Key points from the Pre-Budget Report

The Chancellor, Alistair Darling, announced few real measures in his Pre-Budget package on Wednesday 9 December. With a General Election looming, any proposed legislation has to be fairly non-contentious and short.
The Chancellor announced the following definite changes that may affect the construction trade in the year ahead:

– VAT at 15% will end on 31 December 2009 and the rate will return to 17.5% – for more information on how to deal with this, please see Newsupdate 176.

– The rates of VAT in the Flat Rate Scheme will also increase on that date.

– Empty commercial property with rateable values of up to £18,000 will be exempt from business rates – this extends the relief for a further year and brings a few more properties into exemption.

– The rate of Corporation tax for small companies will remain at 21%.

– NIC – the lower earnings limit for primary Class 1 contributions moves from £95 to £97

– The Business Payment Support Service will be continued – it can be used if you have any concern that you will not be able to pay any tax (CT, IT, PAYE, CIS or VAT) on the due date.

– There is a tiny levy of 50p a month coming in on every landline phone to pay for super-fast broadband

– The fuel benefit charge multiplier is to increase from £16,900 to £18,000 from 6 April 2010.

– The Enterprise Finance Guarantee scheme will continue for another 12 months providing a further £500 million of bank lending to SMEs.
Some other high profile measures were announced which may have an uncertain future given the forthcoming General Election: – An additional 0.5% increase in employee, employer and self employed rates of NIC from April 2011 – with protection for those earning less than £20,000. This will be very costly for everyone.

– Action to support a Housing Recovery Strategy

– Corporation Tax rate for small companies to be 22% in 2011/2012