It has to be said that this was a rather uninspiring budget, with much of the rates announced in the pre budget report last year.
The theme seems to have been one of “steady as she goes”. There are no major changes to either allowances or rates with the exception of the introduction of the additional rate tax which we heard about last year.
The additional rate of 50% has been introduced for those with incomes of £150k or more. They will also suffer from an increased dividend rate of 42.5%.
At these level of earnings, there is no personal allowance (tax free amount) as this will be gradually withdrawn for all those with adjusted incomes of £100k by £1 for every £2 earned.
Other “Highlights”
Corporation Tax – small rate of Corporation Tax will remain at 21% for those with taxable profits of £300k or less.
VAT – the thresholds at which you must register have been increased to £70k, deregistration limits have been increased to £68k. The turnover limit for being able to use the flat rate VAT scheme continues at £150k.
Annual Investment Allowance – this is an allowance which enables immediate tax relief for purchases of capital equipment (Note this does NOT include company cars). As from 01/04/10 (06/04/10 for individuals) this is being increased from £50k to £100k per annum. In reality, most small businesses would struggle to find the cash to spend this increased amount.
Stamp Duty – probably the highlight and most reported item is the abolishment of stamp duty for first time buyers of residential property between £125k and £250k in value. This is effective for all transactions on or after 25/03/10 and before 25/03/12.
See our reference page for all the latest rates and allowances.