22nd April 2009 BUDGET PROPOSALS
AND CHANGES FOR 2009/2010 previously announced
(Subject to details in the Finance Bill)
Ellis Atkins have taken all due care in the presentation of these notes. No responsibility for loss occasioned to any person or company acting or refraining from action as a result of any material in these notes can be accepted by Ellis Atkins, its partners or staff. Please contact us or your own professional advisor for advice specific to your circumstances.

6 Businesses - Captial Allowances

6.1 The Annual Investment Allowance (AIA) was introduced from 2008/2009 for individuals, partnerships and companies.

6.2 The AIA provides an annual 100% allowance for the first £50,000 of investment in plant and machinery (other than cars) to all businesses, regardless of size.

6.3 Expenditure in excess of the annual £50,000 limit will fall into either a 20% main rate pool or a 10% special rate pool where it will attract writing down allowances at the appropriate rate. From 6th April 2009 (1st April for companies) a 12 month temporary First Year Allowance of 40% is available on plant and machinery that falls in the main rate pool.

6.4 The AIA does not replace the existing 100% enhanced capital allowances schemes for environmentally beneficial plant and machinery.

6.5 Industrial Buildings Allowances and Agricultural Buildings Allowances are being withdrawn over a four year period from 2008/2009.

6.6 From 2009/2010 the rate of capital allowances on qualifying cars will depend on the cars CO2 emissions. Expenditure on cars with CO2 emissions of 160 g/km or less will be allocated to the 20% main rate pool. Those with emissions exceeding 160g/km will be allocated to the 10% special rate pool.

7 Businesses – Loss Relief

7.1 Currently an unlimited amount of trade losses can be carried back to the previous year and receive tax relief.

Unincorporated business trade losses made in 2008/2009 and 2009/2010 (and company trade losses with accounts periods ending between 24th November 2008 and 23rd November 2010) may be carried back a further two years, subject to a £50,000 cap.

7.2 Furnished Holiday Lettings

From 2010/2011 losses from furnished holiday lettings will no longer be able to be set against other personal income.