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Budget round-up 2011
The much talked about £140 flat-rate pension is in working progress as the Chancellor says the DWP are looking at it as an ‘option’ for future retirees. The reform would have to be cost neutral and will not affect current pensioners.
As previously reported, income tax allowance will increase by £630 in 2012, seeing personal income tax rise to £8,105.
Good news for charities – as the budget announces 10% discount for those who leave 10 per cent of their estate to charity.
HMRC has been asked to review the 50% flat rate income tax, as Chancellor announces it is ‘temporary’.
Government has announced plans to merge income tax and NI. However, national insurance will not be extended to pensioners. Obsorne said ‘the contracting out rebate will no longer be an issue.’ It is widely speculated that this merger will take time and the resource needs to be put in place to implement it.
Hutton’s recommendations, which include proposals for MPs, have been accepted. MPs pensions are to be reformed in line with Hutton’s proposals, as well as the much reported reform of the public sector pensions.
Alternative savings vehicles receive a tax boost. Osborne's latest budget is good news for management level employees with pension arrangements outside of company schemes.