Business and Banks Budget 2010
Business Rates, Budget 2010
The Chancellor announced that business rates for 500,000 small businesses would be cut for one year from October 2010, with 345,000 of them paying no business rates at all.
Eligible small businesses occupying properties with rateable values up to £6,000 will pay no business rates for one year from October. In addition, small businesses benefiting from the rate relief taper (rateable values up to £12,000) will receive significant reductions. It is estimated that over half a million businesses across England will benefit, many by well over £1,000.
Entrepreneur’s Relief Budget, Budget 2010
With effect April 2010 the amount of capital gains that can be made by business owners disposing of their business will double from £1m to £2m. There are of course a number of restrictions to qualify for the relief but within that £2m band tax is only paid at 10%.
Annual Investment Allowance (AIA) - Increase of Threshold
The Annual Investment Allowance (AIA) allows businesses to reduce their taxable profits by the full amount of their annual capital expenditure on most plant and machinery (except cars), up to a maximum amount of £50,000 each year. With effect April 2010 this limit increases to £100,000.
Systemic Risk Tax
The Government is proposing this new tax on financial institutions that might contribute significantly to systemic risk, although internationally rather than just the UK.
Tax Incentive - Video games
The Government announced it is to introduce a new tax relief for the UK video games industry to support game development by the UK, although the terms are still being discussed.
Corporation Tax - Rates
The small profits rate of corporation tax remains at 21% for all profits apart from ring fence profits, which are taxed at 19%. The main rates of corporation tax are set at 28% and 30% for ring fence profits.
VAT - Registration and Deregistration Thresholds
With effect April 2010 the taxable turnover threshold for compulsory registration for VAT increases from £68,000 to £70,000. The deregistration threshold increases from £66,000 to £68,000.
Anti Avoidance - Earnings paid through Trusts or other entities
The Government will be introducing anti-avoidance legistlation from April 2011 to prevent attempts to avoid tax and National Insurance contributions through the use of Employee Benefit Trusts and other arrangements to disguise payments of remuneration.
Bank Payroll Tax
The new tax will apply to banks and building societies who award bonuses to employees over £25,000 during the period from 9 December 2009 to 5 April 2010. 50% tax will be levied on any amount over £25,000.
Investment Trust Companies - Modernisation
The Government intends to review the tax legislation for investment trust companies with a view to modernising the rules. A consultation document will be issued in summer 2010.