Sheppards Chartered Accountants, 22 The Square,
The Millfields, Plymouth, Devon. PL1 3JX

Financial News

Changes for year ended 5 April 2011

Capital Gains Tax
The Capital Gains Tax increases to 28% for higher and additional rate taxpayers from 23 June 2010 but remains at 18% for basic rate tax payers. Entrepreneur’s relief is retained for business gains and the lifetime limit has been increased to £5million. The annual exemption is unchanged at £10100.

Furnished Holiday Lettings
The favourable tax regime for UK furnished holiday lettings is retained and new legislation will also include properties owned in Europe.

Value Added Tax
The VAT rate will increase from 17.5% to 20% from 4 January 2011. The flat rate scheme limits and percentages have been re-calculated. There will be anti-avoidance legislation in place to cover the change in VAT rate.

Annual Investment Allowance
It was confirmed the £100,000 AIA will continue for year ended 5 April 2011 and year ended 5 April 2012 but will fall to £25,000 from 6 April 2012.

Changes after 5 April 2011

Child and Working Tax Credits
The income cap on claims is reduced from £50,000 to £40,000, the income disregard is reduced from ₤25,000 to £10,000, and the baby element is removed from the calculation of tax credits from 6 April 2011.

Income Tax
The personal tax allowance will increase to £7,475 for under 65s from 6 April 2011. The basic rate tax threshold will be reduced to offset this increase so that higher rate taxpayers do not benefit from the increased tax allowance.

National Insurance
The proposals to increase employee NI contributions from 2011/12 from 11% to 12% for all employees earning over the primary threshold and from 1% to 2% for those earning over the upper earnings limit have been retained. For employers, the NI rate is increased from 12.8% to 13.8% from 6 April 2011, but the level at which employers contributions start will increase by £21 a week. The Self Employed Class 4 NI rate is increased from 8% to 9% from 6 April 2011.
Businesses outside of London and the South East can claim a reduction in Employer’s NI Contributions of up to £5,000 for the each of the first 10 employees engaged in a new economic activity.

Corporation Tax
The small companies rate is to be reduced from 21% to 20% from 6 April 2011 (profits to £300,000) and the main rate is reduced from 28% to 27%. The main corporation tax rate will continue to decrease by 1% a year until the rate is 24% by 2014/15.

Pension Contributions – Higher Earners
It is likely the Finance Act 2010 legislation restricting tax relief will be repealed and be replaced with similar legislation from 6 April 2011.

 

Sheppards Trade Name

Please note we are now trading only under the name of Sheppards, not Sheppard Walbridge.