Pre-Budget Report 2008


Introduction

Cuts and clawbacks

Personal tax

10% compensation

Number crunching

You're NICked

High earners

Employee shares

Lifetime limit

Trust taxation

Credits and benefits

Pensioner boost

Business tax

VAT difference?

Small company tax

Company losses

Car allowances

Flat rate VAT

Connected loans

Empty properties

Big business

Tax administration

Just give us time!

No income shifting change

Avoidance schemes

Other taxes

Duty calls

No more SDLT relief

Green taxes

Darling: waving or drowning? Too little, or far too much?


The Chancellor was keen to impress on everyone listening that the circumstances surrounding the Pre-Budget Report were extraordinary, and they were Someone Else's Fault - he constantly referred to the global financial crisis and to other countries that are doing at least as badly as we are. The Opposition also thought it was Someone Else's Fault, but they were pointing at the man sitting next to Mr Darling - his predecessor in the office for ten years.

Wherever the blame lies, Mr Darling repeated again and again that he had decided to take action to deal with it: he would not sit on his hands and watch the economy sink into depression. His hope is that the action he has taken will boost economic activity and make the slowdown shorter and less painful. His critics will say that his entire strategy is based on hope: some of the key projections of growth are more optimistic than other forecasters' figures, and he has taken credit for billions of pounds of efficiency savings that may not be delivered.

Even with those hopeful predictions, the Chancellor's expected levels of borrowing are unprecedented. He is willing to spend money now - borrowed money - to tide us over the pain of recession, and does not expect to start paying it back until 2015. That is likely to be the other side of two General Elections, and who knows what other shocks will derail the plans before then?

Among all the economic argument and talk of billions of pounds to be paid back on the never-never, the Chancellor made a number of important announcements that directly affect ordinary taxpayers this year, next year and the year after. This newsletter outlines the most important changes and explains their effect on taxpayers and businesses. Difficult times require good advice: we are here to help.