[Angela]

# Basic rate of income tax to fall from 22p to 20p from April next year.

# Lower starter rate of 10p to go, meaning all those who pay income tax will start at 20p in the pound - meaning little difference likely to take-home pay.

# Top-rate income tax threshold will rise to £43,000 from April 2009.

CIGARETTES AND ALCOHOL

# Beer will rise by 1p a pint from midnight Sunday, cider by 1p a litre, wine by 5p a bottle and sparkling wine by 7p. Duty on spirits will be frozen.

# Cigarettes to rise by 11p a packet. VAT on nicotine patches and similar products to be cut from 17.5% to 5%.

TRANSPORT

# Fuel duty up 2p per litre from October, in line with inflation.

# Putting VAT on airline tickets ruled out.

# Road tax on highest-polluting vehicles up to £300 and to £400 from April next year.

# The least-polluting vehicles to have their duty cut to £35.

EDUCATION, FAMILIES AND HEALTH

# Child benefit, for a first child, will rise from £17.45 a week to £20 a week by 2010.

# Some 50,000 16 to 17-year-olds who sign activity and learning agreements to receive a training wage in return for gaining skills.

# The £40-a-week in-work bonus paid to lone parents to be extended to their first 12 months in work.

# Education spending in England will rise from £60bn this year to £74bn in 2010. From now to 2010 spending per pupil rise by a further 20% - 10% cent in real terms - to £6,600

# Public investment in science will rise from £5bn this year to £6.3bn by 2010/11.

# Investment in the NHS in England to rise by £8bn this year.

INHERITANCE/CAPITAL GAINS

# Tax exemption for capital gains will rise from £8,800 to £9,200, and will be £18,400 for married couples.

# Inheritance tax will threshold to rise from £285,000 now to £350,000 in 2010.

PENSIONERS

# Tax-free allowance for pensioners under 75 will rise in three stages from £7,280 to £9,770 in 2011. For over-75s, the tax free allowance will rise annually from £7,420 to by £10,000 by 2011.

# Grants of between £300 and £4,000 for pensioners installing insulation and central heating in their homes.

# All the 125,000 people who lost their pensions because of company insolvency will get help with a financial assistance scheme increased from £2bn to £8bn.

ENVIRONMENT

# Until 2012 all new zero carbon homes up to £500,000 will be exempt from stamp duty.

# The landfill tax will rise by £8 each year from April 2008.

COMPANIES

# Corporation tax will be cut from 30p to 28p from April next year.

# Tax rate on small companies to be raised in three stages from 20p this year to 22p in 2009.

THE ECONOMY

# Mr Brown said the British economy was growing faster than all the other G7 economies.

# Inflation will be on target in 2008 and 2009, according to forecasts.

# In the last year investment has grown by 6%, business investment by 7%, and inward investment by 10%. Business investment is forecast to rise again by more than 7% this year.

# In the last year employment has risen, with 220,000 more men and women in work.

# In 2008, Britain's growth will be the highest in the G7, between 2.5% and 3%.

# Britain's net borrowing, which in the early 1990s went as high as 8% of national income is this year just 2.7%. It will fall to 1.4% by 2012.

GOVERNMENT SPENDING

# Asset sales will rise from £18bn to £36bn, including a £6bn sale of the student loan book and further financial and corporate sales at home and overseas.

# Investment in schools, hospitals, security and defence and infrastructure will rise from £43bn this year to £60bn by 2012.

# Total government spending will rise to £674bn by 2010/11.

# An extra £400m to be allocated to the Ministry of Defence to cover overseas commitments in Iraq, Afghanistan and elsewhere.

Below inflation spending settlements for some departments: Work and Pensions; Revenue and Customs; Cabinet Office; Treasury; Department for Constitutional Affairs; Attorney General's Office.

# Efficiency savings of 3% each year to mean the government can release £26bn a year by 2010/11 for frontline services.

INTERNATIONAL DEVELOPMENT

# £50m for a 10-country initiative across central Africa to prevent the destruction of the second largest rain forest in the world.

# £800m to the Environmental Transformation Fund, jointly run by the international development and environment secretaries.

Source: BBC

[fionaB]

have to laugh at the increase in child benefit.. this was brought in to reduce child poverty! lololol and it will take two years to get a rise of £2.55............. yet he can find £400 million for the MoD..................not sure how they can say that losing the 10p lowest threshold tax and dropping the 22p to 20p will mean hardly any difference in the take home pay............ surely that means my tax will double?


Fi

[Angela]

Q&A: What the Budget means to you


Will you be richer or poorer as a result of the budget?

Chancellor Gordon Brown has just delivered what could be his last Budget. What impact will the changes have on the personal finances of millions of Britons?

I am in work, what is in the Budget for me?

The big news is that the basic rate of income tax has been cut by 2p to 20p from April 2008.

At the same time, the 10p income tax rate on the first £2,150 earned (2006/2007 tax year) above your personal allowance is being abolished.

This means in effect that you will have to pay 20% as soon as you earn more than your personal allowance rate.

Overall, many people may find they are not better off.

I am a pensioner, what is there for me?

Many will be cheered by the news that income tax personal allowances will rise dramatically.

For those under the age of 75 the tax free allowance will rise in stages from £7,280 to £9,770 in 2011. This may offset the extra cost due to the abolition of the 10% income tax rate.

The Pension credit guarantee will rise to £130 by 2010.

People who have lost their retirement savings when their company pension scheme went bust received a welcome boost.

The chancellor pledged that the amount of money being made available to the Financial Assistance Scheme - which pays money to people who have lost their pensions - would quadruple from £2bn to £8bn.

