Ten things to look out for in the 2003 Budget
So the Budget is set for Wednesday 9 April, but as ever, there has been much speculation well ahead of the date about what the Chancellor might say. Here is a Top 10 of the areas where the experts are predicting there may be changes:
1. New Tax Credits
A new Child Tax Credit and Working Tax Credit to include an allowance for many middle-income families employing nannies (CTC is expected by the Government to benefit families with an income of up to £58,000 per annum).
2. Tax on company vans
The rules for tax on company vans to be changed. The system of charging tax of up to £200 a year for those driving company vans has come under some scrutiny - not least because some four-door pick-up trucks are now equipped and marketed as 'leisure' vehicles, and priced accordingly. Last year the Inland Revenue had to issue guidelines in conjunction with H M Customs & Excise, to clarify the treatment of such vehicles. Meanwhile, the Chancellor has announced a review of the whole area of tax on company 'vans'.
3. VAT limit
The VAT turnover limit for businesses adopting the flat rate scheme will be increased to £150,000 (announced 27 November 2002).
4. Retirement relief to be phased out
The end of capital gains tax retirement relief. The phasing out of retirement relief was announced in 1998, and will be completed at midnight on 5 April 2003.
5. Income tax
Income tax personal allowances for those aged 65 or more to increase, but the basic personal allowance frozen for those aged under 65 (announced 27 November 2002).
6. Employers' NI rates
Employers' main national insurance rates to rise by 1%, and the principle of a 'maximum' for employee (class 1 primary) and self-employed (class 4) contributions is breached. (From April 2003 all employees below retirement age will pay NICs at 1% on earnings over £595 per week, and likewise the self-employed will pay 1% of earnings over £30,940, all figures for 2003/04).
7. Charitable donations
The 10% supplement on charitable donations made through payroll giving will be extended to April 2004 (due to expire at the end of March, 2003, this supplement means that a donation worth £110 to a charity can cost as little as £60 to the donor).
8. IT allowance
The 100% first-year allowance for small businesses investing in IT equipment to be extended beyond 31 March 2003.
9. Paternity and Adoption Pay
Employers will face yet more bureaucracy as a result of the introduction of new Statutory Paternity and Adoption Pay. The new payments begin with children born, or expected to be born, on or after 6 April 2003 or matched for adoption or placed on or after 6 April 2003.
10. And finally, good news for small businesses?
This is less a prediction than a plea. The Confederation of British Industry has warned the Treasury that any further taxes put in place during the Budget could cripple UK businesses. The last two years have seen a 15% cut in corporate investment as a result of increased taxation.
The Director-General of the CBI, Digby Jones, has stated that UK businesses are 'extremely nervous' about any further tax increases, and that the CBI will be 'closely watching the stealth tax radar screen on Budget day'.
So much for the speculation. To find out what the Chancellor actually does say on 9 April, make sure you visit our site.
|
