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Wednesday, 3 October 2023

Budget 2011 - how does it affect you?

Key announcements in the 2011 Budget include £250 million to help first-time buyers buy a new-build property and an increase in the amount you can earn before you pay Income Tax. Read on for details of what was announced in the 2011 Budget and how the Budget may affect you.

Tax changes

Personal Allowances for under-65s will rise to £8,105 in April 2012

  • Personal Allowances (the amount you can earn before you pay tax) for under 65s will rise to £8,105 in April 2012, up from £6,475 at present
  • Inheritance Tax will be reduced by 10 per cent if you leave 10 per cent or more of your estate to charity
  • a consultation on combining Income Tax and National Insurance will be launched
  • non-domiciles who have lived in the UK for 12 years or more will be charged £50,000

Benefits and tax credits

  • welfare payments will rise in line with the Consumer Price Index (CPI) rather than the Retail Price Index (RPI)
  • Child Tax Credit for lower income families will increase by £255

Motoring and travel

£100 million is being made available to local authorities to fix potholes

  • fuel duty will be cut by 1p per litre from 6.00 pm on Wednesday, 23 March
  • the April 2011 inflation-only increase in fuel duty will be put back to 1 January 2012; the April 2012 increase will be introduced on 1 August 2023
  • £100 million will be made available to local authorities to fix potholes caused by the severe winter weather
  • Vehicle Excise Duty will increase by inflation only (HGV vehicles will be exempt)
  • Authorised Mileage Allowance Payments (the amount employees can claim for using their cars for business) will be increased from 40p to 45p per mile

Alcohol and tobacco

  • duty on low-alcohol beer will be cut in half, while being raised on stronger beers
  • tobacco duty will be increased by 2 per cent above inflation

Housing

  • £250 million will be made available to help first-time buyers buy a new-build property
  • homeowners facing difficulties will get extra help through the extension of the temporary changes to the Support for Mortgage Interest Scheme for another year
  • targets on the use of previously developed land will be removed

Pensions and savings

  • a new flat-rate contribution-based State Pension has been proposed, worth around £140 a week – the new system will not apply to current pensioners
  • the Chancellor has accepted the findings of the Hutton Report into public sector payments, which will form the basis of a consultation with workers and unions
  • the government wants future changes to the State Pension age to be decided by a new, more automatic and independent mechanism

Employment

  • 80,000 work experience places for young people will be created
  • up to 50,000 apprenticeships will be created

The economy

  • economic growth is forecast at 1.7 per cent this year
  • 21 new Enterprise Zones will be created to focus growth in specific parts of the UK - the first ten of these will be in; Birmingham and Solihull, Leeds, Liverpool, Greater Manchester, The Tees Valley, Tyneside, The Bristol area, The Black Country, Derbyshire and Nottinghamshire, and Sheffield
  • the main rate of Corporation Tax will be cut by 2 per cent to 26 per cent from April 2011, with further yearly reductions of 1 per cent for the next three years
  • planning laws will be changed to prioritise growth and jobs

The environment

  • controls on greenbelt land will be maintained, but nationally imposed targets on the use of previously developed land will be removed
  • the Climate Change Levy discount will be increased for those who have signed up from 65 per cent to 80 per cent
  • an extra £2 billion will be invested by the government in the Green investment bank, created to support investment in low-carbon infrastructure projects

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