The key points to note for 2011/12 are:
Income tax
· The personal tax allowance will rise by £1,000 to £7,475.
· The higher allowance for those aged 65–74 and aged 75-plus will each go up by £450, to £9,940 and £10,090.
· The income threshold above which age allowance is tapered will be £24,000 (up from £22,900 in 20010/11).
· The higher rate income tax threshold will be £35,000 (compared to £37,400 in 2010/11)). The intention is that higher rate tax payers will not gain from the £1,000 rise in the personal tax allowance.
· The threshold for the additional (50%) rate of income tax stays at £150,000.
· The income at which the personal allowance begins to be clawed back remains at £100,000.
· The 10% starting rate band for savings income will be £2,560.
National Insurance
· The lower earnings limit for Class 1 NICs will be £102 per week.
· The primary threshold will be £139 per week.
· The secondary threshold for employer’s Class 1 NICs will be £817 per week.
· Class 2 NICs rate will be £2.50 per week.
· The small earnings exception for Class 2 will be £5,315.
· Class 4 NICs will be due at 9% on annual profits between £7,225 and £42,475, and 2% above that.
Tax credits
· Most tax credit elements have been indexed up by the CPI.
· The basic element and 30-hour elements of WTC remain at £1,920 and £790 (as announced in the Comprehensive Spending Review (CSR) in October 2010).
· The child element of CTC has been given an extra hike to £2,555 (this and the following three changes were announced in June).
· The income disregard will be £10,000 (down from £25,000 in 2010/11).
· The second income threshold for withdrawing tax credits will be £40,000 (down from £50,000) and the taper rate for withdrawing credits will be 41% (in place of the current first and second withdrawal rates of 39% and 6.67% respectively).
· The baby element of CTC will be withdrawn.
· The childcare element of WTC will be given at 70% of eligible costs (down from 80%) (as announced in the CSR).
Individual Savings Accounts (ISAs)
· The overall investment limit is confirmed as £10,680.
· Of which up to £5,340 can be in cash.
The full tables are on the HM Treasury website http://www.hm-treasury.gov.uk/d/rates_thresholds_tables.pdf
