The pre budget report announced on Monday 24th November 2008 included the following key changes, if you have any queries or wish to discuss further, please contact us.

VAT The main rate of VAT currently 17.5 % has been changed with effect from Monday 1st December 2008 to 15 %. If you charge VAT on your goods and services, you must change the rate you charge effective from this date.

The change in VAT will also affect the flat rate scheme and the fuel scale charges currently in place.

National Insurance Employers and employees National Insurance contributions are proposed to increase by ½ % from 2011. The government have stated that they will also align the bandings to be the same as the Income Tax band at the time of the increase.

Income Tax The changes made to Income Tax personal allowances following the removal of the 10% band are to be a permanent change and are proposed to increase from 6th April 2009.

Earners between £100,000 and £150,000 gross income will see a reduction in their personal allowance from 2010 and those earning over £150,000 will have no entitlement to a personal allowance.

There is a new 45 % Income Tax rate proposed from 2011 for those earning over £150,000.

Businesses There is no proposed increase to the small companies rate of Corporation Tax from the 1st April 2009, this will remain at the current 21 %.

Businesses with an accounting period ending between 24th November 2008 and 23rd November 2009 can carry back losses up to £50,000 for 3 years as apposed to the current 1 year.

Benefits Child Benefit is increasing to £20 for the eldest child effective from 1st January 2009.

Pensioners will receive a one off £60 payment on 1st January 2009.

Child Tax Credits child element is increasing by £75 above indexation from 6th April 2009.