How Will the Budget Affect Your Business?
There have been many taxation and finance
changes with this year’s budget; here is a
look at the most important of those that
could affect your business.
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Capital Gains Tax (CGT)
The fixed rate of CGT at 18% was
confirmed, with an increase in the tax-free
exemption to £9,600 in the 2008/09 tax year
(up from £9,200).
The much discussed Entrepreneurs Relief for
CGT has been introduced, reducing the
effective rate of CGT to 10% on the first
£1million of gains over a lifetime on
business assets.
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Corporation Tax
The main rate of Corporation Tax has
gone down from 30% to 28%, and the Small
Companies Rate has gone up from 20% to
21% from 1st April 2008.
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VAT
The registration threshold for VAT has gone
up to £67,000 (from £64,000), and the
de-registration threshold up to
£65,000 (from £62,000) from 1st
April 2008.
After 1st April 2009 there will
be a three year time limit on claims for
over-declared or under-claimed VAT.
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Business Vehicles
Road tax (Vehicle Excise Duty D) has
increased from 13th March 2008,
the rates are below; cars registered before
2001 will have their rates raised by £5.
Petrol and Diesel Cars
Band A (up to 100g/km CO2) – No
fee
Band B (101-120g/km CO2) -
£35
Band C (121-150g/km CO2) -
£120 (£5 increase)
Band D (151-165g/km CO2) -
£145 (£5 increase)
Band E (166-185g/km CO2) -
£170 (£5 increase)
Band F (185-225g/km CO2) -
£210 (£5 increase)
Band G (226+ g/km CO2) -
£400 (£100 increase)
From April 2009 the rates will be split into
13 new bands, ranging from no fee to £440.
Buyers of the most polluting cars will have
to pay up to £950 for the first year’s tax
disc.
The tax allowances for company cars will
also change, with the lower threshold for
the 15% company car tax band changing from
135g of CO2 per km to 130g.
Company van fuel benefit has also changed;
the reimbursement of the cost of private
fuel is no longer treated as earnings for
tax purposes.
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Finance
There is a temporary 20% increase in the
amount of money available for loans under
the Small Firms Loan Guarantee scheme; and a
fund of over £12m to encourage more women to
become entrepreneurs.
The government has also lifted a ban on
public sector suppliers using factoring and
invoice finance against the value of the
contracts. This will help smaller businesses
to gain the finance needed to compete for
government contracts.
For more information on Factoring and
Invoice Discounting Services visit our
recommended supplier Ashley Finance here.
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