Peterborough accountants’ Budget reaction (plus download the whole speech)

HIGHLIGHTS of the 2009 Budget as it affects businesses:

Main capital allowance rate increased to 40%.

£750m to help new technologies and strategically important regions.

Loss-making companies will be able to reclaim more tax paid during the last three years, until November 2010.


£1bn support financing for low-carbon industries.

£435m support for energy efficiency schemes in buildings.

£405m to encourage low-carbon energy and green manufacturing.


Fuel duty will rise 2p in September then 1p a litre each April for four years.

Car scrappage

From next month there will be £2000 rebate on a new car if it replaces a scrapped old one.

Employment funding

Support to protect 500,000 jobs.

Funding of £250m to get people work experience in growth industries.


Growth expected in 2010, up to 1.25%

Annual growth from 2011 up to 3.5%.

Public borrowing will rise to £175bn this year then fall to £97bn over the next four years.

If you run a business that will be affected by the Budget or its impact on the economy, please add your comments to the story. If you are an accountant or economist, please give readers your views in the comment box below.

To read the entire Budget speech, right-click here and select ‘Save As’.

3 Comments on "Peterborough accountants’ Budget reaction (plus download the whole speech)"

  1. The Chancellor’s predictions for recovery and future economic growth of 3.5 per cent over the year have already been seen as very optimistic by the markets.

    The current debt level of government borrowing of £175 billion is unsustainable and will lead to raising tax levels and inevitable cuts in services after the election.

    The 50% income tax rate for high earners above £150,000 will lead to more using advanced tax products already available to the market.

    The temporary 40 per cent capital allowance rate and the 3 year loss claim will help business. The £1.7 billion job creation package the unemployed.

    The confidence in the markets, banks lending to businesses and the recovery in the housing market may take longer than the Chancellor predicts.

    Mark Wrigley, FCCA, GreenStones

  2. The high earning London commuters living locally are going to be hit hard by the double hit of 50% income tax on earnings above £150,000 from April 2010, plus the restrictions on higher rate tax relief on pension contributions from April 2011.

    Many local businesses are struggling at present and the announcement for those that are loss-making will be well received. They will be able to reclaim more taxes paid in the last three years until November 2010.

    I have worked with several local businesses to receive Research and Development tax credit claims. In conjunction with the £405m investment to encourage low-carbon energy and advanced green manufacturing many of these projects will promote a reduction in our carbon footprints.

    The £3,000 increase in the annual limit for tax-free ISAs to £10,200 for over-50s this year and for everyone else next year, will be a welcome tax break for pensioners and savers alike.

    Businesses’ main capital allowance rate for qualifying plant and machinery has been doubled to 40% for one year to encourage firms to bring forward investment.

    Kevin Edwards, tax principal designate, MacIntyre Hudson

  3. Chancellor, Alistair Darling, took about 50 minutes to tell us a story about how the world got in such an economic mess and what has already been done about it. He downgraded many of his forecasts and pledged a big increase in public borrowing – indeed, record levels of borrowing. But are any of his forecasts believable?

    Peterborough businesses may gain some benefit from the doubling of tax relief on purchases of capital equipment (for one year only) and may get back tax paid in the last 3 years if they are now making losses. But from next April (one year early), those earning more than £150,000 will pay tax at 50% and, from the following April, similar earners will lose the benefit of higher rate tax relief on amounts paid into pensions. Then again, these are the people who avoid significant amounts of tax by seeking advice from tax experts!

    Ken Craig, tax partner, Rawlinsons

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