Budget 2009 - Key points for small businesses
Here are some of the key points from the Chancellor's Budget speech - this page will be updated throughout the day. You can also read business reaction to the Budget.
Economic Outlook
- Chancellor expects to see economic growth returning by the end of 2009
- Predicts growth of 1.25% in 2010
- Growth of 3.5% from 2011 predicted
- Public borrowing is set to increase to a record £175bn in 2009, followed by £173bn in 2010 and remain over £100bn/yr for a further two years
- Inflation may fall to around 1% by the end of 2009, although RPI may fall to -3% before moving back to zero in 2010
- Chancellor expects the Government's recent economic measures will safeguard 500,000 jobs
General Measures
- Additional support for long-term unemployed, more funding for Jobcentre Plus, training and skills
- Sub-£175,000 properties continue to be exempt from stamp duty until the end of 2009
- Car scrappage scheme from next month until March 2010 to encourage people to trade in old cars for new ones
- Annual limits for ISAs will be increased to £10,200 per year (£5,100 for Cash ISAs) from 2010 (earlier for those over 50)
- Alcohol and tobacco duties will go up by 2%
- Fuel duty expected to go up by 2p per litre from September
Taxes
- Incomes over £150,000 per year will be taxed at 50% from April 2010, with a 42.5% rate for dividend income
- Tax allowances to be restricted for those with incomes over £100,000 per year
- Pension tax relief restricted for those with incomes over £150,000 per year from April 2011, and tapered down until it is 20%
- Chancellor announced another crackdown on 'tax avoidance' schemes
Business Measures
- The standard rate of VAT will remain at 15% until December 2009, and return to 17.5% from 1st January 2010
- Statutory redundancy pay will rise from £350 to £380 a week
- The VAT registration threshold will rise to £68,000 from 1st May 2009
- HMRC's Business Payment Support Service to be expanded
- Top-up trade credit scheme to top up deficits in private sector credit schemes
- Chancellor will double the main capital allowance rate to 40% to encourage firms to bring forward investment
- An extension of the three-year carry back, meaning loss-making businesses can reclaim taxes on profits made in the last three years. It will help lots of businesses, but it was expected and is simply an extension of an existing measure.
Further Resources
Posted April 22, 2009
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