Archive - 2003 Budget: Budget highlights Capital taxes Duties Value added tax National insurance 2003/04 tax calendar Business tax Investment incentives Income tax Pensions Company cars Other measures announced

A new tax relief will be introduced for foster carers with effect from 6 April 2003. Gross receipts from foster care will be exempt from income tax up to an individual limit. The individual limit will consist of two amounts:

• a fixed amount per residence of £10,000 for a full year, and
• an additional amount per child for each week, or part week, that the individual provides foster care. That amount will be £200 per week for a child under eleven and £250 a week for a child of eleven or over. The exemption will only apply to income from the provision of foster care. If the gross receipts from foster caring exceed the individual limit, the foster carer has two alternatives:
• to compute their business profit under the usual rules, or
• to treat the excess above the individual limit as the assessable profit.

An extra statutory concession currently exempts adoption allowances from tax, however, this exemption will not apply to financial support being paid under the Adoption and Children Act 2002. As a result, adoption support payments by local authorities or adoption agencies are to be made specifically exempt from tax with effect from 6 April 2003. The Treasury will also be able to exempt from tax any payments to adopters that may be subsequently introduced.

Registered social landlords, including housing associations, are to benefit from a stamp duty exemption in respect of tenancy agreements entered into with local authorities to house the homeless. The legislation will be retrospective and will apply to agreements entered into since 1 January 2000.

The Chancellor recently issued a statement on the policy of the Inland Revenue regarding prosecutions for tax evasion, and the wording of the statement is to be introduced into the legislation. Taxpayers who are suspected of serious tax evasion will continue to be offered the Hansard procedure, which is a civil rather than a criminal settlement offered by the Inland Revenue. As a quid pro quo, the taxpayer has to make a full disclosure of the tax position.

	Pointer
	If events of the last couple of years have reminded you of your own mortality, consider with us the compilation of a personal and business disaster plan – a structure which can be immediately implemented if the unthinkable happens.

Don't forget to check the tax calendar for a selection of filing, issuing, and payment deadlines. Remember, under self assessment late payment or filing can cost you dearly in penalties, surcharges and interest.

We end on a lighter note with a comment from one of Hollywood's actors. "Last year I had difficulty with my income tax. I tried to take my analyst off as a business deduction. The Government said it was entertainment. We compromised finally and made it a religious contribution."  Woody Allen

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