DAVID J. COX, ACPA 

Certified Public Accountant & Tax Consultant    

Telephone 01323 412191 Fax No 01323 400070  mailto:david@davidjcox.co.uk  Mobile 07805 379291

Telephone answered Mondays to Fridays 9.00 AM TO 7.00 PM and Saturdays 9.00 AM TO 4.00 PM

2009 Budget tables:

Income tax, capital gains tax, and inheritance tax

£ per year (unless stated) 2008-09 Change 2009-10
Income tax personal and age-related allowances
Personal allowance (age under 65) £6,035 +£440 £6,435
Personal allowance (age 65-74) £9,030 +£460 £9,490
Personal allowance (age 75 and over) £9,180 +£460 £9,640
Married couple's allowance* (aged less than 75 and born before 6th April 1935) £6,535 N/A N/A
Married couple's allowance* (age 75 and over) £6,625 +£340 £6,965
Married couple's allowance* - minimum amount £2,540 +£130 £2,670
Income limit for age-related allowances £21,800 +£1,100 £22,900
Blind person’s allowance £1,800 +£90 £1,890
Capital gains tax annual exempt amount
Individuals etc. £9,600 +£500 £10,100
Most trustees £4,800 +£250 £5,050
Individual inheritance tax allowance £312,000 +£13,000 £325,000
Pension schemes allowances
Annual Allowance £235,000 +£10,000 £245,000
Lifetime Allowance £1,650,000 +£100,000 £1,750,000
* Married couple's allowance is given at the rate of 10%.
Income tax: Taxable bands
  2008-09 2009-10
Savings starting rate*: 10% £0-£2,320 £0-£2,440
Basic rate: 20% £0-£34,800 £0-£37,400
Higher rate: 40% Over £34,800 Over £37,400

* If an individual’s taxable non-savings income is above the savings starting rate limit then the 10% savings rate will not be applicable. There are no changes to the 10% dividend ordinary rate or the 32.5% dividend upper rate.

Corporation tax on profits

£ per year (unless stated) 2008-09 2009-10
£0-£300,000 21% 21%
£300,001 - £1,500,000 Marginal relief Marginal relief
£1,500,001 or more 28% 28%
National insurance contributions
per week (unless stated) 2008-09 Change 2009-10
Lower earnings limit, primary Class 1 £90 +£5 £95
Upper earnings limit, primary Class 1 £770 +£74 £844
Upper Accruals point N/A N/A £770
Primary threshold £105 +£5 £110
Secondary threshold £105 +£5 £110
Employees’ primary Class 1 rate between primary threshold and upper earnings limit 11% - 11%
Employees’ primary Class 1 rate above upper earnings limit 1% - 1%
Employees’ contracted-out rebate - salary-related schemes 1.6% - 1.6%
Employees’ contracted-out rebate - money-purchase schemes 1.6% - 1.6%
Married women’s reduced rate between primary threshold and upper earnings limit 4.85% - 4.85%
Married women’s rate above upper earnings limit 1% - 1%
Employers’ secondary Class 1 rate above secondary threshold 12.8% - 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 rate £2.30 +£0.10 £2.40
Class 2 small earnings exception (per year) £4,825 +£250 £5,075
• Special Class 2 rate for share fishermen £2.95 +0.10 £3.05
Special Class 2 rate for volunteer development workers £4.50 +£0.25 £4.75
Class 3 rate (per week) £8.10 £3.95 £12.05
Class 4 lower profits limit (per year) +£5,435 +£280 £5,715
Class 4 upper profits limit (per year) £40,040 +£3,835 £43,875
Class 4 rate between lower profits limit and upper profits limit 8% - 8%
Class 4 rate above upper profits limit 1% - 1%

