budget comment

Whittingham Riddell Summary:

George Osborne presented his second Budget on Wednesday 23 March 2011.

In his statement he said that the "Budget is about reforming the nation's economy, so that we have enduring growth and jobs in the future".

Towards the end of last year the government issued the majority of the clauses, in draft, of Finance Bill 2011 together with updates on consultations. The publication of the draft Finance Bill clauses is part of the government's improvements in the way tax policy is developed, communicated and legislated. The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2011 and some take effect at a later date, so the timing needs to be carefully considered.

Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments.

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

Main Budget proposals

• An additional 1% cut in the main rate of corporation tax to 26% from April 2011.
• Enhanced tax incentives for investment in higher risk companies and for SMEs investing in research and development.
• Reintroduction of Enterprise Zones.
• Entrepreneurs' Relief limit doubled to £10 million. 
• An increase in the mileage rate payable to own car drivers.
• Consultation on integrating income tax and national insurance contributions.
• Reduced inheritance tax rates for those giving one tenth of their estate to charity.

Previous announcements

Some of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:

• Changes to tax and national insurance rates and thresholds
• Pensions - new regimes for tax reliefs and annuities
• Furnished holiday lettings changes
• The Corporate Tax Road Map