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click
here
to access our tax data information page
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Budget and
Pre Budget reports |
| Main items
of interest to the majority of small businesses will
be: |
| - The
standard rate of VAT that reduced by 2.5% to 15%
on 1st December 2008 will revert back to
17.5% on 1st January 2010 (see Emergency budget
below regarding the further increase in 2011). For the amended
2010 rates on
users of the VAT Flat Rate Scheme follow this link:
http://www.hmrc.gov.uk/pbr2009/pbrn33.pdf |
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Inheritance Tax rules to transfer to
a surviving spouse any unused nil rate band. However
the planned increase in the £325,000 threshold from
April 2010 has been cancelled.
http://www.hmrc.gov.uk/inheritancetax/ |
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Personal allowances and national insurance rates, please follow tax data information link
above. |
| - The 10% tax band
has been withdrawn for earned and pension income but
remains for savings and dividends. |
| - The
trading loss carry back rules are to be extended for
a further year,
for Corporation Tax accounts ending between 24/11/08
and 23/11/11 and Income Tax accounts ending in
2008/9, 2009/10 and 2010/11, by allowing the loss carry back to three
years. The amount to be carried back under the new
provision is capped though at £50,000 . |
| - First year
capital allowance rate of 50% on plant and machinery
was replaced from April 2008 with a 100%
annual investment allowance of £50,000, this has
increased to £100,000 from April 2010. For one year from April 2009 a
temporary 40% first year allowance will be available
for expenditure in excess of that years £50,000 AIA limit. |
| - Class I
and Class IV NIC to be increased by 0.5% from April
2011 with a further 0.5% increase from April 2012
with the starting rate aligned with the income
tax personal allowance. |
| - VAT
registration limit increased to £70,000 from April
2010. |
| - Support
for businesses struggling to meet future tax
liabilities or obtain finance remains in operation. |
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http://www.hmrc.gov.uk/pbr2008/business-payment.htm |
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Emergency Budget summary |
| - Personal
Allowance for individuals under 65 to increase by
£1,000 to £7,475 in 2011/12. |
| - Capital
Gains tax changes, see CGT paragraph below. |
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Changes in tax credits announced. From April
2011 the income disregard will be reduced to
£10,000 from £25,000, tax credits
eligibility will now reduce for families
with over £40,000 household income from the
current £50,000 figure, plus the withdrawal
rate will increase to 41%. |
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VAT to increase to a rate of 20% from 4th
January 2011, plus resulting increase in
flat rate scheme rates. |
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Small company corporation tax rate to reduce
to 20% from April 2011, the main rate is to
reduce 1% each year from the current 28% to
27% in April 2011 through to 24% in April
2014. |
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Capital Allowance rates to reduce from April
2012. |
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Special Furnished Holiday Lettings rules
previously announced to be abolished from
April 2010 are now to be reinstated, instead
there will be consultations aimed at new
changes from April 2011. |
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Regional Employer NIC's holiday for new
businesses starting after 22nd June 2010, to
include the South West. |
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For more detail on the above visit
http://www.hmrc.gov.uk/budget2010/index.htm |
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New CGT regime rules |
| From
6th April 2008 there was a
new main rate of CGT announced of 18%, plus Taper and
Indexation relief has been abolished. This
rate may increase to 28% on gains after 22nd
June 2010 dependant on income. A
new entrepreneurs relief to reduce
the rate to 10% for the first £1
million of lifetime gains on the sale of all
or part of a business was
introduced, this was increased to
£2 million from April 2010 and now £5 million
from 22nd June 2010. The relief is subject to many
exclusions and careful planning is required. See
the budget 2010 link above for the June 2010
changes plus other guidance below: |
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http://www.hmrc.gov.uk/cgt/index.htm#1 |
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CIS scheme update |
| The new CIS
scheme, in operation since April 2007,
contains many penalties and risks to Contractors.
For more information on how the scheme works, click on the link below for HM Revenue
Customs guidance but preferably please contact us
for a more detailed explanation. Beware of H M Revenue interpretation on self employed
status, it is not law and incorrect, there have been
many tax cases on this issue in the last couple of
years which detail the current law. Also, care must
be taken to ensure gross payment status is not lost
through late payments of tax. |
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http://www.hmrc.gov.uk/cis/ |
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Information: |
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Budget and Pre Budget reports.
Emergency Budget
summary.
New Capital Gains tax
rules.
CIS scheme.
New HMRC penalty
changes.
Compulsory VAT
online filing from April 2010.
More Info
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