PRE-BUDGET REPORT – AT A GLANCE GUIDE
Rates and Allowances
Income tax allowances for 2007/08 increased in line with inflation – personal allowance increased by £190 to £5,225.
Higher rate income tax at 40% starts when income, after allowances, reaches £33,300.
No changes to income tax rates or changes in National Insurance rates.
VCT and EIS Investments
With effect from 6 April 2006 the rate of income tax relief for investors in VCTs is increased to 30%.
The annual investment limit into EIS has increased from £200,000 to £400,000.
Filing Dates
Self assessment returns for 2007/08 will have to be filed by 31 October 2008 if paper and by 31 January 2009 if on-line.
Company filing will be aligned with Companies House requirements by 2010.
Managed Service Companies (MSC)
Income received by workers in MSCs in relation to services provided through the MSC will be subject to employed levels of tax and NICs. The MSC will be obliged to operate PAYE and deduct tax and Class 1 NICs on that income.
Details will be issued in a consultation document in January 2007.
Fuel Duty
Air passenger duty will rise in February from £5 to £10 for most flights.
Fuel duty increased from 7 December by 1.25 pence a litre.
Pensions
Basic state pension to rise by 3.6% in April and pension credit minimum guarantee to rise £5 for single people and £7.65 for couples.
Child Benefit
In April benefit payments for the poorest children will rise to £64 a week.
