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By Huston & Co |
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Old figure |
New figure |
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Tax Rates |
2007/08 |
2008/09 |
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10% tax on taxable income from |
£1 - £2,230 |
10% rate abolished |
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20% tax on taxable income from |
£1 - £36,000 |
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22% tax on taxable income from |
£2,231 - £34,600 |
22% rate abolished |
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40% tax on taxable income from |
£34,601 - upwards |
£36,001 - upwards |
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For a few people with mainly savings income there will remain a 10% starting tax rate on the first £2,320 of income over their personal allowance. However if taxable non-savings income is above this then the 10% rate will simply not apply. What this means is that for most Huston & Co clients the 10% tax rate is history! |
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Basic rate of tax down from 22% to 20% but we all lose the 10% starting rate. |
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Personal tax allowances |
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Personal Allowance |
£5,225 |
£5,435 |
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Allowance if aged 65-74 |
£7,550 |
£9,030 |
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Allowance if aged 75 and over |
£7,690 |
£9,180 |
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VAT |
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Standard rate |
17.5% |
17.5% |
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Turnover limit for registration |
£64,000 |
£67,000 |
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Capital Gains |
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Annual exemption |
£9,200 |
£9,600 |
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Taper relief finishes on 5 April 2008 as announced in October 2007. From 6 April 2008 all gains over the annual exemption will simply be taxed at 18%. Note Indexation Allowance will not reduce CGT bills. |
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For people closing their businesses and selling assets there will be an Entrepreneur's Relief reducing CGT on some assets to 10%. There is a lifetime limit of £1 million of gains which can benefit from this. Note this is a much more limited relief than the wide definition of Business Assets for the outgoing Taper Relief. |
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Corporation Tax |
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Small companies - profits £1 to £300,000 |
20% |
21% |
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Main rate - profits over £300,000, below £1.5M |
marginal rate |
marginal rate |
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Main rate - profits over £1,500,000 |
30% |
28% |
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Small company corporation tax (profits below £300,000) to be 21% 2008/09 and 22% 2009/10. Top rate of CT (for profits over £1.5 million) will drop in 2008/09 from 30% to 28%. |
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Excise Duty |
INCREASE |
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Cigarettes |
11p on a packet |
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Cigars |
4p on a packet of 5 |
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Wine & beer |
4p a pint on beer, 14p on a bottle of wine |
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Cider |
3p per litre |
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Spirits |
55p per bottle |
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Car costs |
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Road tax - cars registered before Mar 01 |
over 1549cc |
Up £5 to £185 |
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Road tax - cars registered before Mar 01 |
under 1550cc |
Up £5 to £120 |
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Road tax - CO2 level 100 and below |
still £nil |
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Road tax - CO2 101-120 |
unchanged at £35 for petrol or diesel cars |
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Road tax - CO2 121-225 |
all bands up £5 |
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Road tax - gas guzzlers CO2 226 and above reg after 23 March 2006 |
up from £300 to £400 |
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Most fuels (increase put back from April to October 2008) |
up 2p per litre |
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Road fuel gas (e.g. LPG) - from 1 Oct. 2008 |
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up 4.28p per kg |
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Other developments |
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For small and medium-sized businesses (most Huston & Co clients) capital allowances greatly improved - a 100% First Year Allowance on investments in equipment bought of up to £50,000 (from 6 April 2008) |
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Writing down allowances drop from 25% to 20% however many smaller businesses with an equipment pool of under £1,000 will be able to claim it all in one year. |
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Reduction from 2009/10 of allowances on more-polluting cars (CO2 levels above 160g/km.) |
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For charities only - gift aid relief will stay calculated as if income tax was staying at 22%. This will maintain levels of Gift Aid relief charities get for 2008/09 to 2010/11. |
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Class 2 self-employed NIC up from £2.20 to £2.30 per week 2008/09. |
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Class 4 NIC on profits above £5,435 at 8% (then 1% on profits over £40,040) - 2008/09 |
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NIC for employees - none payable if pay below £105 per week 2008/09. |
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Inheritance tax threshold up from £300,000 2007/08, £312,000 2008/09, £325,000 2009/10, and £350,000 in 2010/11. Potential of double allowance for couples as announced Oct. 2007 |
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Child benefit for the first child up from £18.10 per week to £18.80 2008/09 and to £20 2009/10. |
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Air Passenger Duty - abolished 31 October 2009 to be replaced on 1 November 2009 by a tax per plane (encouraging airlines to run full planes.) |
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Plastic bags - if shops don't do enough to reduce their use then government will legislate in 2009. |
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CONTENT WARNING |
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This summary is based on what Alastair Darling actually announced in his speech. In the past unpopular changes have been released in the paperwork after the Budget. Check the financial press over the next few days to see if any surprises affect you. |
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Adrian Huston & Felicity Huston |
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Huston & Co Tax Consultants & Accountants |
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481 Upper Newtownards Road, BELFAST BT4 3LL Tel: 028 9080 6080 Fax: 028 9047 1630 |
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E-mail: mail@huston.co.uk Web: www.huston.co.uk Tax articles www.hustontax.com |
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Huston & Co is the trading style of Huston Ltd - reg'd in N.Ireland number NI 63689 |
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