Budget Summary 2011


Income Tax

Tax Credits and Benefits

National Insurance


Savings and Investment

Capital Gains Tax

Inheritance Tax

Corporation Tax

Business Tax

Value Added Tax

Stamp Duty Land Tax

Other Measures

Income Tax Rates and Allowances

National Insurance Contributions


These days the government - Coalition or Labour - tends to consult about tax changes far more than in the past. It's harder for the Chancellor to spring surprises on Budget Day, because many of his measures are no longer secret. Even so, every Chancellor seems to relish the theatrical occasion and wants to pull a rabbit out of the hat. This time it was cuts to fuel duty, which allowed Mr Osborne to finish with the claim that he had put fuel into the tank of the UK economy. As he had started the speech by downgrading growth forecasts for 2011 and 2012, we can only hope that the engine doesn't stall.

The wealth of consultation and advance exposure has created a different problem - keeping track of what's being implemented when, and what's been discussed but rejected. Many important details are hidden in over 200 pages of explanation issued by HM Revenue & Customs and the Treasury after the Chancellor sat down. For the first time, these have been helpfully divided into things announced today to be implemented now; things announced in the past to be implemented now; and things announced now or earlier which are to be implemented later. There is also a sprinkling of things which are being abolished and things where the decision has been made not to make a change.

We have gone through the papers and sorted out the major points from the technical detail. This booklet summarises the significant issues and outlines their likely effect on the average taxpayer.

Significant points
  • Personal allowance increased by £1,000, but higher rate threshold lowered

  • Increases in NIC rates from April 2011 confirmed

  • Measures to tighten up rules on Employee Benefit Trusts

  • Changes to relief for pension contributions and taking pension benefits from April 2011 confirmed

  • Increase in Enterprise Investment Scheme relief from 20% to 30% from April 2011

  • Entrepreneurs' Relief lifetime limit increased from £5m to £10m from April 2011

  • Main corporation tax rate cut by 2% to 26% from 1 April 2011 (1% was expected); small profits rate cut by 1% to 20%

  • New Enterprise Zones created with relief for business rates and easier planning regulations

  • E-filing of corporation tax returns required from April 2011.