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Owner managed businesses and entrepreneurs

You will find listed here all articles related to Pre-Budget Report 2009 - Owner managed businesses and entrepreneurs.

Business Payment Support Service and Small companies tax rate

In response to the economic downturn the Government introduced the BPSS on 24 November 2008. The BPSS offered a deferral of payment of tax liabilities to viable, but struggling, businesses to reduce the risk that lack of available credit would harm the economy. The Chancellor has now announced an extension of the BPSS for a further year to 5 April 2011.

Hike in National Insurance

The 2008 Pre-Budget Report announced increases in the main rate of Class 1 and 4 National Insurance (“NI”) of 0.5% to 11.5% and 8.5% respectively, with the employer’s rate also increasing by 0.5% to 13.3%. These changes were due to be effective from 6 April 2011.

Pension Contribution Allowances

The Chancellor has announced measures that he believes will see a further 70,000 individuals affected by the capping of tax relief on pension contributions, in total a mere 2% of pension savers.

EIS and VCT - Changes to Venture Capital Schemes

A number of changes have been announced to the EIS and VCT regimes to make them more compliant with EU law as follows:

Cars and fuel the future taxation policy is made clear

The Chancellor has set out the future for the taxation of company cars. The present tax rules will have been in place for 10 years at April 2012 and it was unclear what would be the future policy. There is no intention to significantly change the way in which the benefit in kind is calculated, however, the changes announced will mean that company cars will be more expensive for employees unless the vehicle has lower CO2 emissions.

Tackling Tax Evasion

In his Pre-Budget Report the Chancellor made a very clear statement that the Government was going to continue its war on tax evasion with consultation on three measures:

Tax avoidance – HMRC expanding their intelligence gathering

The Government has published a consultation document with various proposals to widen and strengthen the disclosure of tax avoidance schemes (DoTAS) regime.

Further attack on schemes to gain the benefit of capital allowances

A long time ago now, HMRC suggested businesses would like to have their tax simplified by having accounting depreciation as their tax deduction instead of capital allowances. There was almost unanimous objection from businesses – they liked the flexibility of deciding when they wanted to receive amounts of tax relief for acquiring plant and machinery. HMRC have not forgotten that businesses were keen on the “inconvenience” of capital allowances.

Furnished Holiday lettings (FHL)

Currently, a furnished holiday letting can be deemed to be a trade and as such enjoys more flexible loss relief, capital allowances, and certain capital gains reliefs. For Income tax and Capital Gains tax purposes these rules cease from 6 April 2010 and for Corporation tax purposes the rules cease from 1 April 2010 (“the relevant date”).

Bank Bonus

The Government has targeted bonuses in the banking sector and the perceived contribution bonuses have on risk taking. In his speech, the Chancellor also highlighted the need for the banking sector to recapitalise balance sheets in priority to paying out bonuses.

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