Budget
Summary
March
2008 |
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| Difficult
economic conditions and a raft of earlier announcements meant
that Alistair Darling's debut Budget contained few surprises.
In the 2007 Budget, Gordon Brown had already trailed the main
changes to income tax and corporation tax. Similarly,Mr Darling's
Pre-Budget Report of last October heralded revision of inheritance
tax and, more controversially, reform of capital gains tax and
the treatment of non-domiciliaries. |
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| The
largest single tax-raising measure that was newly announced
on Budget Day was the increase in alcoholic duties of 6% above
inflation. There was the usual range of anti-avoidance legislation,
attacking everything from stamp duty land tax schemes to those
involving corporate intangible assets. However, the Chancellor
chose to delay the rules targeting ‘income splitting' until
next year's Finance Bill, even though draft legislation has
already been issued. |
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This
was never going to be an exciting Budget, but that does not
make it uneventful: HMRC issued no fewer than 107 Budget Notes
detailing changes. Simplification of the tax system, which
Mr Darling has said he wants to see, remains a distant goal.
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Budget
highlights |
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The
basic rate of tax will fall to 20%. |
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The 10% starting rate band will
apply only to savings income. The net effect will be to
abolish the 10% band for all but those with very low levels
of earnings and/or pensions. |
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The new capital gains tax regime,
including an 18% flat rate and the entrepreneurs' relief, will
start on
6 April 2008. |
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The controversial rules for
non-domiciliaries will also come into effect, broadly as previously
announced, on
6 April 2008. |
* |
The main rate of corporation
tax will fall to 28% from 1 April 2008, and the structure of
capital allowances will be revised. |
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The maximum investment in an
enterprise investment scheme that can qualify for income tax
relief will rise to £500,000 from 6 April 2008. |
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The tax treatment of overseas
dividends, offshore funds and some authorised funds will be
revised. |
* |
Charities will be given a 2%
transitional relief for gift aid donations to compensate for
the reduction in the basic rate of tax. |
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Click
on the links below to find out more....
Business
Taxation | Capital Taxes
| Residence and domicile
| National Insurance Contributions
| Personal Taxation |
Value Added Tax
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