate taxpayer. Child Benefit will now continue to be paid until a child leaves full-time education at the age of 18 or even 19
Universal benefits for pensioners will be retained exactly as budgeted for by the previous Government and the temporary increase in the Cold Weather Payment will be made permanent
Apprenticeship funding will be increased by 50% over the next four years, covering 75,000 extra places
The Train to Gain programme will be dropped and replaced with an SME-focused training scheme
A permanent tax levy on banks is being introduced.

Emergency Budget highlights

Following a review, the newly appointed Chancellor George Osborne delivered an Emergency Budget on 22 June 2010.

Some of the key announcements are outlined below.

Value Added Tax (VAT)

As widely anticipated, an increase in the standard rate of VAT was confirmed, and will see the main rate rising from 17.5% to 20% on 4 January 2011. The move is expected to raise more than £13 billion a year by the end of the Parliament.

Capital gains tax (CGT)

A new 28% top rate of CGT has come into effect for gains realised after 22 June 2010, where an individual has total taxable income and gains of more than the basic rate limit for income tax (£37,400 for 2010/11). The lifetime limit for Entrepreneurs' Relief, which reduces the effective CGT on qualifying gains to 10%, has been raised from £2 million to £5 million.

Personal allowance

With the aim of protecting lower earners from the squeeze, the income tax personal allowance will rise to £7,475 in April 2011, removing around 880,000 people from the requirement to pay any income tax. However, higher rate taxpayers will be prevented from reaping the benefits of the changes by means of a reduction in the basic rate limit for 2011/12.

National insurance contributions (NICs)

Employers will see an increase in the threshold at which they start to pay national insurance contributions, which will rise by £21 a week above indexation. In addition, qualifying new businesses in targeted areas of the UK can now enjoy a national insurance 'holiday' of up to £5,000 for each of the first 10 employees hired within the first year of business.

Corporation tax

Corporation tax will be reduced to 27% from April 2011, with a further series of 1% cuts taking place each year until the rate reaches 24% in 2014. The small profits rate will also be cut from 21% to 20% from April 2011.

Small business finance

In a bid to improve access to finance for small businesses, a new Enterprise Capital fund of £37.5 million has been introduced, and the Enterprise Finance Guarantee is providing £200 million of additional lending until 31 March 2011.

Other announcements included a series of proposed changes to capital allowances to take effect from April 2012, plans to replace Air Passenger Duty with a per-plane aviation duty, and the creation of the new Office of Tax Simplification.

Corporate Tax - the 'five year plan'

Alongside the Chancellor's Autumn Statement on 29 November, the Treasury published the Government's plan to reform the corporate tax system over the next five years.

Key elements include:

reiterating the Government's intention to reduce the main rate of corporation tax - intended to give the UK the lowest main rate in the G7 and the fifth lowest in the G20
focusing more on profits from UK activity in determining the tax base rather than attributing the worldwide income of a group to the UK
taking action to reform the Controlled Foreign Company (CFC) regime and the taxation of foreign branches by adopting a more territorial approach
identifying where the tax system can be simplified to reduce compliance costs on business
improving the effectiveness of research and development tax credits
introducing a preferential regime for profits arising from patents, known as a Patent Box.

The Patent Box regime will be optional, but companies opting in can expect profits from patents first commercialised after 29 November 2010 to be taxed at a 10% rate from 1 April 2013.

Timetable

Following the publishing of papers and more details between now and Spring 2011, we will see legislation on capital allowances reductions, on CFC rules interim improvements and on foreign branch reform in Finance Act 2011, with the completion of the CFC changes and legislation on the Patent Box following in Finance Bill 2012. Some draft legislation will be published on 9 December 2010.

Alongside these changes, Spring 2011 sees the first planned reduction in the rates of corporation tax, with the main rate set to fall to 24% by Spring 2014.

Change in the standard rate of VAT

The standard rate of VAT is set to rise from 17.5% to 20% on 4 January 2011. It is hoped the additional revenue generated from the increase will help to reduce the UK deficit.

Applying the higher rate

The rate of VAT that businesses charge depends on the date that goods or services are supplied. For VAT purposes this is the date that goods physically change hands (or a service is completed); or payment is received; or an invoice is issued - whichever is the earliest. The rules are modified in certain situations, including when there is a change in the standard rate of VAT.

For any supplies of standard-rated goods or services that take place on or after 4 January 2011 businesses should charge VAT at the new rate of 20%. As a consequence, firms currently calculating their VAT using the VAT fraction of 7/47 should use the new fraction of 1/6 from 4 January 2011.

Zero-rated supplies, such as basic foodstuffs, children's clothing and books; exempt supplies, such as education and health; and supplies subject to VAT at the reduced 5% rate, such as domestic fuel and power, are not affected by the change.

