The Budget headlines in less than 140 words:

Subscribers: click here for your summary.

Freeview: much of the 2011 Finance Bill has already been announced (changes to allowances, furnished holiday letting etc), further new measures include:

  • Main Corporation tax rate down to 26% (small company rate is 21%).
  • 43 complex tax reliefs abolished.
  • CGT: annual allowance increases to £10,600, Entrepreneurs' Relief to £10 million.
  • EIS relief to increases to 30% in 2011 whilst doubling annual investment limits in 2012.
  • 21 new Enterprise Zones, relaxation on planning, increases in renovation allowances.
  • Small company R & D relief doubled.
  • Capital allowances: short-life assets cut off increased to 8 years.
  • Approved mileage allowances up to 45p/mile, volunteer drivers may claim actual expenses.
  • VAT: changes to registration/deregistration thresholds.
  • More incentives for green energy.
  • A review and crack down on SDLT, CGT and income tax avoidance.
  • Individuals: the 50% tax rate not be made permanent.
  • Long term resident non-doms face a £50k tax charge with relaxation in tax rules for bringing capital into the UK, a statutory non-residence test to be introduced.
  • The Personal allowance rises from £7,475 to £8,015 in 2012.
  • Charities: a big shake up to make Gift Aid easier to administer. The maximum Gift Aid benefit limit increases to £2,500.
  • IHT (from 2012): donate 10% to charity and your IHT rate decreases by 10% too (that means 40% falls to 36%).

Other measures:
Reform of NICs

There will be a consultation on alignment of National Insurance with income tax. It may be some years before actual alignment can be achieved.

Follow the links in our Finance Act Planner for 2011/12 details of key SME measures.