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Budget 2010 (March) - main points for contractors

Posted Mar 24, 2010

*** This article refers to the main points from the March 2010 Budget. For George Osborne's first Budget (22nd June 2010) - CLICK HERE ***

Budget 2010, which was as strong on political point scoring, as it was lacking in significant announcements, contains few surprises for contractors.

No new changes were announced to VAT, Corporation Tax, Income Tax or Capital Gains Tax.

Unsurprisingly, no mention was made of IR35 (this was a long shot after all).

For general summaries of the speech, try the BBC. For the official paperwork, visit HM Treasury.

General business measures

For small and medium-sized businesses, several announcements were made which may be of interest to the more entrepreneurial reader:

- The Entrepreneurs' Relief lifetime allowance has been doubled to £2m.

- There will be a temporary increase in the level of small business rate relief for 12 months, from 1st October 2010.

- The Annual Investment Allowance for businesses has been doubled to £100,000.

- A new 'Small Business Credit Adjudicator' will be created to ensure small businesses are treated fairly when applying for bank finance.

- Tax relief for the UK video games industry has also been announced, subject to EU approval.

- Various new measures have been announced to further clamp down on tax evasion.

Other relevant announcements

- As we already know, the new 50% income tax rate for incomes over £150,000 will start in April 2010, together with the gradual erosion of the personal allowance from £100,000.

- From 6th April, the annual ISA limit rises to £10,200, half of which can be held in cash.

- The Inheritance Tax Allowance will be frozen at £325,000 until 2014-15.

- Stamp Duty is frozen on properties of £250,000 and under,funded by a new 5% tax on homes costing over £1m.

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