Free Tax Rates Guide 2012-13 and Budget 2012 Tax & VAT Analysis

Mitchell Charlesworth are pleased to provide you with this Tax Rates Guide for 2012/13 which you can print, download and share.

Below you can also find a brief outline of some of the key Tax and VAT changes arising out of the Budget 2012.

The Devil is in The Detail...

When it comes to Tax and VAT changes in the Chancellor's Budget, the devil is often in the detail and not necessarily the main 'headline-grabbing' announcements. Now that the dust has settled on this year's Budget, our tax experts outline the key Tax and VAT points that you may have missed:


Tax Rates Guide 2012-13

1. Corporation Tax:

Chancellor George Osborne announced that Corporation Tax would reduce from 26% to 24% from 1st April 2012 with a further reduction to 22% from April 2014. This will definitely help the competitive position of the UK economy. Smaller companies will be disappointed that the small companies tax rate remained unchanged and that National Insurance was not altered to help ease the burden of employing people.

2. General Anti Avoidance Rule (GAAR):

HMRC will consult over the summer with a view to introducing legislation in 2013. The GAAR will be targeted at artificial and abusive tax avoidance schemes. These rules will be welcome provided that they do not impact on good, bespoke business and tax advice going forward. It is also important that the new measures are appropriate in scope so as not to hinder commercial transactions and do not have the wider affect of reducing UK competitiveness.

3. Enterprise Investment Scheme & Venture Capital Trusts:

With reference to the Enterprise Investment Scheme and Venture Capital Trusts, measures will be introduced to remove some of the restrictions on qualifying shares and types of investor and increase some limits on investment.

4. Employee Share Schemes:

The limit on qualifying options under the Enterprise Management Scheme will be increased together with a proposal to look at how Entrepreneurs Relief is applied following the disposal of option shares. A review is to be undertaken on tax advantaged employee share schemes generally.

5. Sundry Tax Measures:

  • HMRC intend to place a cap on unlimited income tax reliefs.
  • The statutory residence test will be introduced with effect from 6th April 2013.
  • HMRC will consult on simplifying the Inheritance Tax regime for trusts.
  • The IR35 provisions are likely to be strengthened although making them easier to understand at the same time.

Download, print and share your free Tax Rates Guide 2012/13 here.

Value Added Tax (VAT):

1. Cost-Sharing Exemption:

The Cost-Sharing exemption proposal was approved as planned. This will affect certain organisations such as; charities, universities, further education colleges, banks, housing associations, and insurance companies. Fundamentally, the cost-sharing exemption legislation will make the provision of services between certain organisations not subject to VAT, provided certain conditions are satisfied.

2. Low Value Consignment Relief Scrapped:

From 1st April 2012, Low Value Consignment Relief will no longer apply to goods imported to the UK from the Channel Islands. This will bring an end to the cheap imports of goods such as DVDs and Video Games, Cut Flowers and Greetings Cards.

3. Specific Sectors Affected by VAT Changes:

  • Fast Food & Hot Food Premises - The definition of "hot food" has been clarified such that, with the exception of freshly baked bread, all hot food is now subject to VAT.
  • Self-Storage Businesses - From 1st October 2012, all self-storage providers will now have to charge VAT.
  • Sports Nutrition Drinks - Any sports drinks that claim to enhance physical performance, improve recovery after exercise or build bulk will now be subject to VAT.
  • Hairdressers' (Chair Rental) - The rental of a chair by a salon to a hairdresser is to become taxable at the standard rate of VAT.
  • Builders and Developers (Listed Buildings) - All building materials and construction services supplied in the course of an approved alteration to a listed building will become subject to VAT. For developers, only buildings reconstructed from a shell will continue to benefit from the zero rate.
  • Sale of Holiday & Leisure Caravans - The sale of holiday caravans that have not been designed and constructed for continuous year round occupation will now be subject to VAT.

4. Important Reminder - 1st April 2012 - Online VAT Registration:

While not strictly related to the budget, please remember that from 1st April, all VAT-registered businesses in the UK will now have to submit their VAT returns online, and pay electronically.

Previously, only newly-registered businesses and those with turnovers of more than £100,000 had to submit their VAT online, as well as pay electronically. Anyone else could send HM Revenue & Customs (HMRC) a paper VAT return, but this will no longer be an option.

Download, print and share your free Tax Rates Guide 2012/13 here.

Budget Summary 2012:

Just in case you missed it last week, click here to download a detailed free Detailed Summary of the Budget 2012.

Further Information?

For more information about Mitchell Charlesworth's Tax and VAT services, contact our Tax Specialist Partners Tim Adcock or David Antonia on tel: 0151 255 2300 or email:

Post a comment

Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority for investment business