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Bulletin No. 45 (23 April 2009) 

Taxation Dates

   19 May 2009      Final Filing date for 2008/09 PAYE data.

     6 July  2009       Final Filing date for  2008/09 P11D forms.

  31 July  2009       2nd Payment on account of 2008/09 S.A. Taxation.

Accounts

We should have dealt with, or be dealing with, any Accounts to be dated 30th  September 2008 , or earlier. 

The 2009 Budget 

This Bulletin is produced rapidly, it could contain errors.  Note that the Budget Statement is not law until passed by Parliament as an Act.  

Taxation rates and bands or thresholds are transferred to the taxation pages.

Although much was known from the November Pre-Budget Report, there is a mass of new detail and a raft of new measures. 

General Budget Background 

Chancellor Alistair Darling forecast economic growth at - 3.5%(negative) for the year 2009, 1% for 2010 and 3.5% for 2011.Monetary Inflation for 2009 is forecast negative at -1% for 2009  and to be -3% by September 2009 based on the Retail Prices Index. The Inflation "target," set for the Bank of England remains  at 2%. He reported that the numbers of the un-employed increased by137,000 in February and 74,000 in March.  Taxation receipts are reduced.  Whilst public spending is to be restrained, the government borrowing requirement is to reach unprecedented levels, peaking at 79% of GDP in the year 2013/14.

Some changes first announced in the Pre-Budget Report last November are altered.

Trading Loss Relief  

Generally a tax loss for a business can be carried back to thepreceding year's profit, for set-off.  A company may claim to have a tax loss ending within the year to 23rd November 2009carried back first to the preceding year and any excess against  the two preceding years (earliest first).  The same applies to an unincorporated business with tax loss in its basis period for tax year 2008/09.

Furnished Holiday Lettings

Furnished Holiday Lettings for property situated in EU countries will be treated in the same way as those in the UK until the year2009/10 (current).  This is a back-dated change.  It means that if there is a tax loss, it could be set off against other income, however, some rules change for this to be effective - notably the entitlement to the 10% Wear & Tear allowance ceases. 

From the year 2010/11:

  The Furnished Holiday Lettings rules will be repealed.  Such  income or losses will be treated like other property lettings.  Thiswill mean that tax losses generated from properties wherever situated cannot be set off against other income. Instead such can only be carried forward against future profits.

Individual Savings Accounts (ISA) Investments

For those aged over 50 the limit is increased to £ 10,200

In the year 2010/11

The entitlement of an individual to the tax Personal Allowance will be reduced by £ 1 for each £ 2 that his income exceeds £ 100,000. There is to be an additional 50% higher rate tax for the excess of an individual's income over £ 150,000 per annum.   

In the year 2011/12 

Tax Relief for Pensions Contributions made will be restricted to the basic rate for those whose income exceeds £ 150,000.  Provisions are to be introduced to this Finance Bill to counter forestalling of the new rules.

Capital Allowances

Other Proposed Tax Measures

Stamp Duty on houses costing less than £ 175,000 is to continue at nil until 31st December 2009 .

VCT and EIS rules are to be improved.

Foreign Income rules are given minor amendments.

Corporate Intangible Fixed Asset regime is to be tightened.

Non-Domiciled Taxpayers.  The remittance basis for these taxpayers is to be simplified.

Non Resident Commonwealth Citizens may loose their entitlement to UK personal allowances and tax relief with effect from April 2010.

 New Proposed Taxation Filing Penalties

A new penalty regime is proposed and is likely to be introduced in stages from April 2010:

Income Tax Returns

The existing £ 100 late filing penalty should apply whether or not the tax due has been paid.

Employers’ PAYE Monthly Payments

A measure penalising the employer for late payment of PAYE and Construction Industry Scheme tax deductions.

Comment

Little attempt at keeping alterations as simple as possible appears to have been made.  The proposed future withdrawal of tax Personal Allowance from higher earners seems to be an unnecessary complication – whilst probably exasperating the taxpayer, it will produce very little overall additional tax revenue and unless they have no income other than from their employment, it will be practically impossible to produce an accurate PAYE code for marginal high earners.  The ISA allowance has been left as before except for those aged over 50 and that is to apply only with effect from 6th October.  All will be entitled to the new ISA limits with effect from April 2010.

 Erratum

The previous printed Bulletin (no. 44) reported the main Income Tax personal allowance for year 2008/09 as £ 5,435. This was the original figure, before it was changed to £ 6,035.  We regret any confusion caused.

The Markets

                @ 22nd April 2009

@ Close £   =    Euro Î1.1170

                  =    US    $ 1.4537

 @ Close FTSE 100  =  4,030.6  

The Markets

Following advice of higher than anticipated UK borrowing requirements and perception of a serious deterioration of public finances, the Budget depressed £ Sterling on the foreign exchange market.

   On the day £ Sterling gave up about 1% against UK ’s trading partners and 0.7% overall.

   With some business tax relief introduced by the Budget, on balance, the London Stock Exchange was mainly unaffected by the announcements.  The FTSE 100 gained 43 points on the day.

To return directly to the greenhow home page click here: [home] or view:    [Bulletin No.40], [Bulletin No. 41],[Bulletin No. 42] , [Bulletin No.43],[Bulletin No.44],[Bulletin No. 45],[Bulletin No. 46],[Bulletin No. 47]

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