One thing you can’t fault the current chancellor on is transparency. We know when the next budget is going to be and, painful though it is, the CSR gave us quite a lot of information about what the future holds in store for the country.
The personal tax details for 2011/12 have now been released. Some of the key points:
- The personal tax allowance will rise by £1000 to £7,475.
- The higher allowance for those aged 65-74 and aged 75 or more will both go up by £450 to £9,940 and £10,090 – though only if your income is less than £24,000 (up from £22,900 last year). Over this the higher allowance tapers back down to the standard.
- Higher rate tax will begin to be paid on annual incomes above £42,475 which is £1,400 less than the limit this year (£43,875). Therefore higher rate tax payers will not gain from the £1k rise in the personal tax allowance.
- The 50% rate remains at £150,000 and the income at which the personal allowance begins to be clawed back remains at £100,000. Anyone with an income between £100,000 and of £114,950 – when personal allowance disappears altogether – will be paying an effective marginal rate of tax of 60% on some of their income.
Tax returns for last year will be due in January. If you need assitance in preparing your return, please contact James Odds on 01923 20 20 20.