What you need to know about the 2012 Budget
This week saw the budget for 2012 revealed, harkening in some new changes for the financial year that will affect everybody.
For those looking to buy a home in the next year, the richer will actually find themselves in more financial difficulty than those looking for more modest properties, or trying to take out contractor mortgages. Stamp Duty Land Tax has now been raised to 7% for those looking to buy properties with a value of over £2 million, and 15% for companies trying to buy residential properties for commercial means. In both cases this only stands for expensive properties over £2 million in value, meaning those looking for cheaper properties will be largely unaffected.
Income tax at the top rate is to be decreased from 50p to 45p as of April 2013, and the point at which people need to start paying income tax has been increased to £9,205 from April next year. This is good news for those on low incomes and contractors as it should bring down the amount of tax they need to pay each year. It is worth bearing in mind, though, that the basic rate threshold is also due to be lowered by more than £2000 which means the £170 saving predicted by the government will not be given to everyone, and higher rate taxpayers may not benefit at all. 300,000 extra basic rate taxpayers are predicted to fall into the 40% income tax bracket as the threshold is lowered from £42,475 to £41,450.
The budget also announced that corporation tax is due to be decreased by 1% yearly on a sliding scale, meaning it will drop to 24% this April and will be down to 22% by 2014.
Overall, the budget has proved a lot less worrisome to those on lower incomes than previously expected, and should not drastically affect those that fall within the higher wage bracket either. The biggest change in the budget this year seems to be the far higher rate of stamp duty for those looking to buy high value properties either personally or for business, but the government has explained this as a way to stop people using their companies to buy a residential property, effectively swallowing some of the tax costs and getting high value properties for less tax than those buying far cheaper properties.
Article by: Steve Lambert, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager.
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