Budget 2007


Introduction

Personal Income Tax

National Insurance Contributions

Employees

Savings & Investments

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


There was no doubt that Gordon Brown's eleventh Budget would be his last. He joked that the last person to present a twelfth was Gladstone, who only managed the feat by combining the offices of Chancellor and Prime Minister. He appeared to disapprove of that idea, but went on to announce a large number of changes that will take effect in one, two or even three years' time - after he has moved next door. Whoever takes on his job will find half the next Budget speech already written and filed under "pending".

As usual, the speech itself was full of broad statements which accentuated the positive - Mr Brown contrived to finish his last Budget by announcing a reduction in the basic rate of income tax (coming next year, not this!). When he sat down, 190 pages of press releases and the 312-page "Red Book" were released to fill in the details. This booklet summarises the main changes and outlines their effect on the average taxpayer.

Significant points
  • 2007/08 rates of income tax unchanged, allowances increased in line with inflation

  • Significant changes for 2008/09 - 10% rate abolished, basic rate cut to 20%, rise in NIC upper limit

  • Small companies rate of corporation tax rises to 20% immediately and to 22% in two years

  • Balancing adjustments on disposal of industrial buildings abolished from Budget day

  • Anti-avoidance crackdown on managed service companies

  • Confirmation that no income tax arises where a foreign home is owned through a company