Anti-forestalling legislation

Finance (No.2) Act 2010 included anti-forestalling legislation to prevent the 17.5% rate applying to supplies of goods or services that are provided on or after 4 January 2011.

The legislation prevents forestalling by introducing a supplementary charge to VAT of 2.5% on the supply of goods or services where the customer cannot recover all the VAT on the supply, and one or more of the following conditions are met:

the supplier and customer are connected parties;
the value of the supply (and any related supplies made under the same scheme) exceeds £100,000. But this does not apply if the prepayment or issuing of an advance VAT invoice is normal commercial practice;
the supplier or someone connected to the supplier funds a prepayment for the goods or services; or
an advance VAT invoice is issued where payment is not due in full within six months (except hire purchase invoices issued in accordance with normal commercial practice).

The supplementary charge to VAT is due on 4 January 2011 and must be accounted for on the supplier's VAT return covering that date.

Pensions tax relief - the latest changes

In the Emergency Budget, the Government made it clear that it intended to replace a series of complicated changes to the pensions regime, due to start next April. Draft replacement legislation has recently been issued, with rules which apply to everyone, rather than targeting high earners.

Annual allowance

The main change will be to reduce the annual allowance (AA) from its current level of £255,000 to £50,000 with effect from 6 April 2011. AA is the amount by which the total pension savings can grow each year; above this value the surplus gives rise to an annual allowance charge as the individual's top slice of income.

Pension savings

Members of defined contribution (DC) schemes, in particular personal pensions (PPs), will need to look at the total of the contributions (whether personal, employer or third party) during the pension input period (PIP) for all of their pension savings. The PIP is usually the scheme year to the anniversary date which falls within the relevant tax year.

Members of defined benefits (DB) schemes, such as occupational final salary schemes, will have to work out how much their accrued pension has increased during the PIP.

Example

Self employed personal pension with AA charge

Alison, who is self employed, has taxable income of £110,000 in 2011/12. She is a member of two different PP schemes. Scheme A has a PIP ending on 31 March; Scheme B's ends on 30 November. She contributes £2,000 per month (£2,500 before basic rate tax relief) to Scheme A and £2,800 per month (£3,500 before tax relief) to Scheme B. She has been contributing similar amounts to these schemes for the previous three tax years. During the tax year ending 5 April 2012, her total pension contributions are:

Scheme A (year to 31 March 2012)	£30,000
Scheme B (year to 30 November 2011)	£42,000
Total pension savings	£72,000
AA for 2011/12	£(50,000)
Excess subject to AA charge	£22,000

The AA charge will therefore be £8,800 (£22,000 @ 40%).

The three year carry forward rule

Unused AA for the previous three tax years can be carried forward and added to the current year's £50,000 AA. For the tax year 2011/12, the first of the new regime, carry-forward will be available against an assumed AA of £50,000 for each of the tax years 2008/09, 2009/10 and 2010/11. No carry forward is available from an earlier tax year unless the individual was a member of a registered pension scheme at some time during that tax year.

Lifetime limit

The lifetime limit, which sets the maximum figure for tax-relieved savings in the fund, currently stands at £1.8 million. However, this limit is to be reduced to £1.5 million, probably from April 2012. For more information on the new rules, please contact us.

Looking ahead

On 9 December the Government will publish draft clauses planned for inclusion in the Finance Bill 2011. This fulfils the Government's pledge to publish draft clauses for each Finance Bill at least three months in advance. The change forms part of the Coalition's new approach to tax policy making, which is supposedly based on 'predictability, stability and simplicity'.

At the same time, the Government will also report back on several key consultations including:

Tax policy making: a new approach
Simplification of Corporate Capital Gains for companies
Pensions Annuitisation
Furnished Holiday Lettings and
The review of HM Revenue and Customs' powers.

The Chancellor has already announced that the 2011 Budget will take place on 23 March. While it is unclear exactly what new measures will be included, there are some changes that have already been announced for the 2011/12 tax year. These include an increase in the personal income tax allowance, a rise in national insurance contribution rates, and a reduction in the corporation tax rate.

What they said...

