UK Budget Delivers Tax Changes
March 21, 2012 Taxation in UK
LONDON – The latest budget plan of the UK government has been unveiled, outlining several tax changes and new economic policies aimed at reducing the country’s debts by increasing tax revenues and lowering government spending.
The Chancellor of the Exchequer George Osborne delivered the latest budget plan of the government of the UK at the House of Commons on March 21st, saying that, “…this country borrowed its way into trouble. Now we’re going to earn our way out,” and he also added that in 2012 the UK will concentrate on creating “a fairer, more efficient and simpler tax system”.
In an effort boost the international competitiveness of the UK tax system, the government will lower the national corporate tax rate by 1 percent every year from April 2012, until April 2014 when the rate drops to 22 percent.
The government will also introduce a tax credit for businesses carrying out scientific and engineering research and those involved in the development of new innovative technologies in the UK.
Reviews will also be launched by the Office of Tax Simplification on the rules for taxation of small businesses.
The government will ease the tax burdens placed on the country’s lowest and highest earners, dropping the top tax rate on personal incomes from 50 percent to 45 percent, and raising the personal tax allowance level from GBP 8 105 to GBP 9 205.
In an effort to balance out the funds lost due the tax cuts, a 7 percent stamp duty on properties valued at over GBP 2 million will be introduced. Child benefits will be gradually reduced for households where any individual earns more than GBP 50 thousand.
The government will also initiate public consultation on the subject of tax evasion, to ascertain the feasibility of implementing new measures against tax dodgers.
Photo by HM Treasury