Pre Budget Report 2009
by Even if there is a change of Government after the election, some of the announcements in the pre budget report may be revised or even dropped. However, given the Conservative’s views on reducing the Government deficit, many of the announcements may well survive.
The main announcements in the pre budget report were as follows:
• Basic state pension to be increased by 2.5% in April 2010, despite the 1.4% fall in the RPI in the 12 months to September 2009. Other benefits and tax credits will rise by 1.5%.
• The personal tax allowance and the threshold at which 40% tax is charged will remain unchanged for 2010/11.
• Taxpayers who open offshore bank accounts in certain jurisdictions will be required to report them to HMRC. A range of anti-tax avoidance measures have been announced with immediate effect.
• There is to be a temporary bank payroll tax of 50% where banks, building societies and certain other financial businesses provide a bonus of over £25,000 to an employee. This will take effect from 9 December 2009.
• The draft rules for limiting higher rate pension contributions tax relief from April 2011 have been published. There are several important changes, including a cut in the income threshold to £130,000.
• Increase in small companies’ rate of corporation tax to 22% will be deferred for another year until 1 April 2011.
• NIC rates will rise by 0.5% from April 2011 for employers, employees and the self employed.
• Rules that currently limit pension contributions tax relief have been changed with immediate effect; the revisions include a new income threshold of £130,000.
For more information about the Pre Budget Report sign up to view Barnes Roffe’s Pre Budget Report Seminar Video.
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