Emergency Budget 2010 - Tax rates
The Chancellor has announced a number of changes to the personal allowance, the basic rate limit for income tax and National Insurance thresholds, all to be effective from 2011/2012.
The personal allowance for those under the age of 65 will increase by £1,000 from £6,475 to £7,475.
The threshold for basic rate tax will be reduced. The effect of this will be that higher rate taxpayers will not benefit from the increase in personal allowance. We do not yet know what the basic rate threshold will be but the Chancellor has said that the detail will be released in September once the RPI is known.
The threshold at which employers will start to pay employers Class 1 NICs will be increased by an extra £21 per week above indexation.
At the stroke of midnight tonight, some changes will be introduced to capital gains tax:
The rate of capital gains tax for higher rate taxpayers will increase to 28% from the current 18%.
The rate of CGT for gains that qualify for entrepreneurs relief will remain at 10% and there will be an increase in the lifetime limit on gains that can qualify from £2m to £5m.
The individual's capital gains annual exemption will remain frozen at the 2010/11 level of £10,100.
