Crunch Accounting Review the 2011 Budget
Those changes affecting Crunch clients:-
1. Approved Mileage Allowance – The rate for the first 10,000 miles increases from 40p to 45p from 6 April 2011. The 25p rate for mileage in excess of 10,000 remains unchanged.
2. Reduced Childcare Relief for Higher Earners – Those who are higher rate or additional rate taxpayers and who join employer supported childcare schemes providing childcare vouchers or directly contracted childcare on or after 6 April 2011 will have the exempt limits reduced to £28 per week for higher rate taxpayers and £22 per week for additional rate taxpayers.
3. Personal Allowance and Basic Rate Tax Limit – The allowance increases from 6 April 2012 for those under 65 to £8,105 but the basic rate tax limit reduces to £34,370 (from £34,700).
4. CPI Indexation of National Insurance Contribution Rates, Limits and Thresholds – This will take effect from 6 April 2012. For Class 1 contributions it is the limits and not the rate that will change.
5. Entrepreneurs Relief – The lifetime limit is to be increased from £5m to £10m.
6. IR35 – No more news further to Office of Tax Simplification report published on 3 March 2011.
7. Capital Allowances – Extend the limit for capital allowances for short life assets from four to eight years.
8. Corporation Tax Rate – No further change for the Small Profits Rate (profits at a rate not exceeding £300,000) which reduces to 20% from 1 April 2011 following the last Budget. The reduction of 2% relates only to Main Rate of corporation tax.
We will get a more thorough analysis out in the next few days but as always you can contact your account manager or accountant if you are concerned about how these changes affect your company.
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