Budget 2009 – A brave new world
The problem with any good party is waking up to the hangover the morning after and for high earners, this week’s budget represents that rather unpleasant experience.
For starters, individuals with income of over £100k will see the phased withdrawal of their personal allowances and anyone earning above £150,000 will be taxed at 50% on their earned income and 42.5% on dividend income from 5 April 2010.
Higher rate pension relief for those with incomes above £150,000 will be restricted and at the point incomes reach £180,000 will be withdrawn altogether, from 5 April 2011.
The tax breaks afforded to the owners of furnished holiday lettings are to be stripped away removing access to valuable capital gains tax reliefs and loss reliefs.
The above does not represent all of the changes and there are of course some helpful tweaks to the tax system in terms of greater flexibility to carry back losses and some capital allowances breaks, all of which can be found below.
Adobe Reader is required to view this report, if you cannot open the file you can download the reader from Adobe here
But for me what really comes across is how, in my opinion, this budget marks a brave new world in terms of tax policy and fiscal discipline and where the tax rates of yesteryear may well end up seeming like somewhat of a gift.
In the meanwhile I shall keep my fingers crossed that the economy starts to recover before rates have to revert to those that featured in my tax tables the best part of 20 years ago!
Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.
