Budget Taxation Guide 2008
THE GUIDE
To order your copy of our free Budget Taxation Guide 2008, please call us on 0114 2667171. If you would like to download a copy, click on BHP Budget Taxation Guide.
THE DIRTY DOZEN – BHP BRIEF BUDGET SUMMARY
Listed below are brief details of 12 significant measures announced or confirmed in yesterday’s budget.
1- From 6 April 2008, the basic rate of income tax will be reduced from 22 per cent to 20 per cent and the starting rate of 10 per cent is abolished for non-savings income.
2- The rate of tax on chargeable gains after 5 April 2008 will be 18 per cent and taper relief and indexation allowance will no longer be available to reduce gains arising after this date.
3- An entrepreneur’s relief will be available after 5 April 2008 to individuals and trustees who dispose of the whole or part of a trading business, or of shares in a trading company in which they have a qualifying interest. This will result in the first £1m of subsequent lifetime qualifying gains being taxed at an effective rate of 10%.
4- Capital allowances on plant and machinery have been reformed and industrial buildings allowances are to be phased out over the next 4 years.
5- Increased capital allowances on green technologies and green cars continue to be available and have been extended in some cases including the introduction of cash repayments for company losses incurred through investing in some green technologies.
6- The limit on the value of Enterprise Management Incentives (EMI) options awarded increases from £100,000 to £120,000 per individual from 6 April 2008.
7- The maximum annual investment in the Enterprise Investment Scheme (EIS) will increase from £400,000 to £500,000 subject to state aid approval.
8- From 1 April 2008, companies claiming R&D tax reliefs will be entitled to increased relief of 175 per cent under the small and medium company scheme and 130 per cent under the large company scheme subject to state aid approval.
9- From 6 April 2008, there are changes to the taxation of non-UK domiciled individuals including an annual charge of £30,000 per year for those who have been resident in the UK for more than seven years and wish to continue to claim the remittance basis of taxation.
10- It was anticipated that rules would be introduced to counter individuals arranging for company dividends or partnership profits to be transferred to someone with a lower tax rate (such as their spouse). The Government have decided to defer these provisions until at least 2009.
11- The reduction of the basic rate of income tax to 20 per cent could have reduced the benefit received by charities under the gift aid scheme. However, measures announced will enable charities to claim 22 per cent tax back in respect of gift aid donations rather than 20 per cent for the next 3 years.
12- Company car drivers will pay a new lower rate of tax upon benefits in kind on cars with CO2 emissions of 120 g/km or less.
Further information:
If you have any queries regarding the above, please contact a member of our tax department on 0114 266 7171.