Recently, the government has faced a high-profile campaign to force it to compensate people who have lost their pensions.

We drive a gas-guzzling people carrier, will the Budget mean extra expense?

Yes it will.

The Chancellor has upped Vehicle Excise Duty (VED) on the highest polluting vehicles, including many people carriers and 4x4s.

The annual cost of VED for the most polluting vehicles will rise from £210 to £300 this year and then £400 in 2008.

Further pain could be on the way. In the past two Budgets the chancellor has raised VED on the most-polluting cars by far more than inflation.

Now may be the time to switch to a less polluting car.

As part of the government's carrot and stick approach, vehicles with smaller engines in the lowest polluting categories will pay lower VED.

Vehicles in band B will see VED cut by 30%.

A 2p increase in petrol duty has been deferred until October.

I am concerned about the environment, is anything new being done?

The environment is one of the hot political topics of the moment.

All three main political parties are keen to highlight their green credentials.

Recently, the Conservatives proposed that people who take more than their fair share of flights to pay more tax - in effect, proposing a "polluter pays" approach.

The chancellor has taken a different approach, trying to offer sweeteners for people to adopt a more green lifestyle.

For example, extra grants will be available to pensioners installing insulation.


I am a saver, is there any reason for me to celebrate?

Yes the amount of money you can pay into a cash Individual Savings Account (ISA) will rise from £3,000 to £3,600.

More than 16 million Britons have an ISA.

I am on a low income, what extra is on offer?

Tax credits are the main method that the chancellor wants to "make work pay".

Working tax credit, claimed by 1.5 million Britons, will receive a £1bn boost.

The chancellor said the average working tax credit claimant would be £7.10 per week better off as a result.

Lone parents will get a weekly bonus for their first year in work.


I have children. What extra help is available to me?

Child benefit will rise 15% by 2010.

In the pre-Budget report, the chancellor announced additional child benefit that would be paid to mothers with new babies.

In April, benefit payments for the poorest children will rise to £64 a week.

Investment in education has been marked out as a priority for a possible future Brown premiership.

In addition, greater investment is being made in apprenticeship schemes. This could boost your children's prospects of finding employment when they leave school.

Is there anything else?

The Inheritance Tax ( IHT) threshold will rise to £350,00 by 2010.

Previous Budgets had set in train an increase in the IHT threshold to £325,000 by 2009.

The duty on beer and wine is set to rise in line with inflation but duty on spirits is frozen again.


Source: BBC

[Dave]

# Until 2012 all new zero carbon homes up to £500,000 will be exempt from stamp duty.

Do they exist ?? ....if so I want one....that will save me £20K !!! ...ok £15K if £499,999

[fionaB]

<<<For those under the age of 75 the tax free allowance will rise in stages from £7,280 to £9,770 in 2011. This may offset the extra cost due to the abolition of the 10% income tax rate>>>


since when was the tax allowance £7280????????
its only £5030

Fi

[Matt F]

Originally Posted by fionaB

<<<For those under the age of 75 the tax free allowance will rise in stages from £7,280 to £9,770 in 2011. This may offset the extra cost due to the abolition of the 10% income tax rate>>>


since when was the tax allowance £7280????????
its only £5030

Fi

They vary by age. For the year 2006/07 they are:

Personal (basic) 5,035

Personal (65-74) 7,280

Personal (75 & over) 7,420

Matt.

[fionaB]

ok so are we getting an allowance rise?

Fi

[Markulous]

# Until 2012 all new zero carbon homes up to £500,000 will be exempt from stamp duty.

Do they exist ?? ....if so I want one....that will save me £20K !!! ...ok £15K if £499,999

Think you need to burn it down then get someone to cart off the black bits!

Actually, those homes with photovoltaic cell panels on the roof are pretty near zero carbon (and one of the big home builders have a couple of estates with all the houses fitted out - sell electricity to the National Grid!)

[Matt F]

2007/08 2006/07
- under 65 5,225 5,035
- 65 – 74 7,550 7,280
- 75 and over 7,690 7,420

Don't forget though that he is also increasing the upper earnings limit sp that it ties in with the income at which you hit 40% tax. This will see it move from £645 per week to £800 per week by 2009. So you will pay an extra 11% on that difference - if you are earning that much.

A lot of it was giving with one hand and taking with another e.g. basic rate tax down to 20% but then the abolition of the 10% rate. Apparently lower earners can claim back what they lose here via tax credits - but what's the point in taking it in the first place only to have to fill forms to get it back , to mention nothing of the cost of actually administering all this. I'll tell you why he does this - it's because he can't bear the thought of EVERYONE being able to take advantaqe of the 10% rate.

Not happy about the small companies corporation tax being increased from 19% to 22% over the next 3 years - big companies corp tax has gone down by the way. A lot of small companies struggle as it is so I can't see how increasing their tax burden is going to help.

Again - the reason he has done this is because he hates the thought of one man companies (like mine) paying some profits via dividends thereby avoiding NI. He has already tried to stop this via IR35 and has also now (in the budget) outlawed managed service companies (largely IT contractors working through the likes of Giant, taking dividends without being directors) - ammusingly this has lead to companies house being unable to cope with the number of new Ltd Company applications

Anyway - because there is no real way of stopping free-lance workers from setting up and working through their own Ltd Co's (paying dividends) he is now increasing the small companies rate so that he gets ultimately 22% of our company profits rather than the 19% he gets now. Thanks a lot Gordon - typical sledgehammer solution that will no doubt cause a lot of struggling small businesses to fail.

Of course he's not the only one who can rob Peter to pay Paul - I may well decrease my salary (pay myself a proper amount presently) which will see me pay less NI to offset the increase in Corp Tax

Matt.