click
here
to access our tax data information page
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. For the amended rates on
users of the VAT Flat Rate Scheme follow this link:
http://www.hmrc.gov.uk/pbr2009/pbrn33.pdf
-
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/
-
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has been withdrawn for earned and pension income but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
proposed annual
increase of 1% in the small company rate of corporation
from the current 21% to 22% from 1st
April 2010 has been deferred again for one year and will
not take effect now until 1st April 2011.
- the
trading loss carry back rules are to be extended for
a two year period,
for Corporation Tax accounts ending between 24/11/08
and 23/11/10 and Income Tax accounts ending in
2008/9 and 2009/10, 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. For one year from April 2009 a
temporary 40% first year allowance will be available
for expenditure in excess of the £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.
- phasing
out of Agricultural and Industrial Buildings
Allowances and new rules on integral fixtures.
- support
for businesses struggling to meet future tax
liabilities or obtain finance remains in operation.
In early
2008 H M Revenue
and customs lost their appeal to the House of Lords.
This was welcome news for husband and wife companies
following which new proposed legislation was issued for
consultation with a view to becoming law from 6th
April 2008, aimed at tackling so called income
shifting within members of small family businesses.
After an original 12 month delay it has now been announced that
legislation will not be included within Finance Act
2009 but that the Government will keep the issue
under review.
New CGT regime for individuals
From
6th April 2008 a there is a
new main rate of CGT of 18%, plus Taper and
Indexation relief has been abolished. A
new entrepreneurs relief designed to reduce
the effective rate to 10% for the first £1
million of lifetime gains on the sale of all
or part of a business has been
introduced. The relief is subject to many
exclusions and careful planning is required.
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.
From 1st April 2010,
businesses with an annual
turnover of over £100,000
and all newly registered VAT
businesses will be required
to file their VAT returns
online and make payments
electronically.
