Pre Budget Report 2009

Today’s statement by Alistair Darling was arguably more of a pre-election manifesto than announcing any moves to aid the economic recovery.  However, here is the good and bad news for small businesses:

Good News

  • Small company tax rate to remain at 21% rather than increase to the previously announced 22%.
  • The tax payment service enabling struggling businesses to spread payment of their tax bills is being extended.
  • No changes to the capital gains tax rates (suprisingly).
  • Various minor tax breaks for electric cars and vans.

Bad News

  • National Insurance is increasing by 1% from April 2011 (a 0.5% increase had previously been announced).  This affects employees, employers and the self-employed where earnings exceed £20k pa.
  • The rate of VAT will revert to 17.5% on 1 January 2010.  The Flat Rate percentages will also increase by varying amounts.
  • A 50% supertax will be charged on bank bonuses in excess of £25k per employe (some may argue this should be a Good News item!).
  • Company cars will become slightly more expensive as the benefit bands have been shifted down by 5g/km of Co2.
  • The stamp duty exemption on the purchase of most residential properties has been reduced from £175k to £125k.
  • A telephone landline tax of 50p per month per line is being introduced from 1 October 2010 to pay for faster broadband speeds.

Further details on the less common taxes can be found here and changes announced in the April 2009 Budget can be found here.

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