2010 Budget Report, courtesy of Riz Akhtar of RA Accountants..

At this time of the year, my commentary normally starts with a paragraph titled “Winners” and “Losers” but this time I will title it “Losers” and “Big Losers”.

Considering the indebted nation the UK has become, it was disappointing to see the Chancellor claiming a victory of securing pennies to fill pot holes and no credible plan to fill the country’s financial black hole.

Well, I will still keep the tradition going, being British, however to a somewhat minimum and leave the rest for you to read between the lines.

This report focuses on some of the tax changes we can now expect. We will also have further changes to deal with after the election.

WINNERS

No stamp duty for first time buyers up to property value £250,000.

Low income families with children aged one or two are to get a £4 a week rise in child tax credit from 2012.

Small & Medium Sized Businesses

• Most needed breathing space “Time to Pay” required by struggling companies to pay their taxes has been extended
• Annual Investment Allowance has been doubled to £100,000 from 1st April 2010 (6th April for individuals and partnerships) from £50,000
• Business rates holidays for small & tiny businesses on properties up to a rateable value of £6,000
• Entrepreneur’s Relief to be doubled for disposals from 6th April 2010 to £2m as a lifetime limit

LOSERS

• Individuals earning over £150,000 face a higher rate of income tax at 50% from 6th April 2010
• Progressive erosion of tax allowances for those earning more than £100,000
• Restriction on pension tax relief for those earning more than £130,000
• Increased duties on cigarettes, alcohol and worst off are the cider drinkers
• Like many recent years “anti avoidance” on tax schemes such as employee benefit trusts etc.
• Like VAT, HMRC may be able to ask for security for late payment of PAYE from employers
• From 6th April 2011, residential properties over £1m will be subject 5% stamp duty

If you feel that these changes will affect you and your business or would like any clarification on any of the points then please do not hesitate to call Riz Akhtar on 020 8429 7474

RA Accountants