|
PRE BUDGET REPORT 5 DECEMBER 2005
Gordon Brown announced a number of measures in his recent pre-budget report and the main changes are detailed below:-
Small Business
The Chancellor has abolished the starting rate of 0% for companies and therefore all small businesses will be charged at 19% on their profits.
Capital Allowances
These will be increased back to 50% from 40% for 2006/07.
VAT Simplification
The threshold for annual accounting is to be increased to £1,350,000. It is further proposed that this will also be the threshold for cash accounting.
Pensions
Investors in self directed SIPPS and SAS’s will not be allowed any tax advantages from 6 April 2006 if they invest in “prohibited assets” otherwise known as residential properties, fine wines, classic cars and art and antiques.
Income Tax Allowances
Personal allowances for 2006/07 have been increased by 2.7%. The basic personal allowance will rise from £4,895 to £5,035. The new age related allowance for over 65’s is £7,280 with £7,420 available for the over 75’s. The age related personal allowance income limit has increased to £20,100.
National Insurance
The threshold for Class I Contributions for 2006/07 will be the same as that for income tax at £97 per week. The upper earnings limit, above which employee contributions drop to 1%, increases by £15 per week to £645.
For the self employed Class 4 NIC on profits remains at 8% between £5,035 and £33,450 per annum.
Spreading Provisions – UITF 40
Business affected by the change in recognition of income under UITF 40 will be able to spread the effect of the change over between three and six years.
|
|
