Bristol based accountancy practice
Barnes Hunter, is warning local people to look
closely at this year’s budget announcements
before presuming it’s all good news.
Gordon Brown delivered his eleventh, and what
is expected to be his final, Budget yesterday.
This year’s measures contained a few
shocks, with the Chancellor’s tax cut
provoking an uproarious reaction from Labour
and Conservative benches alike.
But what does the 2007 Budget mean for you,
your family and your business?
Summary of Key Proposals
- The main proposal this year is a 2p cut
in the basic rate of income tax. However,
the Chancellor also scrapped the 10p lower
rate so even low earners will be paying 20%
tax on all their taxable income.
- Fuel duty
will rise by 2p but will be delayed for six
months, while road tax on ‘gas
guzzling’ vehicles will rise to £300
this year. From 2008 that will rise to £400,
but the least polluting cars will have their
road tax cut to £35. These measures
are to protect the environment and tackle
climate change.
- Corporation tax for small
companies will rise from 19% to 22%
- Corporation
tax for large companies has been cut from
30p to 28p from April 2008.
- The Inheritance
tax threshold will rise from £285,000
to £350,000 by 2010.
- There will be further
support for families, with the child element
of the Child Tax Credit increasing by £150
per annum.
Chris Barnes, partner at Barnes Hunter comments: "While
the income tax cuts initially sound like good
news, the abolishment of the low rate tax threshold
could result in hard working middle income
families actually being worse off. As always
it’s the detail which people need to
beware of.
A little noticed effect of the reduction in
the basic rate of tax is the effect on Gift
Aid tax repayments for Charities, who can only
reclaim the lower rate of tax on gift aid donations.
This has the effect of reducing tax refunds
receivable by charities by over 11%
"The ambiguous announcements continued
when it comes to business. There was good news,
for example the cut from the current 30% corporate
tax for large companies was welcomed by business
groups who had called for a cut to help restore
the UK's competitiveness. However, the rate
of corporation tax paid by smaller firms is
to rise from 19% to 22% in 2009."
For more information contact Chris Barnes
on 0117 930 0061. |
