Budget Summary March 2011 – Changes previously announced for 2011-12, now confirmed
Income Tax Personal Allowances:
- Personal allowance under 65, £7,475
- Personal allowance aged 65 to 74, £9,940
- Personal allowance aged 75 or over, £10,090
Income limit for aged related allowances is £24,000.
Income Tax Rates – unchanged at 20%, 40% and 50%. Basic rate limit £35,000.
Review of HMRC powers, deterrents and safeguards security for PAYE and National Insurance contributions— Legislation will be introduced in Finance Bill 2011 to give HMRC the power to require a security from employers for PAYE and NICs that are seriously at risk of non-payment. It will be treated as a criminal offence if security is not provided when required.
Furnished Holiday Lettings (FHL) – The following changes are confirmed from April 2011:
- Loss relief may only be offset against income from the same FHL business.
- UK losses can relieve UK FHL income only and similarly with the EEA losses.
From April 2012, to qualify as a furnished holiday lettings business, a property must:
- Be available to let for at least 210 days and actually let for 105 days in a year.
Businesses meeting the actually let threshold in one year may elect to be treated as having met it in the two following years (“period of grace”), providing certain criteria are met.
Employer-Supported Childcare — Relief is to be restricted for higher earners who join employer-supported childcare schemes from 6 April 2011.
Restricting Pensions Tax Relief — Changes announced are:
- the annual allowance for tax relief on pension savings for individuals will be reduced from £255,000 to £50,000 from 2011-12, and
- the lifetime allowance will be reduced from £1.8m to £1.5m from 2012-13.
Pensions Annuitisation — The requirement to annuitise by the age of 75 is to be removed from April 2011.