UK Budget 2012 – Not a lot for businesses!

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Today’s budget had little in it for businesses, other than what should hopefully put a little bit of spare cash in consumers pockets and get them spending more. Consumers having more free cash isn’t a bad stimulus to the economy, but some of the wealthiest people in the UK will also be getting tax cuts, although when they come to sell their houses they could be hit with higher stamp duty.

So what’s in the budget for you? Here’s a quick run down on what will affect your personal finances and the very little changes made for businesses.

Personal taxes

There’s good news for low income earners, although not for a year. Personal tax allowances are due to rise to £9205 (worth an extra £220 per year) but not until April 2013. However there is some good news, the personal allowance is due to rise from £7,475 to £8,105 this April as announced in the 2011 budget.

To balance this from 2013 more will pay the higher tax rate of 40% as the threshold is reduced from £42,475 to £41,450. For top rate tax payers the 50p tax bracket will be reduced to 45p again coming into effect in April 2013. However the government reckon the drop to 45p will only cost the country £100 million at most as top earners have been able to avoid tax through other measures.

There’s not such good news for pensioners, their allowances will be frozen until they’re in line with the personal tax allowance

Child benefit will be reduced by 1% for every £100 earned over £50,000 and means that once one parent earns £60,000 the benefit will be lost entirely.

If you’re a smoker then the budget will cost you an extra 5% above inflation from 6pm today. That’s about another 37p on a pack of twenty. There’s no change to alcohol duty rates, which means that they’ll continue to rise above the rate of inflation with an automatic 2% above the rate of inflation or more than 5p a pint.

In better news for business and individuals there will be no change in fuel duty. That’s a shame because there’s already a 3.02p per litre increase which will now still go ahead on the 1st of August increasing already sky high prices. Road tax will rise in line with inflation, but will be frozen for road hauliers.

Business Taxes

The main rate or corporation tax will be reduced by an additional 1%, so that the rate will reduce from 26% to 24% in April 2012, to 23% in April 2013 and will come down to 22% by April 2014.

Stamp Duty

From tomorrow a new stamp duty level of 7% will be levided for homes worth more than £2m. Any £2m or higher priced homes bought through companies will pay 15%.

9 Responses

  1. I think I heard them talk about changing the taxing system for businesses that earn above 77k,

    they are going to tax on turnover not profit, to make it easier on self assessment forms,

    But little extra information other than that was mentioned,

    Other forums are mentioning it is only for unincorporated businesses (sole traders),

    Has anyone else heard of this change ?.

  2. I note the Tamebay headline of “Not a lot for businesses” but when you examine the tax allowance and reporting changes for businesses with sub £77k turnover they are actually rather massive!

    This could have a huge impact on a lot of ebay sellers.

  3. I only mentioned what I heard on the live BBC2 transmission of the budget,

    Someone else mentioned on CH4 news that it was for businesses turning over up to 77K,

    I think it is definitely something that needs keeping an eye on,

    Does anyone have a simple breakdown of how they are likely to change the system ?.

  4. the only thing that is good for business is PROFIT everything else has a cost than needs to be avoided or made less

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