Spring 2009 Newsletter Content Oh for a little hindsight Can't pay, won't pay? Shock in Essex Car tax You signed it Don't be late Age before beauty? IHT and falling prices More paper Shopping around Less paper PAYE or not PAYE... Flat rate scheme A change of heart There are limits Do your duty Free lunch VAT a mess Dissatisfaction guaranteed Don't believe it! Too late Tax on tick £100 note Temp reminder

Car tax The capital allowance rules for business cars change radically on 1 April 2009 for companies and 6 April for income tax traders. New cars bought from then on will receive 20% allowances if their CO2 emissions rating is up to 160g/km, but only 10% if the rating is higher. A 100% first year allowance will continue to be available where the rating is up to 110g/km. For many years, cars which cost over £12,000 have been subject to special rules. The maximum writing down allowance has been £3,000 a year, but a full balancing allowance has been given on sale. So a car costing £80,000 and sold for £50,000 after 3 years would enjoy full tax relief for the £30,000 depreciation. Under the new rules, an expensive car with no private use will receive the full 10% or 20% allowance - but there will be no balancing allowance on sale. The unrelieved expenditure will continue to be written down into the future. The old rules will be retained until 2014 for expensive cars bought before April 2009. That means that there is no rush to sell these cars now in order to trigger the balancing allowance. Overall, the changes are complicated and will make a significant difference to the tax relief on motoring expenditure. If you would like to understand them better, or if you are wondering whether to buy or sell a car before or after the changes, we will be happy to advise you.