Working and child tax credits rates

£ per year (unless stated) 2008-09 Change 2009-10
Working Tax Credit
Basic element £1,800 +£90 £1,890
Couple and lone parent element £1,770 +£90 £1,860
30 hour element £735 +£40 £775
Disabled worker element £2,405 +£125 £2,530
Severe disability element £1,020 +£55 £1,075
50+ Return to work payment (16-29 hours) £1,235 +£65 £1,300
50+ Return to work payment (30+ hours) £1,840 +£95 £1,935
Childcare element of the Working Tax Credit
Maximum eligible cost for one child £175 per week - £175 per week
Maximum eligible cost for two or more children £300 per week - £300 per week
Percentage of eligible costs covered 80% - 80%
Child Tax Credit
Family element £545 - £545
Family element, baby addition £545 - £545
Child element £2,085 +£150 £2,235
Disabled child element £2,540 +£130 £2,670
Severely disabled child element £1,020 +£55 £1,075
Income thresholds and withdrawal rates
First income threshold £6,420 +£1,200 £6,420
First withdrawal rate 39% - 39%
Second income threshold £50,000 - £50,000
Second withdrawal rate 6.67% - 6.67%
First threshold for those entitled to Child Tax Credit only £15,575 +£465 £16,040
Income disregard £25,000 - £25,000
 
Child benefit and guardian’s allowance rates 2009

 

£ per week 2008-09 Change 2009-10
Eldest/Only Child £18.80 +£1.20 £20.00*
Other Children £12.55 +£0.65 £13.20*
Guardian’s Allowance £13.45 +£0.65 £14.10

* The child benefit rates increased from 6 January 2009, Guardian's allowance from 6 April 2009.

Stamp taxes and duties
Transfers of land and buildings (consideration paid)
Until 31 December 2009

Rate Residential Non-residential
  Total value of consideration
Zero £0 - £175,000 £0 - £150,000
1% Over £175,000 - £250,000 Over £150,000 - £250,000
3% Over £250,000 - £500,000 Over £250,000 - £500,000
4% Over £500,000 Over £500,000
 

From 1 January 2010

Rate Residential in disadvantaged areas Residential outside disadvantaged areas Non-residential
  Total value of consideration
Zero £0 - £150,000 £0 - £125,000 £0 - £150,000
1% Over £150,000 - £250,000 Over £125,000 - £250,000 Over £150,000 - £250,000
3% Over £250,000 - £500,000 Over £250,000 - £500,000 Over £250,000 - £500,000
4% Over £500,000 Over £500,000 Over £500,000

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). 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
  Residential in disadvantaged areas Residential outside disadvantaged areas Non-residential
  Slice of NPV
Zero £0 - £150,000 £0 - £125,000 £0 - £150,000
1% Over £150,000 Over £125,000 Over £150,000
Transfers of shares and stocks

The rate of stamp duty/stamp duty reserve tax on the transfer of shares and securities is unchanged at 0.5 per cent for 2009-10.

Budget 2009 : Summary of VAT measures


     
  • VAT registration threshold increased from £67,000 to £68,000 with effect from 1 May 2009, a rise of 1.5%.
    BN 70

     

  • VAT voluntary deregistration threshold increased from £65,000 to £66,000 with effect from 1 May 2009, a rise of 1.5%.
    BN 70

     

  • Simplified procedure for those opting to tax a building which has been used to make exempt supplies with effect from 1 May 2009. This will mean that property owners will be less likely to have to contact HMRC for permission to exercise the option to tax. Related concessions will be withdrawn from 2010.
    BN 67

     

  • Reduced rate of 5% VAT currently applying to children’s car seats and related wheeled framework and booster cushions will be extended so that it also applies to car seat bases. Takes effect on 1 July 2009.
    BN 68

     

  • VAT fuel scale charges which provide an output tax charge to be paid when VAT on fuel used privately is subject to input tax recovery increased with effect from 1 May 2009. These rise by an average of 9.6%
    BN69

     

  • VAT standard rate increases back to 17.5% on 1 January 2010 – a confirmation of the announcement made in November 2008.
    BN71

     

  • Anti forestalling legislation has been tabled for Finance Bill 2009 to prevent businesses which suffer a VAT input tax block from manipulating supplies forward to the period when the 15% standard rate applies. The legislation will prevent connected parties from abusing the change in rate, and will also prevent 15% VAT applying to any supplies which are invoiced before the end of 2009, but for which payment is not due for at least 6 months; the measures will, however only apply where the customer cannot recover all of the VATcharged.
    BN72

     

  • Various changes are made to VAT on gaming activities, including removing VAT from participation fees with effect from 27 April 2009, and increasing bingo duty to 22%.
    BN73

     

  • 2010 brings new cross border services rules throughout the EU. As a result, the Budget includes various announcements in relation to these changes, including changes to the place of supply rules (BN74) which will lead to services generally being taxable where consumed, amended time of supply rules (BN75), and the introduction of a requirement for suppliers of cross border services in the EU to complete EC Sales lists (BN 76). Most take effect from 1 January 2010.

