Budget 2009 Special
April 2009
This Report, which was written immediately after the Chancellor of the Exchequer delivered his Budget Speech, is intended to provide an overview of the latest announcements and recent measures most likely to affect you or your business.
Throughout this guide we have included tips and ideas for effective tax and financial planning, but it is important to remember that this planning should be an ongoing, year-round process, not something that is left until the last minute.
We can help you to reassess your plans regularly, and adapt them as your personal and business circumstances change. With our help, you can plan for a rewarding and financially secure future.
Please note: while most taxation changes take effect from the start of the financial year, or tax year, some may not take effect until 2010, or later. Where relevant, details of these changes have been included in this Report. Throughout the Report, 'HMRC' refers to HM Revenue & Customs.
Darling defiant in face of recession
Chancellor Alistair Darling has unveiled a series of measures aimed at tackling the 'unprecedented economic crisis'. As widely anticipated, growth forecasts for 2009 have been revised down, with the economy expected to shrink by 3.5%, while borrowing forecasts have risen sharply to £175 billion. However, despite the economic gloom, the Chancellor asserted that the economy will recover, forecasting growth of 1.25% next year.
Key announcements include the introduction, from April 2010, of a 50% income tax rate for those earning more than £150,000 a year.
The stamp duty land tax 'holiday' for residential properties valued at £175,000 or less will be extended to the end of 2009.
Measures for businesses include the introduction of a temporary 40% first year capital allowance and an extension of help for loss-making businesses.
The Chancellor allocated £1 billion to tackle climate change, and announced a commitment to cut UK carbon emissions by 34% by 2020.
The introduction of a 'car scrappage' scheme was also confirmed, offering £2,000 to people who trade in cars that are over 10 years old. Meanwhile, fuel duty will rise by 2p a litre from September 2009.
Other measures include an increase in the child element of Child Tax Credit from April 2010, credits towards the basic state pension for grandparents of working age who care for their grandchildren, and a rise in the annual limit for ISAs to £10,200.
Budget highlights
- 50% income tax for high earners
- 40% first year capital allowance
- Extension of trade loss carry back rules
- Extension of SDLT 'holiday'
- Removal of higher rate tax relief on pension contributions
