Comment by Sally Grimwood, Tax Director, Deloitte
The big news on recessionary measures wasn't so much help being offered to those suffering genuine hardship, as the tax rises announced for high earners from April 2010 will go towards putting the economy back onto a sustainable footing.
On the plus side, the Chancellor confirmed the Business Payment Support scheme will be extended. 100,000 taxpayers in financial difficulties have deferred £1.8 billion across all the taxes, and the extension beyond the current six month limit is welcomed.
Less happily, we didn't see much additional help for businesses making tax losses. As things stand, such businesses can carry back as much tax loss as they like to the previous year (assuming that the previous year was profitable), and £50k for three years. This £50k 3 year carry-back relief has been extended to losses being made this year as well. Although the £50,000 carry-back is nice, it's only worth around £10k in cash tax for most, and so isn't nearly enough to make a difference. Many had hoped to see the amount of loss available for 3 year carry-back being increased, but will be disappointed.
Finally, the Chancellor announced the doubling of tax allowances for capital assets to 40% for the current tax year. This will be of absolutely no benefit to those making losses, and worth very little to the profitable because the net present value is next to nil.
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