FOR many the 2009 Budget appeared to be the work of a fictional author, with widely imaginative predictions for our economic future and equally incomprehensible levels of predicted future public sector borrowing and debt.

At first sight there appeared little, in real terms, to support businesses and similarly no real blows other than the changes to the higher rate of tax. Where then, does this leave the business community? Can we afford to put the Budget 2009 on the back burner?

The answer is a resounding no, with the words 'caution' and 'do so at your peril' sounding out as you may miss out on the few beneficial announcements if ignored and the threat of increased tax demands or even financial penalties.

Perhaps the headline news was the announcement that those earning in excess of £150,000 will have a new tax rate of 50 per cent which will be introduced in 2010.

A more positive announcement was the doubling of capital allowances to 40 per cent for businesses investing more than £50,000 in plant and machinery. At present, just about all standalone businesses can claim a 100 per cent capital allowance deduction for the first £50,000 of qualifying expenditure in an accounting period. Above this the rate of tax relief fell to 20 per cent. This is now 40 per cent. This will be available to businesses incurring such expenditure in the twelve month period beginning April 1, 2009 for corporation tax and post April 6, 2009 for income tax, for one year. Undoubtedly it must be worthwhile businesses assessing their short to medium term capital asset requirements while this incentive is available.

There was some help for those businesses experiencing trading losses. The trade loss carry-back provisions allow businesses making losses to carry them back twelve months against profits to secure a tax repayment. The loss carry back period has been extended to allow losses of up to £50,000 to be carried back up to three years.

Pensions, as ever, were on the agenda not least with the Chancellor's announcement that tax relief on pension savings will be restricted to the basic rate from April 6, 2011 for those with a taxable income of £150,000 or more. He also announced anti-forestalling measures which will prevent those potentially affected from seeking to forestall this change by increasing their pension savings in excess of their normal regular pattern prior to the restriction.

To balance the books, the Chancellor will be looking to ensure he gets the tax take the government is due. This is demonstrated by new HMRC powers and penalty provisions which demonstrate that HMRC are getting even tougher with tax payers with increased penalties and fines for late payers and those failing to compile or provide accurate information and complete returns.

In summary, the Budget 2009 has highlighted the need for individuals and businesses to ensure they receive timely and concurrent advice on tax matters and tax planning from tax professionals.

Chris Connor, Corporate Tax Director, Streets Chartered Accountants, a Top 40 UK accountancy firm. Call (01476) 590838 or email info@streetsweb.co.uk or visit www.streetsweb.co.uk