Pre-Budget Report Highlights

The Good...

Good news for SMEs: The Chancellor has postponed the planned 1% increase for Corporation Tax for small companies until April 2011.

Further good news for any company struggling to pay its taxes: the HMRC has extended its scheme to give businesses with temporary financial difficulties to have more time to settle their liabilities.

The Chancellor has also announced the creation of the £500m Growth Capital Fund, which will target growing companies seeking investment of amounts between £2m and £10m.

The Enterprise Finance Guarantee Scheme, which has been helping companies that would otherwise not get bank loans, has been extended for another 12 months.

The Chancellor has proposed a new lower rate of Corporation Tax of 10% for profits derived from patents.

Boiler scrappage scheme: a bad day for "old boilers", the scheme will help up to 125,000 households upgrade to a more efficient boiler, with a £400 incentive.

The Bad...

The Chancellor confirmed the expected reversion in the level of VAT to 17.5% from 1st January 2010.

There is a new 50p per month duty on all landlines, which will be used to develop superfast broadband services further.

The Stamp Duty holiday for residential properties up to £175,000 in value will end as planned on 31st December 2009.

The Chancellor has decided to freeze the inheritance tax allowance at £325,000 for the next year instead of increasing it as planned to £350,000.

National Insurance Contribution rates are going up by 0.5% for those earning over £20,000 p.a. This is payable by the employers and the employees.

There will be a freeze on the higher rate income tax threshold from 6th April 2012.

The Ugly...

Bank employees receiving a bonus in excess of £25,000 are to be the subject of a new 50% "Bank Payroll Tax". This will be payable by the bank. This takes effect today, and will remain in place until 5th April 2010.