Budget Summary 2011 Introduction Income Tax Tax Credits and Benefits National Insurance Employees Savings and Investment Capital Gains Tax Inheritance Tax Corporation Tax Business Tax Value Added Tax Stamp Duty Land Tax Other Measures Income Tax Rates and Allowances National Insurance Contributions

Other Measures Business rates holiday The small business rate relief holiday was due to end later this year. It has been extended by a further year from 1 October 2011. Penalties for late filing and payment New penalties for late filing of returns and late payment of tax come into force with effect from 6 April 2011 in respect of 2010/11 tax returns. The long-standing £100 penalty for late submission of a self-assessment tax return continues, but it will no longer be limited to the amount of tax outstanding for the year. The tactic of paying a generous estimate of the liability, and obtaining a repayment later when the return is ready, will no longer save the £100. Further automatic penalties will apply if the return is three months late. Tax Trap The new penalties are harsher – take care to avoid them. Time to pay The Business Payment Support Service was introduced in 2008 to allow viable businesses time to pay their tax liabilities and to reduce the likelihood that HMRC will bring the business down by insisting on payment. Although it has been modified since its introduction (applications relating to liabilities of over £1m must be supported by an accountancy report), the Budget confirmed that the BPSS will continue for the foreseeable future. If a time to pay arrangement has been agreed by BPSS, penalties for late payment will not apply. Anti-avoidance As usual, the Chancellor announced that a number of tax loopholes were being closed, and he put a figure of £1bn on the combined effect of closing them. It is never clear whether such results are really enjoyed by HMRC or whether the planners move their efforts elsewhere instead. Schemes involving the avoidance of Stamp Duty Land Tax through sub-sales and alternative finance products are among those being targeted. Bank levy The bank levy has been introduced this year to raise extra taxes from banks. It is supposed to be related to the riskiness of the bank's operations so that the behaviour that is thought to have created the credit crisis is discouraged. It will be increased over the next few years to claw back the reduction in tax that banks will enjoy because of the lowering of the corporation tax rate. Abolition of reliefs Mr Osborne established the Office of Tax Simplification to examine ways of reducing the mass of tax legislation. The first impact of their work is the announcement in this Budget that 43 tax reliefs are likely to be abolished over the next year - the abolition of reliefs may seem an unfavourable place to start, but these are reliefs which are hardly used, obsolete or poorly targeted, so it is unlikely that they will be missed. For example, it has been possible since 1947 to receive luncheon vouchers worth 15p each day without incurring a tax liability - or, in recent years, buying much food. Collecting tins From April 2013, charities will be entitled to claim a Gift Aid rebate on donations of up to £10 each (total £5,000pa) without obtaining a declaration from the donor. A number of conditions will apply, but will effectively allow a charity to claim a top-up payment for a street collection. By contrast, the facility for donating a tax repayment directly from a self-assessment tax return ("SA donate") will be withdrawn from 2011/12 - it has not been well used and is complex to administer.