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AIA

Pre Budget Report 2009 – Summary of small business measures

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9th Dec 2009
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  • The Business Payment Support Scheme will be retained for as long as it is needed. (PN01)
  • R & D relief : companies claiming SME R & D relief have previously been required to own the intellectual property deriving from the research and development activity as a condition of claiming the enhanced rate of R & D relief of 75% and the related payable tax credit. Finance Bill 2010 will abolish this requirement, opening up claims to enhanced R & D relief to more companies. (PBRN06)
  • The announcement made in the 2008 PBR of increases in NIC from April 2011 has been revised to make the increase 1% instead of 0.5%. The same increase will apply to both employer and employee contributions, so a total increase of 2% will apply to those drawing salary from their own company. The resulting rates will be : Employee main rate 12%, employee rate over upper limit 2%, Employer rate 13.8%, Class 4 main rate 9%, class 4 rate over upper limit 2%. (PBRN01)
  • From 2011 the earnings threshold and lower profits limit for class 4 will rise to eliminate the effect of the change on those with income of no more than £20,000. The increase will be £570 per annum. (PBRN01)
  • 100% first year allowances will be available on newly registered all electric vans from April 2010, although this will be of limited interest to smaller businesses which can claim AIA on their capital expenditure. (PBRN30)
  • The new flat rate scheme percentages have been published, and once again the opportunity has been taken to adjust some rates to more closely reflect the actual VAT paid by some business sectors. (PBRN33Detailed article on this change.
     

Read Simon Sweetman's view of the changes from the small business perspective.

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