Investment Property Accountants - WARR & CO

Investment Property Accountants

Pre-Budget Report - December 2009

The Chancellor presented his Autumn Statement on 9th December and delivered a number of tax changes. We highlight below the major changes that are of most relevance to our clients.

Value Added Tax (VAT)

As expected the VAT rate will increase to 17.5% from 1st January 2010.

Personal Allowances & Tax Rates

Personal allowances have been frozen at their 2009/2010 levels. So to have the IHT threshold and the level at which 40% tax is payable. From 6th April 2010 a 50% tax level will apply on incomes above £150,000.

Time To Pay Scheme

A scheme was launched in late 2008 to help businesses experiencing temporary cash flow difficulties to apply for extended payment terms for their tax liabilities. Originally intended to run for a year, this scheme has been extended for the time being.

National Insurance (NI)

The increase in the Upper Earnings Limit planned to take effect on 6th April 2010 has been withdrawn, there will however be a small increase in the Lower Earnings Limit from £95 per week to £97 per week. National Insurance rates for 2010/2011 will be exactly the same ad those for 2009/2010

The Chancellor had previously announced that National Insurance rates would be increasing by 0.5% from 6th April 2011. This has been changed so that the rates will now be increased by 1%. The Primary Earnings Threshold will be increased so that those earning less than £20,000 per annum will not be affected.

Bank Bonuses

Any bank that pays a bonus to one of its employees between 9th December 2009 and 5th April 2010 will face a 50% tax charge on the amount of the bonus in excess of £25000. Furthermore, this charge will not attract corporation tax relief.

It is important to emphasis that this change is not intended to apply to all companies paying bonuses. It takes effect only to companies carrying out activities regulated by the Financial Services and Markets Act.


The special rules introduced in the 2009 budget to tax individuals who wished to make large irregular contributions to their pension schemes before the introduction of new rules from 6th April 2011 have been tightened. From 9th December they will apply to individuals with total incomes of £130,000 or more rather than £150,000 or more.

The new rules which come into effect from 6th April 2011 were to apply to individuals whose gross income including employer contributions to their pension schemes exceed £150,000 per annum have been relaxed a little. Anyone whose total income is less than £130,000 (before taking account of their employer's pension contribution) will be exempt from the new charge.

Corporation Tax

The small companies rate of corporation tax had been set to increase to 22% from 1st April 2010. It will now remain at 21% until at least 31st March 2011.


A duty on land lines will be introduced on 1st October 2010 at a rate of 50p per month

Date of Article: 10th December 2009

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