ASE's senior tax manager Liz Gallagher gives ASE's opinion on today's budget and what it will mean for dealers.

"As many financial commentators predicted, Chancellor Alistair Darling has played safe in his last budget before the forthcoming general election. This budget will certainly be remembered as the non budget with a minimal number of changes being made to our taxation system.

"There was however one good piece of news for motor dealers who will be undertaking capital expenditure in the coming months. With effect from 1 April 2010 all eligible businesses will be able to claim a 100% deduction for the first £100,000 of expenditure on plan and machinery.

"This is referred to as the Annual Investment Allowance, with the current level being just £50,000. It is worth noting however that groups are unlikely to benefit from these changes as the AIA is divided by the number of associated companies!

"Another benefit for a limited number of dealers who are looking to sell their business, is that Entrepreneurs Relief, which allows the first £1m of gain to be taxed at 10% will rise to £2m with effect from 6 April 2010. Any gains in excess of this amount will be taxed at the current capital gains tax rate of 18% thus giving an £80,000 tax saving for dealers lucky enough to make a gain of £2m!

"On a brighter note, there have been no increases in the rates of income tax, corporation tax, capital gains tax or VAT other than those previously notified. Now is a good time to remind dealers who will be affected by the new 50% rate of income tax for those with taxable incomes over £150,000, that they have just days left to pay themselves a dividend or additional bonus prior to the rate going up!"