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Click here to e-mail your query or to arrange a free initial meeting to discuss how the 2006 pre-budget report affects you.
West Norfolk Taxation Service presents a summary of how you may be affected by what Gordon Brown described as his “latest” rather than “last” pre-budget speech.
Employees
Personal allowances (the amount of money you can earn before income tax becomes payable) will go up in line with inflation:-
2007/08 2006/07
Under 65s £5,035 £5,225
65-74 £7,280 £7,550
75 and over £7,420 £7,690
Married allowance
born pre 6 April 1935 £6,065 £6,285
75 and over £6,135 £6,365
Similarly, National Insurance Contribution limits will go up in line with inflation.
Increases in personal allowances and national insurance limits are again below average wage rises. This leads to 'fiscal drag' which means a higher percentage of your income is taxed
The end may be in sight for owner managed service companies which have been increasingly used by workers to provide their labour services without having to meet normal PAYE and NIC obligations.
Pensioners
State pension increases have already been announced and are at present linked to inflation.
From April the pension credit minimum guarantee will rise by £5 a week for single people over 60 and £7.65 a week for couples.
Winter fuel payment have already been set at £200 and guaranteed for the duration of this parliament. Over-80s will receive an additional £100.
Pressure from Energywatch, Save the Children and Citizens Advice was resisted to award winter fuel payments to other vulnerable groups such as the disabled and lone parents.
Almost 3 million households have been helped with insulation and a pledge to assist a further 300,000 households with free insulation and central heating.
Motorists
It has been three years since the last duty increase so it may come as no surprise that an increase of 1.25p has been announced.
Savers
It is confirmed that Individual Savings Accounts (ISAs) will continue beyond 2010.
Approximately 16 million Britons have an ISA which allow people to save or invest up to £7,000 each year tax free.
Parents
More child benefit will be paid to mothers with new babies and in April, benefit payments for children from low income families will rise to £64 a week.
Investment in education has been marked as a priority and money is being earmarked for the updating of all UK secondary school.
Increased investment in apprenticeship schemes is set to boost school leavers prospects of finding employment.
Holidaymakers
Air Passenger Duty is doubling for both short and long haul flights. Economy class to EU countries will increase from £5 to £10. Long haul passengers will be liable to a £40 charge up from £20 a present.
Business and first class passengers face the highest rates with rates to EU countries increasing from £10 to £20. Long haul non-economy passengers will have to pay £80 in duty, each way.
Estate beneficiaries
Some accountancy firms predicted an overhaul of the inheritance tax regime and do away with current arrangement where most assets above the threshold (£285,000) is taxed at 40%.
No change was announced to the current system and the threshold is set to increase to £300,000 in April 2007.
New homeowners
Stamp duty is to be cut on new experimental “zero carbon” homes. It is aimed that by 2016 all new homes will be built to be “zero carbon” homes.
To find out how you are likely to be affected by the changes announced please contact Gary Clark from West Norfolk Taxation Service on 01553 675952 or 07771 760676
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