Pre Budget Report 2009

In summary the key parts of the budget together with key changes are as follows:

· a 1% increase in the NIC rates payable by employers, employees and the self-employed from April 2011. (This is implemented by a further 0.5 per cent increase in the rate of employer, employee, and self-employed NICs from April 2011 to 13.8 per cent, 12 per cent and 9 per cent respectively. The additional uncapped rate of employee NICs increases to 2 per cent, also from April 2011).

the introduction of a 50% additional rate of tax for those with the highest income levels (as previously announced)

This will bring the top rate of income tax and NIC combined to 52%

freezing the personal allowances and tax bands at the 2009/10 amounts for most taxpayers
changes to the complex rules for the Special Annual Allowance charge which affect those with substantial income, making significantly higher pension contributions in anticipation of the removal of higher rate tax relief which will occur in 2011
the deferral for a further year of the planned increase in the small companies corporation tax rate, maintaining the current rate of 21% for a further year
the standard rate of VAT will return to its former rate of 17.5% on 1 January 2010 (Please see our web site for details of how this will affect you)
a temporary bank payroll tax of 50% is to apply to certain bonuses (in whatever form).

Other important measures

Extension of the Business Payment Support Service that assists businesses in temporary financial difficulties by allowing them more time to meet tax costs.
A wide variety of individually small new measures to provide additional support for low carbon growth.

As always, if you wish to discuss any issues raised in the pre budget or just want to talk through the impact of any changes, please feel free to give us a call.

For further detail, please click on the link below.

Pre Budget Report 2009