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The 2007 Budget |
This summary includes announcements from previous budgets that are still to come into effect.
Personal tax
Personal allowance is increased to £5,225 for 2007/08. From April 2008 the basic rate tax rate is cut from 22% to 20% but the 10% lower
rate band is eliminated for earned income. Most people will be no better off but the poorest earners will be worse off.
The lower rate tax band increases to £2,230 for 2007-08 and higher rate tax starts at £34,600, up from £33,300.
Van benefit in kind is to be revised. There will be a nil rate band where the employee has to take the van
home but no other personal use is allowed. Otherwise the current rate applies up to 5 April 2007. After
that there will be a flat rate £3,000 per year benefit charge plus £500 for private fuel.
Companies
Small companies rate of tax will increase from 19% to 22% by 2009 at a rate of 1% a year starting in April 2007 but the main rate for large businesses will reduce to 28% from April 2008.
R&D tax credits for small businesses will increase from 150% to 175% from April 2008.
Writing down allowances on plant and machinery will be reduced from 25% to 20% from April 2008.
Minimum wage increases to £5.52/hour from October 2007.
Capital allowances on cars will be revised so that the allowance is based on the CO2 figure.
Inheritance tax
The nil rate band increases to £350,000 from 2010-2011.
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| Pensions |
| Pensions are just
saving in a particular tax wrapper. As the debate rages keep in mind that there
are other legitimate savings plans that don't require you to lock up your money
with complete strangers for most of your life. |
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| IR35 |
| Not the fearsome
tax gatherer it was originally thought to be. The Revenue lose most cases
these days and now it's really down to getting your story straight and avoiding
unhelpful contracts. |
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| My Motorbike |
This is my motorbike. I bought it new just after I passed my test. It is a
1999 Honda Fireblade. |
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