Budget 2009
The Chancellor, Alistair Darling, delivered an historic Budget speech on Wednesday, 23 April 2009, in which he gave details of record levels of public sector debt to the value of £175bn. His forecast for economic recovery was optimistic, hoping for an end to the downturn at the end of this year and predicting growth for 2010 of 1.25%.
 
However, we were disappointed that the Budget failed to address the key issues affecting the UK's struggling businesses and that many of the proposals set out in our strategy for business survival were not adopted by the Chancellor. The FPB's Chief Executive, Phil Orford, issued a statement following the announcement, expressing our frustrations at a Budget that appears to be focused on the next general election rather than taking the opportunity to encourage economic recovery.
 
The main points of the Chancellor's Budget are detailed below: 
 
Credit insurance scheme
 
A 'top-up' credit insurance scheme was announced to assist firms which have had their credit insurance partially withdrawn. Following lobbying from the FPB, the scope of the scheme was increased on 9 June to include companies which have had their insurance withdrawn from 1 October 2008 onwards. 50% will be guaranteed by the Government with the remainder being backed by industry. For further details, click here.
  
Redundancy pay increase
 
The maximum week's pay which is used to calculate the statutory redundancy payment is to increase to from £350 to £380. This will come in to effect with the next Common Commencement Date on 1 October 2009. We called for a statutory redundancy pay freeze and have been lobbying extensively against a move by some MPs to increase statutory redundancy pay even further. For further details, click here. 
 
Capital allowances scheme
 
A temporary increase in capital allowances has been announced. Capital allowances for new investment will be doubled to 40% with effect from April 2009. With this move, the Chancellor is hoping to bring forward business investment to 2009 to provide a boost to the economy. Click here to download a PDF with more information.
 
Off-setting business losses
 
The loss carry-back rules are to be extended for a further year to enable businesses to offset losses against past profits and re-claim any tax previously paid. Trading loss carry-back for businesses will be extended from one to three years for losses up to £50,000, for two years from 24 November 2008 for companies and tax years 2008–09 and 2009–10 for unincorporated businesses. Click here to download a PDF with more information.
 
Car 'scrappage' scheme
 
In order to boost the car industry, a vehicle ‘scrappage' scheme has been announced, which will enable consumers to scrap cars over 10 years old to replace them with new vehicles at a discount of £2,000. £1,000 will be put up by the Government, with the remainder being provided by the car industry.  
 
VAT
 
The standard VAT rate will return to 17.5% from 1 January 2010.
 
Fuel duty
 
Fuel duty will be increased by 2p in September. This will have a massive negative impact on the transport industry which we feel has been let down by the Government yet again. We campaigned for the planned increases for 2009 and 2010 to be scrapped and received confirmation from Mr Darling yesterday that these would both been going ahead. 
 
Savings
 
For the tax year 2009-10, the annual ISA investment limit will increase for everyone aged 50 and over. Individuals will be able to save £10,200 in their ISA, up to £5,100 of which can be saved in cash. This will be extended to everyone from April 2010.
 
The Chancellor, Alistair Darling, delivered an historic Budget speech yesterday in which he gave details of record levels of public sector debt to the value of £175bn. His forecast for economic recovery was optimistic, hoping for an end to the downturn at the end of this year and predicting growth for 2010 of 1.25%.
 
Other measures
 
The Chancellor announced a massive package to support youth unemployment, as well as measures to boost the housing industry. Another controversial announcement was an increase in the higher rate of income tax to 50%. Alcohol duty increased by 2p in the pound at midnight last night and duty on tobacco also went up by 2p.
  
FPB assistance and campaigns
 
Our member helpline is here to help if you require any further information on any of the above changes. Call us on 0845 130 1722. The Campaigns team is always interested to hear your views. You can contact us at campaigns@fpb.org of call us on 01565 634467.