The PBR roundup

Posted by Janice McGinn in on Wed, 09/12/2009 - 15:16

Darling used his Pre-Budget Report speech to the House of Commons to set out his stall for the forthcoming general election, including a populist measure to tax annual bonuses above £25,000 and anti-avoidance measures to “protect” £5bn in tax revenue.

The detailed documents that emerged from the Treasury and HMRC provided more illumination on the following key issues for small businesses and their advisers:

Live coverage and reaction
Follow a live transcript of Alastair Darling’s speech as it happened, with lively commentary from Rebecca Benneyworth, Richard Murphy, Mark Lee, Charlie Mullins, the Pimlico plumber and other AccountingWEB.co.uk and BusinessZone members.

Summary of VAT measures: Standard rate returns to 17.5% next year
As planned, the temporary 15% rate of VAT will end on 31 December 2009. The VAT Flat Rate Scheme rates have been re-calculated to reflect the switch back to 17.5% from From 1 January. A “period of grace” will be allowed for businesses such as pubs that trade across the midnight deadline.
Bonus clampdown threshold set at £25,000
As widely predicted, Chancellor Alistair Darling unveiled a “supertax” on bonuses about £25,000. Accountants differed on whether it would be a one-off or a permanent measure or a permanent one, and the ultimate effect it would have.
 

The Bottom Line:If Mr Cable has his way...

"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more

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