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Personal and employment taxes

You will find listed here all articles related to Budget 2009 - Personal and employment taxes.

High Earners Hit Hard By Extra Tax

For high earners, we were already expecting a 45% income tax rate from 6 April 2011 and a staged removal of the personal tax allowance from 6 April 2010, as announced in November’s pre-budget report. Today, however, the chancellor made significant changes to what he had previously announced.

Removal of higher tax relief on pension savings

Removal of higher rate tax relief on pension savings may impact on pension contributions paid on or after 22 April 2009.

Increases to ISA limits

Existing Individual Savings Accounts (ISA) regulations stipulate that the overall annual subscription limit for an ISA is £7,200, of which up to £3,600 can be saved in a cash ISA with one provider. The remainder can be invested in stocks and shares, with either the same or another provider.

Miscellaneous Measures Affecting Individual Taxpayers

Finance Bill 2009 will include legislation to:

Child Trust Fund: Payments for disabled children

Every eligible child born on or after 1 September 2002 has a Child Trust Fund account, to which the Government contributes an initial £250, and family and friends can contribute up to £1,200 into the account each year. A further contribution of £250 is also made by the Government when the child reaches age 7.

Furnished Holiday Lettings in the European Economic Area

If you own a let furnished property in the EEA you may now be able to treat it as a trade for UK tax purposes. This can have distinct tax advantages.

Company benefit changes

Changes in the CO2 emissions rate - the announcement that the increasing thresholds for the main company car tax bands will be shifted down by 5g CO2 per km from 130 g/km to 125g/km was predicted.

Talent taxed out of the UK

With effect from 6 April 2010 the tax rate for individuals earning in excess of £150,000 goes up to 50%. This represents a movement on previous announcements of a 45% tax rate from 6 April 2011.

Housing for employees - new punitive tax rules

With effect from today it just got significantly more expensive for employers to provide housing to their directors and employees. Up until now, where companies were bringing their employees to the UK for a short period of up to 3 years, it was not uncommon for them to provide housing to such employees, particularly senior management, via a lease premium arrangement. By paying a lump sum upfront of say £100,000 to buy a 3 year lease on a property worth say £900,000, the annual benefit in kind charge would be kept in the low thousands rather than being 5 figures.

In-year interest and penalty charges on employers

Employers will be faced with further red-tape in terms of filing returns and paying tax across to HM Revenue & Customs.

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