Other Tax Changes Ahead
Newsletter issue - June 2010.
The Coalition Programme for Government also contains a number of other proposed tax and law changes that may impact on you or your business if they come to pass.
The business-focused proposals include:
- Review of the IR35 rules as part of a review of all small business taxation.
- Refocus R&D tax credits on hi-tech companies, small firms and new businesses.
- Review the taxation of furnished holiday lettings so UK businesses are not penalised.
- Encourage farmers to convert existing buildings into affordable housing.
- Increase the threshold from which employer’s NI is payable by £21 per week, to £6,812 a year from 6 April 2011. The employees’ NI thresholds will not rise, so employees and the self-employed will bear the full brunt of the 1% increase in all NI rates.
- Provide those out of work with business mentors and start-up loans to help them start their own businesses.
The proposals affecting individuals include:
- No reduction in the imposition of Inheritance Tax in the foreseeable future.
- No reduction in Income Tax rates until the Budget deficit has been reduced.
- Increase the personal allowance significantly from 6 April 2011, but reduce the benefit of this allowance for those with high incomes. The personal allowance is currently tapered away for those with total income over £100,000, so this threshold may be lowered.
- Introduce a transferable married couples allowance, but only for basic rate taxpayers.
- Review of the taxation of individuals who are not domiciled in the UK, but who have a connection to the UK so they have some UK tax obligations.
- End Government funding of Child Trust Funds from 1 January 2011, and reduce the value of vouchers given for new-borns from 1 August 2010.
- Reform the administration of Working and Child Tax Credits to reduce fraud and overpayments.
- Reduce the penalty for living as a couple in the Working and Child Tax Credits system.
- Review the effectiveness of raising the Stamp Duty threshold for first-time purchasers.
- Remove the requirement to purchase a pension annuity at age 75.
- Phase out the default retirement age of 65.
- Bring forward the increase in the State Pension Age (SPA), which is the age from which you can draw the State Pension. This will be 66 years for men from 2016 and 66 years for women from 2020. The SPA has already increased beyond 60 for women, and is set to rise gradually to 68 for everyone by 2046.
We expect more detail on these proposals to be announced in the Budget on 22 June.