Recessionary measures?
The big news on recessionary measures wasn't so much help being offered
to those suffering genuine hardship, as the tax rises announced for high
earners from April 2010 will go towards putting the economy back onto
a sustainable footing.
On the plus side, the Chancellor confirmed the Business Payment Support
scheme will be extended. 100,000 taxpayers in financial difficulties have
deferred £1.8 billion across all the taxes, and the extension beyond the
current six month limit is welcomed.
Less happily, we didn't see much additional help for businesses making tax
losses. As things stand, such businesses can carry back as much tax loss as
they like to the previous year (assuming that the previous year was
profitable), and £50k for three years. This £50k 3 year carry-back relief
has been extended to losses being made this year as well. Although the
£50,000 carry-back is nice, it's only worth around £10k in cash tax for
most, and so isn't nearly enough to make a difference. Many had hoped to see
the amount of loss available for 3 year carry-back being increased, but will
be disappointed.
Finally, the Chancellor announced the doubling of tax allowances for capital
assets to 40% for the current tax year. This will be of absolutely no
benefit to those making losses, and worth very little to the profitable
because the net present value is next to nil.
