Highlights of 2010 Budget

With the country likely to go to the polls on 6 May, Mr Darling’s third Budget
was predictably as much a political exercise as a conventional set of
announcements.

While many of the measures had been set out in last December’s Pre-Budget Report, there were also some surprises. These included the increased stamp duty land tax rate on residential property over £1 million from 6 April 2011 and the doubling of capital gains tax entrepreneurs’ relief to £2 million only two years after its introduction.

The parliamentary timetable is such that much of the Budget will not become
law before the current session of Parliament ends (12 April for a 6 May
election). Past experience (eg 2005) suggests that there will be a relatively
short and noncontroversial Finance Act rapidly enacted before the election.
A longer and more contentious Bill will then be introduced in the new Parliament, whatever happens at the polls. The Conservatives are committed to introducing another Budget within 50 days of the election if they win.

This year there were over 70 supporting notes with the Budget, demonstrating how many changes need consideration. The most significant of these for businesses included:

• Restriction of higher rate relief for certain pension contributions.
• The new £100,000 annual investment allowance.
• The doubling of capital gains tax entrepreneurs’ relief to £2 million.
• Retention of the 21% small companies’ corporation tax rate.

We hope that this summary proves useful and, if any of the areas discussed seem likely to have an impact on your personal or corporate plans, we would urge you to contact us so that we can help you.