|
Resign! |
| Sorry
but it’s time for a rant. |
|
You can blame the economists, but they have always been
finger in the air merchants who are only guessing. You
can blame fat cat bankers, but they couldn’t even
see the smoke and mirrors for the piles of cash. You
can blame the regulators, but they are nice professional
people cast adrift in punctured rubber dinghies in a
bandit ridden shipping channel. You can blame all of
us for being part of the system. In fact you can blame
who you like. |
| I
blame the smug certainty of our former ‘no
more boom & bust’ Chancellor. And now
after many annoying Budgets he and his Darling sidekick
have just released the most irritating Budget in memory.
Here are a few of the highlights: |
The 50% tax rate (51% when you add in National Insurance) |
| From
6 April 2010 the top rate of Income Tax rises to 50%
for those with taxable income above £150,000.
We also think, from a previous announcement, that the
National Insurance will rise by 0.5% for employees and
employers from 5 April 2011. |
| Comment
The Government has presided over the booming tax planning
circus, the offshore barons, the tax attorneys and the
(largely) inappropriate tax avoidance vehicles. In one
fell swoop they have given a real boost to that industry.
That’s not all, it will alienate those the country
needs most, it won’t generate much tax revenue
and if it is a good idea now why didn’t he do
it 10 years ago. Resign! |
The scrapping of the Personal Allowance |
| From
6 April 2010 the Personal Allowance is gradually removed
for those with taxable income above £100,000. |
| Comment
Pitifully low tax Revenue from this one but more alienation
and more for the planners to juggle with. Remember that
these planners are a good deal more resourceful and
motivated than the Treasury boffins – they will
find something. Resign! |
The removal of higher rate tax relief on pension contributions |
| From
6 April 2011 certain pension contributions will no longer
attract higher rate tax relief for those with taxable
income above £150,000. |
| Comment
Fiendishly complicated here but he forced himself into
this with the 50% tax rate. In fact there will be complexity
in areas where the Chancellor doesn’t even realise
there are areas. On top of this - more alienation. Resign!
|
Announcements today not in force until April 2011 |
The
signalling of future changes has been a feature of recent
Budgets - justifying today’s spending decisions
on tomorrow’s tax rises. More smugness, more spending,
more deficit, more complexity, more deceit, more politics.
You guessed it – resign! |
Phew that feels better (and in case you are wondering,
no, I don’t earn over £150,000). |
There
were no major changes to:
Capital Gains Tax
Inheritance Tax
Spousal remuneration for owner managed companies (good!)
|
|
Please ask if you have any queries on any aspect of
the Budget. And finally, Rates and Allowances for 2009
and 2010 are set out below:
|
Rates and Allowances for 2009
and 2010
|
|
2008-09 (£)
|
2009-10 (£)
|
Increase (£)
|
| Income
tax allowances |
|
|
|
| Personal
allowance
Personal allowance for people aged 65-74
Personal allowance for people aged 75 and over |
6,035
9,030
9,180 |
6,475
9,490
9,640 |
440
460
460 |
| Income
limit for age-related allowances |
21,800 |
22,900 |
1,100 |
|
Married
couple’s allowance for people born before 6 April
1935
Married couple’s allowance –aged 75 or more
Minimum amount of married couple’s allowance
Blind person's allowance |
6,535
6,625
2,540
1,800
|
N/A
6,965
2,670
1,890
|
N/A
340
130
90
|
| Capital gains tax annual
exempt amount:
Individuals etc
Other
trustees |
9,600
4,800 |
10,100
5,050 |
500
250 |
| Inheritance
tax threshold |
312,000 |
325,000 |
13,000 |
| Taxable bands 2008-09 (£)
|
Taxable bands 2009-10 (£)
|
| Starting
rate 10% |
–
|
Starting
rate 10% |
–
|
| Basic
rate 20% |
0
– 34,800 |
Basic
rate 20% |
0
– 37,400 |
| Higher
rate 40% |
Over
34,800 |
Higher
rate 40% |
Over
37,400 |
| Corporation tax profits
2009-10 (£) |
|
| Small
companies' rate 21% |
0
– 300,000 |
| Marginal
relief |
300,001 – 1,500,000 |
| Main
rate 28% |
1,500,001 or more |
The
main rate of corporation tax for 2009-10 will be 28 per cent.
National Insurance changes from 6
April 2009
|
|
2008/2009 |
2009/2010 |
| Class
1 Employees |
| On
first |
£105
pw |
Nil
|
£110
pw |
Nil
|
| Between
|
£105
- £770 pw |
11%
|
£110
- £844 pw |
11%
|
| Over
|
£770
pw |
1% |
£844
pw |
1% |
| Employee's
contracted-out rate |
1.6% |
|
1.6% |
Married
womans
reduced rate |
4.85%
of £105 to £770 pw, 1% above £770 |
4.85%
of £110 to £844 pw, 1% above £844 |
| Class
1 Employers |
| On
first |
£105
pw |
Nil
|
£110
pw |
Nil
|
| Over |
£105
pw |
12.8%
|
£110
pw |
12.8%
|
| Employers'
contracted-out rebate, salary related schemes |
3.7% |
|
3.7% |
| Employers'
contracted-out rebate, money purchase schemes |
1.4% |
|
1.4% |
| Class
2 Self employed |
| Flat
rate |
£2.30
pw |
|
£2.40
pw |
| Small
earnings exception |
4,825
pa |
|
5,075
pa |
| Special
Class 2 rate for share fisherman |
£2.95
pw |
|
£3.05
pw |
| Special
Class 2 rate for volunteer development workers |
£4.50
pw |
|
£4.75
pw |
| Class
3 Voluntary |
| Flat
rate |
|
£8.10
pw |
|
£12.05
pw |
| Class
4 Self employed |
| On
profits between |
£5,435
- £40,040 pa |
8%
|
£5,715
- £43,875 pa |
8%
|
| |
above £40,040 |
1% |
above £43,875
|
1% |
Stamp
Taxes
Transfers
of property (consideration paid)
| Rate |
All
land in the UK |
Land
in disadvantaged areas |
| |
Residential |
Non-residential |
Residential |
Non-residential |
| Zero |
£0-125,000 |
£0-150,000 |
£0-150,000 |
All |
| 1% |
Over
£125,000 – 250,000 |
Over
£150,000 – 250,000 |
Over
£150,000 – 250,000 |
N/A |
| 3% |
Over
£250,000 – 500,000 |
Over
£250,000 – 500,000 |
Over
£250,000 – 500,000 |
N/A |
| 4% |
Over
£500,000 |
Over
£500,000 |
Over
£500,000 |
N/A |
New
leases (lease duty)
Duty
on the premium is the same as for transfers of land (except
that special rules apply for non-residential land and property
premium where rent exceeds £1,000 annually. The rules
no longer apply to residential property from 12 March 2008).
Duty on the rent is charged on any part of the net present
value (NPV) which exceeds the threshold.
| Rate |
Net
Present Value of Rent Rate |
| |
Residential |
Non-residential |
| |
Slice
of NPV |
| Zero |
£0
- £125,000 |
£0
- £150,000 |
| 1% |
Over
£125,000 |
Over
£150,000 |
The rate
of stamp duty / stamp duty reserve tax on the transfer of
shares and securities is unchanged at 0.5% for 2009-10. |
