Pre Budget Report 2009- Contractors breathe again
Chancellor Alistair Darling delivered his Pre-Budget Report 2009.
Thankfully,Professional Contractors and Freelancers with limited companies can breathe a sigh of relief! Past mutterings such as the income shifting legislation are still just that, there are no major changes to report.A consultation will get underway in the New Year between HMRC and the Department for Business to look at National Minimum Wage Regulations to tackle the problemof arrangement known as “Travel Schemes”. These schemes enable travel expenses to be paid under the travel rules to a temporary workplace and are free of Tax and NICS.
Where a worker is paid at or near to NMW rates, the workers entitlements to earnings related to social security benefits are impacted as earnings are reduced by the amount of travel expenses.
This consultation may have a future impact on agencies supplying workers on low wages.The highlight for Personal and Small Business implications are as follows:
· Small Business Corporation Tax Rate remains at 21%
· New increased rates for the VAT Flat Rate Scheme from 1st January 2010
· VAT Standard Rate returns to 17.5% on 1st January 2010
· VAT Cross-Border changes effective 1st January 2010
· The introduction of a 10% rate of Corporation Tax for company income derived from UK patents
· All National Insurance Contribution raise an additional 0.5% on the proposed 0.5% totalling a 1% increase effective April 2011. This will not apply to incomes of £20,000 and below.
· Stamp duty holiday expires 31st December 2009
· Working Tax Credits increase April 2010
· Child Benefit and Disability Benefit increase by 1.5% April 2010
· State Pension increase of 2.5% April 2010
· Introduction of 50p monthly tax on telephone landlines to finance broadband super infrastructure
· The £43,000 threshold for lower rate tax frozen for 2010
· Inheritance Tax threshold frozen at £325,000
· Fuel duty rates increase by 1p April 2010
· No increase in alcohol and tobacco duty
· And for Bingo players a 2% Tax cut!
Please download our Pre Budget Report 2009 for all the detail.