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 Was it really the ‘Budget for jobs’ as some corners of the press have suggested? We’ll take you through the key points of how the April 2009 Budget affects business and employment.
When Chancellor Alistair Darling gave his Budget speech last month, it painted a pretty gloomy picture of the financial state of the country. The economy is expected to shrink by 3.5% in 2009, public borrowing will increase to a staggering £175bn this year and the Retail Price Index will get as low as –3% by September. We think you’ll agree that overall, this isn’t great news.
However, as we’ve mentioned, there are some small yet potentially highly significant signs that there is some light at the end of the fiscally turbulent tunnel we find ourselves in.
With bank bailouts, multinational collapses and massive pension payments dominating the headlines over the past six months, the real future of business in this country is the small to medium sized company who, while may be finding things harder than they did 18 months ago, can weather the storm with sensible practises across all aspects of the organisational structure and only making cutbacks where absolutely necessary.
The headline facts from the April 2009 Budget that affect businesses are as follows –
- From a date yet to be announced, believed at the time of writing to be February 2010, the limit on a week's pay for the purposes of making statutory redundancy payments will rise from £350 to £380.
- The HMRC Business Payment Support Service, which helps businesses spread their tax payments over a more convenient timeframe, will be expanded. Businesses expecting to make losses in accounting period or tax year 2009-10 will be allowed to offset them against corporation and income tax bills due on profits from the previous period or year. Businesses may now be able to reduce their upcoming tax payments.
- The three-line account limit is being increased from £30,000 for trading or self-employment income and £15,000 for property income to permanently align it with the VAT registration threshold of £68,000 from the tax year 2009-10. Smaller businesses may now be able to restrict the information they provide in their tax return to just turnover, total allowable business expenses and net profit or loss.
- From 1 May 2009, the VAT registration and de-registration thresholds will increase to £68,000 and £66,000 respectively.
- From 2010-11, an additional 50% rate of income tax will be introduced for those earning over £150,000 a year.
- From 6 April 2011, tax relief on pension contributions will be restricted for those with incomes of £150,000 and over, and tapered down until it is 20 per cent.
- Changes will be made to the company car tax regime from 2011-12. In particular, the lower threshold for carbon dioxide emissions will decrease from 130 grams per kilometre (g/km) to 125g/km and the £80,000 price cap that applies when working out the cash equivalent of the car benefit will be abolished.
These direct facts relating to your business notwi
thstanding, the government’s short-term focus is on supporting employment and jobs through the downturn, while doing more to prepare Britain for the economic recovery.
Some of the measures introduced include –
- Government support to protect 500,000 jobs
- Extra funding to the tune of £1.7bn for the Job Centre network
- Extra support for people who have been out of work for 12 months
- From January 2010, all under-25s out of work for a year will be offered a job or training place, with extra money on top of benefits for those in training
- £250m funding to help people get work experience in growth industries
For more information and advice on these issues and for your upcoming summer recruitment needs, please call the specialists at Forties People on 020 7329 4044, or visit us online at www.fortiespeople.com.
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