March Budget 2010
The key budget announcements follow, we can of course expect another post election budget when more significant changes may be made such as the much vaunted increase in VAT:
For business
- The Annual Investment Allowance (AIA) will be increased to £100k pa for expenditure incurred on or after 1 April 2010 (companies) and 6 April 2010 (unincorporated businesses).
- No changes have been made to the main and small companies’ rates of corporation tax which for 2010 remain at 28% and 21% respectively.
- A 100% first year allowance will be available for new zero-emission goods vehicles for a five year period from 1 April 2010 (companies) and 6 April 2010 (unincorporated businesses)..
- Business rates cut for one year from October meaning a tax reduction for more than 1/2 million small businesses in England and 345,000 will pay no business rates at all.
For individuals
- The lifetime allowance for entrepreneurs’ relief has been increased to £2m and may be claimed for disposals made on or after 6 April 2010. Capital gains tax rate remains at 18%.
- No further changes were made to income tax or NI rates beyond those announced in the Pre-Budget Report. A summary of tax rates and allowances can be found at www.hmrc.gov.uk/budget2010/pn02.pdf
- Relief from stamp duty land tax is available for first time buyers on residential properties up to £250k. This applies for purchases completed between 25 March 2010 and 25 March 2012.
- Stamp duty land tax will be payable at 5% on residential properties over £1m for completions on or after 6 April 2011.
- The IHT nil rate band will now be frozen at £325k for four years (until 2014/15).
- The car scale benefit rates for very low CO2 emission vehicles will be reduced to 5% for cars or vans with emissions of less than 75g per km and nil for vehicles which produce no CO2.
Other measures
- Above inflation increases in alcohol and tobacco
- A phased increase in fuel duty of 1p in April, October and January
- A £35 million university enterprise capital fund, to provide direct support for university innovation and spin-out companies.
- Additional £84 million for repair of local and regional roads damaged by recent adverse weather and £250m investment to improve the motorway network.
- From this April, a new 50 per cent rate of tax will apply to incomes above £150k and from April 2011 tax relief on pension contributions will be restricted for those incomes of £150k and over.
- Employee, employer and self-employed rates of National Insurance contributions will increase by one per cent from April 2011. However, the 15 million people on incomes below £20k will not pay any extra National Insurance contributions.
- Personalised Services for Start-ups and SMEs through Businesslink.gov.uk – By autumn 2011, a new personalised area for start ups will provide easy access to enhanced guidance and tools to help businesses find the support they need when setting up including an HMRC tax registration ‘wizard’ that enables registration for multiple taxes, online services and payment plans using a single interactive online form.
- A tax incentive for the UK video games industry, following consultation and approval from the European Commission
This budget is a short term measure in view of the forthcoming election and there are likely to be more significant measures made in the post election budget, both in tax avoidance, reduced public expenditure and increased taxes.
We hope you find the contents of this blog useful, you should of course always seek professional advice for your specific needs. Alastair Wood, AW Accounting – Accountants who “speak your language”
