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24th March 2010 BUDGET PROPOSALS |
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1.1 The basic rate remains at 20%. 1.2 The higher rate remains at 40%, with the threshold unchanged at £37,400. 1.3 From 2010/2011 there will be an additional higher rate of 50% for taxable income above £150,000. 1.4 A Bank Payroll Tax rate of 50% on bonuses paid by banks of more than £25,000 came into force on 9th December 2009. This is charged on the bank rather than the individual. 1.5 The tax rate for investment income (other than dividends) remains at 20%, but the 10% lower rate band is available for savings income only, up to a limit of £2,440, if not already utilised by earned income and pensions. The higher rate and additional rate for savings are at 40% and 50% of the grossed up income. 1.6 The tax credit on dividends remains at 10% and this is not repayable. As before, no additional tax is payable where taxable income is below the higher rate threshold. The higher rate on dividends remains at 32.5% of the grossed up income (equivalent to 25% of the net dividend). From 2010/2011 the additional rate on dividends will be at 42.5% of the grossed up income (equivalent to 36.11% of the net dividend) for taxable income above £150,000. 1.7 Personal allowances
The age allowances abate by £1 for every £2 of income over £22,900 until they are reduced to the basic allowances. This level is reached at incomes from £28,930 for single people aged 65 to 74 to £37,820 for married people aged 75 and over. From 2010/2011 the basic personal allowance for individuals will be reduced by £1 for every £2 above an adjusted net income above £100,000. The personal allowance will be reduced to nil for incomes of £112,950 and above. 1.8 Child Tax Credit 1.9 Car and fuel benefits 1.10 Van benefits. The benefit charge for unrestricted private use of employer provided vans remains at £3,000, with an additional £550 if the employer also provides fuel for private use (increased from £500). 1.11 Authorised Mileage Rates 1.12 From 2007/2008 tax returns for individuals, trusts and partnerships have two separate filing deadline dates. Paper returns are to be filed by 31st October and for returns filed online the date will remain at 31st January. From 2010/2011 a £100 fixed penalty will be imposed for the late submission of returns, regardless of the level of tax liability. 1.13 From 2007/2008 the “enquiry window” for income tax returns ends 12 months after the filing of the return, rather than the anniversary of the filing deadline. This also applies to Corporation Tax returns for accounting periods ending after 31st March 2008. |

