Budget 2008
SUMMARY OF BUDGET 2008 – KEY TAX MEASURES
(A number of changes were announced last year)
Income Tax
- 10% starting rate band abolished from April 2008.
- Basic tax rate 20% from April 2008.
- Basic rate band £36,000.
- Age allowances increased above inflation.
Corporation Tax
22% from 1 April 2009
- Main rate 28% from 1 April 2008
Capital Allowances
- New annual investment allowance for the first £50,000 of expenditure on plant and machinery from 2008/09.
- Allowances on long life assets increases from 6% to 10% for 2008/09.
- Reduction in writing down allowances on plant and machinery from 25% to 20% from 2008/09.
- A reduced writing down allowance of 10% for fixtures integral to a building from 2008/09.
Capital Gains Tax
- The annual exemption raised to £9,600 for 2008/09.
- The capital gains tax rate for 2008/09 will be 18%.
- A new Entrepreneur’s relief (announced in January 2008) will reduce effective rate of tax on some gains to 10%.
Inheritance Tax
- Already announced thresholds (transferable between spouses and civil partners):
2008/09 - £312,000, 2009/10 - £325,000, £2010/11 - £350,000.
Child and Working Tax Credit Rates
- Child element of Child Tax Credit increased to £2,085 from April 2008.
- No change to family element of £545.
- Threshold for Working Tax Credit increased to £6,420 from April 2008.
Other
- VAT turnover limit increased to £67,000 from 1 April 2008.
- Increases in the upper earnings limit from £670 to £770 for class 1 National Insurance contributions.
- Class 4 upper earnings limit increased by £5,200 from £34,840 to £40,040.
- New 10p starting rate for savings income with a limit of £2,320.
- Taxation of UK dividends remains the same.
- The rates and thresholds for stamp duty land tax (SDLT) remain unchanged.
- A number of measures introduced, effective from Budget day, to tackle various avoidance schemes and to protect tax revenues.
- Income shifting rules now put back to 5 April 2009.
- From next year vehicle excise duty will be based on carbon emissions. Low polluters will pay less and the most polluting cars more – up to £425. A new higher first year rate of £950 will be introduced in 2010/11.
13/03/08
Updated 14.03.08
more news from Davisons »
Download the latest Davisons Newsletter (PDF)
Our monthly tax tips and hot topics
01769 572404
01769 574744
info@davisons-uk.com
11 South Street
South Molton