Budget 2009 - 10 |
| SUMMARY |
|
Personal allowances incrementally removed where income is
over £100,000 and new 50% tax for earnings over £150,000.
10% rate band disappears.
Capital allowances at 20% (rather than 25%) but £50,000 initial
allowance. |
VAT reduced to 15% for 13 months from 1st December 2008 (tobacco,
fuel and alcohol duties raised to neutralise this).
All National Insurance Contributions to increase by 0.5% from
April 2011.
Corporation tax rate remains at 21%. |
ALLOWANCES |
| Personal allowance |
£6,475 (increase of £440) |
| Lower age (under 75) allowance |
£9,490 (increase of £460) |
| Upper age allowance |
£9,640 (increase of £460) |
| Allowances given at 10% (for elderly married couples
only) |
| Minimum married couple's allowance |
£2,670 (income limit £22,900) |
| Lower / Upper married allowance |
£6,865 / £6,965 (age over 75) |
TAX RATE BANDS (increased with inflation) |
| £0 - £2,440 |
10% savings rate only |
| £0 - £37,400 |
20% |
| over £37,400 |
40% |
From 6th April 2008 the 10% rate band will disappear
(on earned and pension income) and the basic rate will reduce
to 20%.
Strangely, the 10% rate band will remain for savings income.
|
ISAs The amount you can invest in an ISA increases
to £10,200 of which half can be in a cash ISA. |
NATIONAL INSURANCE |
Lower earnings limit for employees becomes £95
per week - upper earnings limit £844 per week in April 2009.
Lower limit for self-employed profits £5,715 - upper limit £43,875
taxed at 8% (class 4 NIC) 1% thereafter.
Self-employed class 2 (usually direct debited) £2.40 per week.
|
CORPORATION TAX |
The small company rate of Corporation Tax remains
at 21% (the increase to 22% has been postponed).
The new laws to combat what the Inland Revenue see as "income
shifting" have been shelved.
It is still advantageous to trade as a limited company because
the 21% rate in 2009/10 is lower than the income tax 20% plus
8% NI rate for self-employed.
Company vans with any private use suffer
a £3,000 scale charge.
Dividends are deemed to have suffered tax at 10% and are taxable
at that rate for basic rate taxpayers.
Higher rate taxpayers suffer an additional 22.5% tax on dividend
income.
Entrepreneurs relief has been brought in to effectively reduce
capital gains tax on business assets to 10% (as with taper relief).
|
CAPITAL ALLOWANCES
The first year allowance for capital expenditure below £50,000
is 100%, but the writing down allowance will decrease from 25%
to 20%. Pools up to £1,000 may be w/o. |
CAPITAL GAINS TAX Exempt limit £10,100. Flat rate 18%
thereafter. |
VALUE ADDED TAX Registration threshold £68,000 sales
p.a. |
VEHICLE TAX for high fuel consumption vehicles will
increase.
Vehicle tax for economic ("green") vehicles will reduce. |
INHERITANCE TAX at 40% on estates valued at over £325,000
at the date of death - increasing to £350,000 by 2010/11.
Widows/(ers) can use the (current) unused exempt band from pre-deceased
spouse (or partner). |
