2009 Budget Summary

Alistair Darling presented his second Budget on Wednesday 22 April 2009. Having acknowledged the depth of the recession, he hinted that the Budget measures would enable the UK economy to begin to grow ‘by the end of the year’.

As always the timing of the changes needs to be carefully watched – some are immediate but some are delayed to 2010 and beyond.

Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments.

If you have any questions please do not hesitate to contact us for advice.

Main Budget proposals

• Introduction of a 50% top rate of tax for those with income over £150,000 from 2010 and phased reduction of personal allowances for those with income over £100,000.

• Increases in ISA limits from October this year for those aged over 50 and for everyone from April 2010.

• Enhanced relief for trading losses extended by a further year.

• Short term increase in capital allowances on most plant and machinery.

• Extension of the furnished holiday lettings scheme to properties in the EEA but then the removal of the scheme completely from April 2010.

• Names of deliberate tax defaulters to be published where default was tax in excess of £25,000.

Previous announcements

Many of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:

• removal of the £12,000 ‘expensive car’ limit for capital allowance purposes

• availability of non-repayable tax credit on overseas dividends received by any individual

• removal of tax charge for companies on overseas dividends

• extension of HMRC compliance powers across all the taxes dealt with by HMRC.

Disclaimer

This summary is published for the information of clients. It provides only an overview of the main proposals announced by the Chancellor of the Exchequer in his Budget Statement, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.