The Chancellor’s Pre-Budget Report smacked of political cowardice. Full of attention grabbing headlines with little substance really except for high earners. Have a look at the Pre-Budget highlights below. If you would like to discuss how the Pre-Budget affects you or your business please call me on 01344 620405 or mark.busby@dbsellek.co.uk

Read Pre-Budget Report in detail

Personal Taxation

The big news (and one to shout from the roof tops) is there are no changes to Capital Gains Tax. So make the most of it. Call me for practical Tax Planning solutions;

The top rate of tax is rising to 50% from April 2010 for those earning £150,000 or more. Consider taking extra dividends before this date or putting dividends in your spouse’s name if they are a basic rate tax payer;

The special rules preventing individuals from making large additional contributions to their pensions before 6 April 2011, have been extended to those with incomes of £130,000 or more (from 9 December 2009). Consider Lifestyle Financial Planning for practical advice on saving for the future;

Inheritance tax is frozen at £325,000 but this is largely irrelevant as property values have taken a hit anyway in the downturn;

Those earning £100,000 or more lose their personal allowance from April 2011; Talk to me about practical Financial Planning solutions;

National insurance is rising by 1% from 6 April 2011, which means less take home pay (a sneaky way of taxing your pay packet without you really knowing). Not much you can do about this one;

Business Taxation

Business reliefs are modest with the £50,000 loss relief extended for another year. There’s an increase in Capital allowance expenditure in the year up to April 2010;

The standard rate of VAT returns to 17.5% which means applying this rate to all goods and services from 1 Jan 2010. This together with other NEW 2010 VAT Changes makes for a challenging time in the coming months.
Email lindsay.gray@dbsellek for ways we can help;

The deferment of Corporation Tax is welcome news for small businesses and remains at 21% for another year.

Watch this space for my Pre-Budget report highlights on Wed 9 Dec. Follow my Pre-Budget tweets on http://twitter.com/dbsellek. If you have any questions before then please call me 01344 620495 or mark.busby@dbsellek.co.uk

In the meantime, here are my top predictions:

1. A potential increase beyond 17.5% in standard rate VAT (but not before the election or 5 April 2010)
2. Possible changes to the current 18% Capital Gains Tax
3. Possible widening of the £150,000 threshold for 50% Income Tax rate
4. Potential abolition of higher rate tax relief for pension contributions
5. Further anti-avoidance measures aimed at high earners looking to mitigate high taxation
6. Controversial phasing out of childcare vouchers for high earners
7. More attacks on Employee Benefit Trusts
8. A potential small increase in the residential Stamp Duty Land Tax threshold, due to go back down to £125,000, on 1 Jan 2010
9. Revisit income splitting which was left under review