Highlights from the 2010 budget

• Business rate taxes for SMEs reduced for one year starting from October 2010
• Small business to be given a new credit adjudication service to which complaints can be made about loan refusals
• Entreprenuers to received an increased threshold of £2m on which they will pay 10% capital gains tax instead of the main rate at 18%
• Tax relief on plant and machinery doubled to £100,000
• Stamp duty threshold for first-time buyers has been doubled to £250,000
• Stamp duty rise to 5% for homes costing £1m or more
• Fuel duty will rise by 1p in April and by a further 1p in January
• Public spending will rise by 2.2% as planned
• Inheritance tax threshold frozen for next four years
• RBS and Lloyds Group who are now part-owned by the government told to make £94m available in new business loans with nearly half going to small businesses

Tax rates and thresholds

• the basic rate will remain at 20 per cent
• and higher rate will remain at 40 per cent
• the additional rate will be set at 50 per cent
• the basic rate limit will remain at £37,400
• the starting rate limit for savings will remain at £2,440
• the personal allowances will remain at their 2009-10 amounts
  

From 2010-11 the additional rate will apply to taxable income above £150,000.

From 2010-11 the amount of the Personal Allowance will be gradually withdrawn for all individuals (regardless of age) with adjusted net incomes above £100,000. The rate of reduction is £1 for every £2 above the income limit.

In Budget 2009, the Chancellor announced that the Furnished Holiday Lettings (FHL) rules would be withdrawn from 6 April 2010, (or from 1 April 2010 for companies). The legislation for this is in Finance Bill 2010. This will mean the tax treatment of FHL will be the same as for other property rental businesses.

For the financial year commencing 1 April 2010 the small profits rate of Corporation Tax remains at 21 per cent for all profits apart from ring fence profits and 19 per cent for ring fence profits.

For the financial year commencing 1 April 2011 the main rates of corporation tax are set at 28per cent for all profits apart from ring fence profits and 30 per cent for ring fence profits.

Visit http://www.hmrc.gov.uk/budget2010/index.htm for HMRCs full budget report