The Chancellor has delivered his Spring Budget and referred to it as a “Budget for enduring growth and jobs”. No doubt you will have read the headlines and received the usual standard summaries of the changes from a variety of professional advisers. At BCG we like to view any change in legislation or budget update as an opportunity for our clients to also achieve “enduring growth” and, as we continue to face tough economic conditions, provide careful planning and management of your resources. We have summarised some of the key issues that may affect our clients below and attach a full budget report, prepared by St James Place Wealth Management, for those of you who wish to read about all the changes in more detail. But more importantly we urge you to get in touch with us to see how we can help you plan for this growth.

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As previously announced we received confirmation of the cut in annual allowance for tax privileged pension saving from 6th April 2011, from £255,000 to £50,000. Also, 50% tax relief on pension contributions is available for additional rate taxpayers (those with assessable earnings above £150,000) but the chancellor has indicated that the 50% income tax rate may be ‘temporary’. Tax relief at 50% may therefore alter at some future stage.
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Qualifying gains are taxed at 10% and many of our clients have taken advantage of this relief in the past. The lifetime limit for relief rises from 6th April 2011 to £10 million for qualifying disposals on or after that date, leaving scope for future tax planning and mitigation.
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This important relief will be reduced from the current limit of £100,000 to £25,000 with effect from April 2012. Early review of your capital expenditure budgets this year will be essential to maximise the advantage from this allowance.
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For those of you with more expensive tastes in company cars the withdrawal of the list price cap of £80,000 from 6th April 2011 is bad news. Again a review of your company car policies is essential to minimise unexpected tax liabilities.
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On the other hand approved mileage allowance payments increase from 40 pence to 45 pence a mile from 6th April 2011. The lower rate of 25p for mileage over 10000 business miles remains unchanged.
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The VAT registration threshold increases to £73,000 from £70,000, with the deregistration threshold increasing to £71,000. Relief for businesses providing samples will be extended to the whole series of samples given to any one business not just the first.
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