Budget 2012 – Summary

George Osborne presented the 2012 Budget on Wednesday 21 March 2012.

These blogs focus on the direct and indirect tax measures announced, as well as the announcements made previously which affect the 2012-13 tax year and beyond.

It concentrates on the issues likely to affect you, your family and your business. To help you decipher what was said I have included some comments too.

If you have any questions please do not hesitate to contact me for advice.

Main Budget proposals

  • The personal allowance for tax will increase by £1,100 to £9,205 from April 2013. There will be a decrease in the 40% threshold by £2,125 to £32,245 so that 40% tax payers only gain a quarter of the benefit compared to 20% tax payers.
  • The age related personal allowance will be withdrawn for those born after 6 April 1948.  This means that those reaching 65 after 6 April next year will no longer receive the age allowance.  The age allowance for those who do qualify will be frozen until it is the same as the normal personal allowance.
  • The main rate of corporation tax rate (ie for larger companies) will decrease by 2% (to 24%) from 1 April 2012. This is 1% more than previously announced. It will then continue to fall by 1% per annum until it reaches 22%.

Key announcements made previously

  • The personal allowance for tax will increase by £630 to £8,105 from April 2012. There will be a decrease in the 40% threshold by the same amount so that 40% tax payers only gain the same benefit as those paying at 20%.

The Budget proposals may be subject to amendment in the Finance Act. You should contact me before taking any action as a result of the contents of this summary.

 

Cath Walker

 

 

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