The Chancellor of the Exchequer, George Osborne, has delivered his Budget statement today 22nd June 2010.
Employers
The Budget includes the following proposals for employers:
Income Tax
The personal allowance for under 65s will be increased by £1,000 in April 2011, with gains limited to basic rate taxpayers.
National Insurance
Reducing national insurance making it cheaper for companies to employ people. The threshold at which employers start to pay National Insurance will be raised by £21 per week above indexation in April 2011.
A new tax scheme to help create new jobs in parts of Britain outside of the South East by exempting new businesses from up to £5,000 of employer National Insurance Contributions payments for each of the first 10 employees hired.
Enterprise
The Chancellor said a long-lasting economic recovery must have its foundations in the private sector, not the public sector, and businesses across all regions need the right conditions to be able to grow.
The Budget announces the following proposals for enterprise and growth:
A reduction in corporation tax from 28 to 24 per cent over the course of four financial years from April 2011.
A reduction in the small profits rate of corporation tax to 20 per cent from April 2011, instead of the previously planned increase to 22 per cent.
An increase in Capital Gains Tax from 18 to 28 per cent for higher rate taxpayers, whilst the entrepreneur relief life time limit increases from £2 million to £5 million.
To ensure that more small firms have access to credit, the Enterprise Finance Guarantee (EFG) will be improved by £200 million to support £700 million of additional lending until 31 March 2011. The EFG supports lending to small businesses that have difficulties accessing normal commercial loans.
VAT
VAT will increase from 17.5 per cent to 20 per cent from 4 January 2011. Items such as food, children’s clothes and books will remain zero-rated.