We’re busy putting together an exhaustive analysis of yesterday’s UK Budget. Below we’ve put some of the main points relating to income tax changes as these are the changes that you’ve said affect you most. For a complete 2011 Budget summary, check out our dedicated Budget 2011 website which contains everything you need to know about yesterday’s Budget.
Tax Free Allowances
- The amount of income that can be received in a year before being taxed is increasing from £6,475 to £7,475 from 6 April 2011.
- The basic rate band is decreasing from the current level of £37,400 to £35,000 from next month and then to £34,370 from April 2012.
- The threshold for the higher rate of tax (40%) will be reduced from £48,875 to £42,475
- From 6 April 2011 the rate for the first 10,000 mile of business travel is increasing to 45p per mile from the current rate of 40p per mile.
Fuel Benefit for Company Car Users
- The taxable amount of fuel benefit for company car users is increasing from £18,000 to £18,800 from 6th April 2011.
Tax Relief on Pension Contributions
- The annual amount of pension contributions on which tax relief will be available is being reduced from £255,000 to £50,000.
Capital Gains Tax Annual Exempt Amount
- The annual capital gains exemption amount is currently £10,100 and will be increased to £10,600 with effect from 6 April 2011.