'Employment is growing. The deficit is falling. Unemployment is set to fall. The plan is working.'
Chancellor of the Exchequer, George Osborne

'This Autumn Statement does nothing to alleviate the effects of the summer recklessness that led the Chancellor to gamble with our future.'
Shadow Chancellor, Alan Johnson

'The Growth Review demonstrates a welcome focus by the Government on returning the UK economy to balanced, sustainable growth - something that will reassure businesses as they look towards making 2011 a Year for Growth.'
David Frost, British Chambers of Commerce

'In short, by 2015 the UK economy will still not be back to where it was before the recession hit in 2008. No politician should seize on these figures as some sort of good news story, least of all one that has just abandoned their plans to publish a jobs and growth strategy for the country.'
Brendan Barber, Trades Union Congress

Baked Bean Bath - 30th November 2010

twettone@wmcca.co.uk (Tim Wettone) — Mon, 08 Nov 2010 10:11:00 -0800

On 1 December 2010, Paul Susans, one of our directors here at Wettone Matthews, will be celebrating 25 years of working with the firm. To mark this occasion, he asked his colleagues what he could do to raise some funds for a good cause and the suggestion was to sit in a bath of baked beans in a shop window!

St. Michael's Hospice shop in Alton's High Street have agreed to this so on Tuesday 30 November 2010, (Market Day!), Paul will be accepting his colleagues' challenge between 11.00am and 12.30pm. If you would like to sponsor him, you can download a sponsorship form which also contains more information about Paul's bath, alternatively pop along to the Alton shop on 30th November to see him complete his challenge!

Don't assume we receive copies of HMRC's forms

twettone@wmcca.co.uk (Tim Wettone) — Tue, 14 Sep 2010 10:09:00 -0700

H M Revenue & Customs has recently announced that, in order to save £1.25 million, they will no longer send copies of certain forms to agents acting on behalf of taxpayers. Some have been withdrawn already but, in December 2010, perhaps the biggest difficulties will arise from the withdrawal of copies of notices of coding to be used within PAYE.

HMRC indicate that the forms will be amended to include a message suggesting that they are shown to your agent or adviser.

Therefore, if any clients receive a form or letter from HMRC in future, please don't assume we have received a copy. Send it to us to deal with, especially notices of coding as they are often incorrect and, unless adjusted, will result in the payment of too little or too much tax each month.

WE HAVE MOVED!

twettone@wmcca.co.uk (Tim Wettone) — Mon, 05 Jul 2010 09:07:00 -0700

We are pleased to announce that we have relocated to new office premises as from Monday 5th July 2010.

The new address is Market House, 21 Lenten Street, Alton, Hampshire GU34 1HG.

After having been located at Westbrooke House in Alton for over 30 years, it was time to move to larger and more modern premises that are better suited to our changing needs.

There is on-site parking for staff and clients, so it will now be FREE to visit us.

We have had to change our telephone and fax numbers, so please call us on 01420 543001 in future. Calls made to our old number should be greeted by a recorded message advising the new number.

We look forward to welcoming our clients and friends at our new home.

Wettone Matthews

Budget 2012 report

Contents

Budget Highlights

Chancellor cuts 50p rate in a Budget to ‘reward work and support growth’

Business Tax and Investment Incentives

Corporation Tax

Capital allowances

Research and development (R&D)

Controlled foreign companies (CFCs)

Media

Enterprise Management Incentives (EMI)

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)

Patent Box

Small businesses

Anti-avoidance

Capital taxes

Capital gains tax (CGT)

Inheritance tax (IHT)

Duties

Stamp Duty Land Tax (SDLT): Residential property over £2 million

SDLT: Enveloping of high value residential properties

Air Passenger Duty

Tobacco products duty

Alcohol duty rates

National Minimum Wage (NMW)

Income Tax and Personal Savings

Income tax rates

Personal allowances (ages are as at the end of the tax year)

Individual Savings Accounts (ISAs)

Furnished Holiday Lettings (FHLs)

Child Benefit

Personal allowances and tax rates for 2013/14

Cap on unlimited tax reliefs

Domicile and residence

Value Added Tax

Hot food and premises

Approved alterations to listed buildings

VAT standard rate clarifications

Tax and Travel

Car and fuel benefits

Changes from 2013/14

VAT on fuel for private use in cars

Plug-in grants

Mileage rates

Car costs – Vehicle Excise Duty (VED) rates

Company vans

National Insurance Contributions (NICs)

Other measures announced

Income tax avoidance: Life insurance policies

Personal Tax Statement

General Anti-Abuse Rule (GAAR)

Gift Aid small donations scheme

Real Time Information (RTI) and PAYE penalties

Bank Levy rate

National Loan Guarantee Scheme

2012/13 Tax Calendar

Autumn Statement 2011

Contents

Overview: Chancellor sticks to Plan A for the economy

Business and investment

Tax changes

Enterprise Zones

Venture Capital Schemes

Business rates

Employment regulation

Planning law

Credit easing

Innovation

Housing measures

Travel and infrastructure

Fuel duty

Roads and rail

Air Passenger Duty

Superfast broadband

Pensions Update

Automatic pension enrolment delayed for small businesses

Changes to the state pension age

Jobs and education

Youth Contract