Highlights
On the one hand, George Osborne offers 1p fuel price relief per litre and increased personal, Capital Gains Tax and
ISA allowances. On the other, National Insurance increases by 1% and wine is 15p dearer per bottle.
Tax for non-UK domiciled individuals
Tax simplification
The Government has announced measures to address the complexity of the tax system which could include integrating the operation of Income Tax and National Insurance Contributions (NIC). They believe this will remove distortions, reduce burdens on business and improve fairness.
The Government will also look to reform the State Pension for future pensioners. The current system is complex and it is not easy for individuals to assess their entitlement. The Department of Work and Pensions (DWP) will shortly publish a Green Paper to consult on options for reform, which will include a proposal for a single-tier pension currently estimated to be around £140 a week.
- Fuel Duty will be cut by 1p per litre from 6pm on Budget day.
- The 2011/12 inflation-only increase in Fuel Duty will be deferred to 1 January 2012.
- The 2012/13 increase in Fuel Duty will be implemented on 1 August 2012.
- The Government will abolish the Fuel Duty Escalator and replace it with a Fair Fuel Stabiliser. This will mean that when oil prices are high, Fuel Duty will increase by inflation only.
- For motorists using their own vehicles for work, the Approved Mileage Payment will rise to 45p/mile from 40p for the first 10,000 miles and remain at 25p thereafter.
- The rate of Inheritance Tax will drop to 36% from April 2012 for estates leaving 10% or more to charity.
- The introduction of a Gift Aid small donations scheme will allow charities to claim Gift Aid on up to £5,000 of small donations without the need for Gift Aid declarations.
- The Government is to reduce the main rate of Corporation Tax by a further 1%. From April 2011 the rate will reduce to 28% and by 2014 will reach 23%.
- Enterprise Investment Scheme relief will increase from 20% to 30%.
- Effective from 6 April 2011, the lifetime limit on Capital Gains qualifying for Entrepreneur’s relief will be doubled to £10 million.
- The Government has announced £100 million of funding for local authorities to repair potholes caused by the exceptionally cold winter.
- £250 million has been allocated to support first-time buyers to purchase a new-build property. The FirstBuy shared equity programme will assist over 10,000 households with equity investments jointly funded with house builders.
- Real Estate Investment Trusts will become easier to set up and made more accessible to investors.
- From April 2011, the personal allowance for under 65s will increase to £7,475, and by a further £630 to £8,105 in 2012/13. For the over 65s, this will increase to £9,940 from April 2011 and to £10,090 for the over 75s.
- As previously announced, the main and additional rates of NIC will increase by 1% for 2011/12.
- The overall ISA allowance for the 2011/12 tax year has been confirmed as £10,680 of which cash investment is limited to £5,340.
- The Capital Gains Tax (CGT) allowance will increase to £10,600 for 2011/12.
- As previously announced in March 2010, Tobacco Duty will increase by 2% above the Retail Price Index (RPI). Duty on rolling tobacco will increase by an additional 10%. Both are effective from 6pm on Budget day.
- Aviation Tax rates will be frozen for 2011/12. The RPI increase for 2011/12 will be deferred and implemented alongside the April 2012 RPI increase.
- As previously announced, Alcohol Duty rates will increase by 2% above RPI on 28 March, adding 4p to a pint of beer, 15p to a bottle of wine and 54p to a bottle of spirits.
Tax for non-UK domiciled individuals
The existing £30,000 annual charge will be increased to £50,000 for non-UK domiciled individuals who have been UK resident for 12 or more years and who wish to retain access to the remittance basis of taxation. The £30,000 charge will be retained for those who have been resident for at least seven years but less than 12 years. In addition, the charge will be removed when the non-UK domiciled individual remits foreign income to the UK for the purpose of investing in UK business.
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