Budget 2010 – perhaps no news is good news?!
24/03/2010
As many financial commentators predicted, Chancellor Alistair Darling has played it safe in his last budget before the forthcoming general election. This budget will almost certainly be remembered as the ‘non budget' with very few changes being made.
For motor dealers, there were only two real points of interest:
Good news for dealers undertaking capital expenditure
From 1 April 2010 all eligible businesses will be able to claim 100% deduction for the first £100,000 of expenditure on plant and machinery (previous limit was £50,000). This is referred to as the Annual Investment Allowance. It is worth noting however that groups are unlikely to benefit from these changes as the AIA is divided by the number of associated companies.
Good news for dealers looking to sell their business
From 6 April 2010 there is an increase in the Entrepreneurs Relief threshold. Currently, the first £1m of gain is taxed at 10% but this will rise to £2m. Any gains in excess of this amount will be taxed at the current capital gains tax rate of 18% thus giving an £80,000 tax saving for dealers lucky enough to make a gain of £2m!
And finally...
Now is a good time for dealers with taxable incomes over £150,000 to remember the impending new 50% rate of income tax ... and to consider whether to pay themselves a dividend or additional bonus in the final few days before the rate rise!