In case you aren’t abreast with the news. VAT rates are changing in the UK, with an aim of increasing consumer spending in the “credit crunch”
Here are some “high-lights”
Happening Now:
The VAT rate is to be cut on 1 December from 17.5 per cent to 15 per cent until the end of 2009.
The proposed increase in the small companies’ rate of corporation tax to 22 per cent from next April has been postponed for one year, thus the current rate of 21 per cent will apply for the 12 months to 31 March 2010. The main rate remains unchanged at 28 per cent.
From Monday just gone, all companies (and from 2008/09, unincorporated businesses) will be able to carry back trading losses (up to a cap of £50,000) to relieve taxable profits of the previous three years. This rule will apply for one year only. The current one year carry back rule is not restricted.
Small and medium sized companies will be allowed to spread business tax payments to help ease cashflow and credit constraints.
Starting in April 2009
Income tax personal allowance will be £6,475.
Also, the NIC upper earnings limit will be aligned to the higher rate band for income tax purposes.
Starting in April 2010
People earning over £100,000 to have personal tax allowances brought into line with those on middle incomes. Personal allowances are to be abolished completely for those earning over £140,000.
Starting in April 2011
Income over £150,000 will be charged at the new tax rate of 45 per cent.
All NIC rates to be increased by 0.5 per cent for employers and employees. Also from April 2011, the top rate for Class 4 NIC’s will increase to 8.5 per cent (normal rate) and 1.5 per cent (higher rate).
And Piet Jonas has released a simple App for the IPhone to calculate your VAT on the fly. Get it from the app store or here
