Wednesday, 23 March 2011

UK Budget 2011

From a Spanish perspective

There are many expats, especially pensioners and expat workers who have a close vested interest in the UK Budget. There will be much more analysis over the coming days but I thought an outline summary would help. It is not likely to be a very detailed, as George Osborne’s first Budget was only in June with an Autumn Statement last November.

If you would like a professional analysis from UK economists please email me and I’ll give you the link.

  • Personal Allowances for income tax are increasing in line with the Lib Dem manifesto and the Coalition agreement in 2011/12 the allowance will be £7,475 and in 2012/13 will rise to £ 8,105. This is the amount anyone (UK taxpayer) can earn before paying any tax.

  • Corporation Tax on company profits to be cut by 2% to 26% and will be down to 23% over the next three years. This highlights what the Chancellor calls .Britain open for business’. Though unlikely to affect Spanish residents directly, it could encourage UK companies to expand….into Spain?

  • UK to adopt a single-tier rate of Retirement Pension of £140 per week, to replace all of the confusing ‘add-ons’. No date has yet been fixed for this proposal. On this one, the devil will be very much in the detail!

  • The proposed Air Passenger Duty increase from April has been delayed, until 2012 which is temporary relief for the travel industry. Those of us who travel regularly will welcome that one.

  • The fuel duty ‘escalator’ has been scrapped along with the planned increase of 4p per litre. Instead the level of duty is reduced by 1p per litre, with immediate effect. If you ever do much driving in the UK then that will be welcome, but the ‘pump’ price is likely to be about 15% higher than in Spain.

  • The Chancellor also announced a ‘fair fuel stabiliser’ to reduce fuel duty when the cost of fuel rises with the opposite happening if fuel costs ever fall! The details will be available later.

There are many other facets to the Budget but I wanted to publish the key details quickly. If any other factors come to light, later, I will produce an update. It could be worth putting this in your favourites and checking.

If you have any specific queries, please email me.