Budget 2006


Introduction

Personal Income Tax

Tax Credits

National Insurance Contributions

Employees

Savings

Trusts

Capital Gains Tax

Stamp Duty Land Tax

Inheritance Tax

Corporation Tax

Business Tax

Value Added Tax

Other Measures

Tax Tables

National Insurance

Budget Summary Introduction


Each time the Chancellor delivers a Budget speech, everyone expects it to be his last - and yet Mr Blair is still at Number 10 and Mr Brown is still next door. He started this year's speech by reminding us that no Chancellor has presented ten successive Budgets for 180 years. It has become hard to imagine anyone else doing it. Maybe next year...

Mr Brown aimed for popularity by freezing the duty on spirits and champagne (in expectation of celebrating the World Cup), and nodded to the Green lobby by increasing Vehicle Excise Duty on gas guzzling cars. As usual, the speech contained a great number of statistics to demonstrate that the economy is thriving under the best possible management, much better than "the last lot" - all Chancellors say that.

What this speech did not include was much of the detail of the tax changes for individuals and businesses. That was contained in 156 pages of press releases and the Treasury "Red Book" that are published the moment the Chancellor sits down. This booklet summarises the main changes, reveals some of those details that the Chancellor did not mention, and outlines their likely impact on the average taxpayer.

Significant points
  • Income tax allowances and thresholds increased in line with inflation

  • Restriction of exemption for loans of mobile phones and computers to employees

  • Increase in threshold for Stamp Duty Land Tax on houses to £125,000

  • Abolition of 0% corporation tax rate, but no other changes to small business tax

  • No changes to tax rules on main residences or husband and wife companies

  • Changes to reliefs for Venture Capital Trusts and Enterprise Investment Scheme

  • Closure of possible IHT loophole using pension funds

  • IHT to be imposed on most new trust arrangements