Personal Tax

The 2010/11 tax rates and allowances as announced in the Pre-Budget Report have been confirmed and can be found here. Most of the rates for 2010/11 have been held at 2009/10 levels.

The main changes in the 2010/11 tax rates are the 50% additional rate band for income over £150,000 (42.5% for dividend income) and the withdrawal of the personal allowance at a rate of £1 for every £2 above the income limit of £100,000.


Corporation Tax

The rates for the financial year ended 31st March 2011 have been confirmed, please click here to be redirected to our tax rates and allowances page.

The small companies rate for the financial year ended 31st March 2011 has will not rise to 22% as previously indicated, this rise has been postponed to 2012.


VAT Changes

As previously advised, the standard rate of VAT will return to 17.5% on 1st January 2010. Also on this date, the VAT Flat rate scheme percentages will change. Please click here to read our article on these changes.



Changes from April 2011 (2011/12 Tax Year)


Tax Relief on Pensions for High Earners

As announced at the 2009 budget, higher rate tax relief will be restricted on pension contributions made by high earners.

The chancellor has now announced that employer pension contributions will be included in higher rate tax relief restrictions. He also announced that the income limit for which the restrictions apply will be reduced to £130,000.

He is, therefore, effectively saying that anyone earning above £130,000 is going to see their tax relief restricted to basic rate.


National Insurance Contributions

We also feel it would be worthwhile to remind you of the planned increase to National Insurance Contributions.

The chancellor initially announced an increase of 0.5% to employee's and employer's National Insurance Contributions.

However, he has now announced that from 2011/12 the main rate of Class 1 and Class 4 National Insurance Contributions will be increased by 1% to 12% and 9% respectively.

From 2011/12 the Class 1 Employer rate of National Insurance will also be increased by 1% to 13.8%. This increased rate will also apply to Class 1A and Class 1B contributions.

Finally, also from 2011/12 the additional rate of Class 1 and Class 4 contributions will be increased by 1% to 2%.