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Budget stuff  •  Business Services  •  Business Tax  •  IHT  •  Personal tax  •  Personal Taxation  •  Probate and Inheritance Tax  •  Taxation

Osborne’s Budget 2011 gives very little to individual tax payers

By RJP LLP on 23 March, 2011

Despite the economic climate, George Osborne’s first proper Budget appears to be giving at first glance, with no increase to income tax rates, a greater than expected increase to the personal allowance and emphasis on charitable giving.  But overall it is fiscally neutral and in reality he is not giving anything away.  He can’t afford to.

 
Positives for individual taxpayers are the 10% extension to Enterprise Investment Scheme (EIS) relief from 20% to 30%.  This means more people will be encouraged to make these investments because they are tax efficient, and so lessens the reliance of businesses upon banks and other lenders for finance.

 
The extension to the non-domiciled remittance tax charge seems harsh but again this is a necessary source of income.  We were not expecting a reduction to this levy and on reflection their decision to extend is not surprising.
The increase to mileage rates from 40 to 45p is good, but given that it hasn’t been increased for a decade and the high cost of running a car today, it’s actually a paltry amount.  It’s important to note that if you work for a company that pays less than the 45p business mileage for the first 10,000 miles travelled you re entitled to reclaim the difference on your annual tax return.

 
Changes to the gift aid regulations must be one element of Osborne’s Big Society plans and any simplification to the red tape involved for charities is good news.  Whilst the introduction of a reduction to inheritance tax (IHT) levels for people giving 10% of their estate to charity is a great idea, the reality is their tax will be reduced by just 4%.  Today anyone paying IHT really does so on a ‘voluntary’ basis because they have not undertaken any tax planning, so at this level is a 4% cut going to be a big incentive?  Perhaps not, but anyway a nice philanthropic gesture.

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