     

  • Cross border reclaims of EU VAT will be simplified in 2010 when the rules change to permit reclaims to be made to HMRC electronically rather than on paper to the member state concerned (as now). The change will apply to claims made from 1 January 2010, and is likely to mean that smaller businesses will be able to make EU VAT reclaims in future, due to the simplification in the procedure.
    BN77

     

    Budget 2009 : Summary of personal income tax changes


       
    • Personal allowances and tax bands (including national insurance rates and bands) were, as expected, unchanged from those announced in November as part of the Pre Budget Report.
      PN02

       

    • The higher rate of income tax will now be 50% rather than the 45% previously announced. Dividends within this band of income will be taxed at 42.5%. This will apply to taxable income above £150,000 from April 2010 and not 2011 as announced in November 2008.
      BN01

       

    • From April 2010 the rate applicable to trusts will rise from 40% to 50%, with a dividend trust rate of 42.5%.
      BN01

       

    • From April 2010 individuals with “adjusted net income” of £100,000 will lose £1 of personal allowance for every £2 their income exceeds this limit. The adjusted net income is calculated in the same way as for the restriction of allowances applying to taxpayers over 65, which deducts losses and grossed up pension contributions and gift aid payments from gross income. It was originally intended to withdraw allowances in two slices at £100,000 and £140,000 – the taxpayer losing half the allowances in each slice. This will now be a single adjustment to the allowances applying at £100,000.
      BN01

       

    • Some tax charges applying to registered pension scheme taxable events are linked to the higher rate of income tax. These will therefore be made at 50% from 2010 rather than 40%.
      BN01

       

    • The rate of tax relief on pension contributions will be restricted from 6 April 2011 for those with incomes of £150,000 or more. The relief will be restricted to basic rate, which is normally given at source.
      BN47

       

    • There is to be an anti forestalling measure to prevent those with income in excess of £150,000 from accelerating their pension contributions into the period between now and April 2011, to gain the benefit of tax relief at 40% or 50%. The rules will impose a special annual allowance and provide a tax charge on the scheme if this is exceeded. It will be restricted so that it affects only those making contributions in excess of £20,000 in a tax year, but will also apply to contributions made by the employer, and to enhancements of benefits in defined benefit schemes.
      BN47

       

    • As already announced, dividends from foreign companies in which the shareholder owns more than 10% of the shares will attract a tax credit of one ninth. However, this measure will only apply to dividends paid on or after 22 April 2009, and to dividends from companies which arise in “qualifying territories” – essentially those with whom the UK has a DTA with a non discrimination article. The credit will also apply to offshore funds which are largely invested in equities.
      BN21 & BN22

       

    • Income tax relief on a loan used to invest in a partnership or close company will be restricted to prevent a notified avoidance scheme from being effective. The scheme provided an exit arrangement which protected the investor from investment risk. The announcement was made on 19 March, so the change applies from that date.
      BN38

       

    • Personal allowances can be claimed by non resident taxpayers under certain circumstances. The right of Commonwealth citizens to claim personal allowances in the UK is to be withdrawn from April 2010 as it is not compliant with human rights legislation. Most claimants will be able to claim on other grounds.
      BN54

       

    • There are a number of changes to the remittance basis rules for non domiciled individuals which were introduced in Finance Act 2008. These include exemption from filing a tax return (from April 2008) for non doms with up to £10,000 foreign employment income and £100 bank interest which has been taxed abroad.
      BN55
       
            Savings
     
    • The ISA limit will increase to £10,200 from 2009/10 for those aged 50 or more, and the new limit will apply to all savers from 2010/11. The cash limit within the overall limit will be £5,100.
      BN51

       

    • Improvements have also been made to the EIS scheme, in particular to extend the carry back rules by removing the limits which permit only half of the amount invested to be carried back, subject to an upper limit of £50,000.
      BN08


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