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Budget 2012 Highlights

August 8, 2012

For months there has been speculation over what the Chancellor would announce at the Budget 2012. Yet in the end top chartered accountants were fairly spot on with their predictions making the actual Budget feel fairly anti-climatic.

Now if your accountant hasn’t filled you in yet on the governments proposed changes to taxes, allowances and reliefs, here is a quick highlight of some of the proposed changes:

  1. Personal allowances – as expected these will be raised to £9,205 in 2013/14, with the higher rate threshold being reduced to £41,450.
  2. Age allowance – these will be frozen from 2013/14, before being phased out completely.
  3. Income tax relief – the government have set a maximum limit on the amount of the income tax relief that can be claimed from 2013/14.
  4. Income tax – additional rate of income tax will be reduced to 45% from 2013/14.
  5. Stamp Duty Land Tax – a 7% rate will be introduced on residential properties worth over £2m, as well as a series of measures to counter ownerships set up through corporate entities.
  6. Tax relief – the government plan to restrict the amount of tax relief which is available on benefits from regular premium life assurance policies.
  7. Child benefits – for families earning over £50,000 a year, this relief will be phased out.
  8. Corporation tax – the main rate will be cut to 24% from April of this year (2012) and then to 22% by April 2014.
  9. EMI (Enterprise Management Incentive) schemes – individual grant limits will be increased from £120,000 to £250,000.

And this is forgetting the increased measures the government is putting into place to reduce the number of tax avoidance cases.

How will these affect me?

There is no denying that each of these tax changes comes with its own advantages and disadvantages. So whether you are a business or an individual we thoroughly recommend speaking to your accountant who can help you to make the most of them.

Alternatively if you haven’t got a chartered accountant, now is the time to get one. With the right tax advice you can use this information to your advantage and offer your finances a brighter future.

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