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NewsletterDecember 2008
The Pre-Budget ReportOnly snippets of the report are shown on this page. More detail on any subject is available by following the links in each section or you can go straight to the complete report.
Good NewsThe Chancellor’s Pre-Budget Report last month did contain some genuinely good news for small businesses. Firstly, it confirmed that the Finance Bill 2009 will not include the controversial ‘income shifting’ legislation, which would have had a major impact on many family businesses. View more detail on this Tax on small company profitsSecondly, the Chancellor announced that the small companies rate of corporation tax, due to rise to 22% in April 2009, will be held at 21% for a further year. Reprieve for travel expenses claimsThirdly, the Government was considering tightening up the rules governing tax relief for travel-to-work expenses incurred by employees and directors but has now decided to allow the existing rules to continue for the time being. View more detail on this Some flexibility for tax paymentsFourthly, in his Pre-Budget Statement to Parliament the Chancellor promised that: ‘From today, HMRC will enable firms facing difficulties to spread their tax on a timetable they can afford. This will cover all business taxes – VAT, corporation tax, income tax and National Insurance. View more detail on this Relief for trading lossesFifthly, the Chancellor announced an extension of the general tax relief for trading losses. View more detail on this
Capital Allowance on Motor CarsHitherto there has been a special rule limiting the capital allowances that can be claimed on motor cars costing more than £12,000, to £3,000 a year (and also restricting tax relief for lease rental payments on such cars). For cars purchased on or after 6 April 2009 (1 April 2009 for companies) this rule will be replaced by a new rule restricting capital allowances on cars with CO2 emissions above 160g/km, to 10% a year (instead of the usual 20%). Lease rental payments on such cars will be subject to a flat-rate restriction of 15%. Importantly, these new restrictions will apply to taxis and hire cars, which were exempt from the old rules. In some cases, there may now be an advantage in buying a new car before April, and in others in leaving the purchase until later. Because of the wide range of factors to be taken into account, we can only suggest that clients contact us for individual advice.
Personal Tax ProposalsView details of these proposals
Change to the standard rate of VAT - Key factsThe new standard rate of 15% came into effect on 1 December 2008 but it will revert to 17.5% on1 January 2010. This ONLY affects businesses which buy and sell goods or services subject to the standard rate of VAT. Any mistakes made should be rectified through the “voluntary disclosure process" and a “light touch” will be applied to errors made in the first VAT return after the change.
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