Gordon Brown's biggest surprise was a 2p cut in in the basic rate in income tax from 2008, but any gains will be largely offset by the scrapping of the 10p lower band and the increase in the National Insurance threshold. The changes will come in from April 2008.
Taxes and pensions
- Basic rate of Income Tax cut from 22p to 20p next April, but 10p lowest rate will be scrapped.
- Threshold for higher rate tax increased to £43,000 in April 2009.
- No National Insurance on earnings above £43,000 a year from 2009 - up from £34,840 for this year.
- Income tax exemption for around 600,000 pensioners. Allowance for over 75s raised to £10,000 by 2011.
- Child Benefit to increase to £20 a week by 2010
- Inheritance tax rises from £285,000 to £350,000 by 2011.
- Capital Gains allowance rises to £9,200 single, £18,400 married.
- Fund for collapsed pension schemes raised to £8billion
Cigarettes and Alcohol
- 20p rise in duty on packets of 20 cigarettes.
- 1p rise on beer duty.
- 5p rise on wine duty.
- 7p on sparking wine duty.
- Freeze on spirit duty.
Motoring
- Fuel duty up 2p per litre from October. A further 2p added in 2008 and 1.8p in 2009
- Car Tax: top band - £300 this year, £400 next.
- Band B cut to £35 whilst lowest band stay tax free.
- Reduced duties on biofuels and biogases extended.
Environment
- Higher tax rates for landfill.
- Homes which are carbon neutral will be exempt from stamp duty.
- Increase in home green grants by £50
- Pensioners to receive £300-£4000 grant to install insulation and central heating.
Business
- Science investment to rise by £1.3 billion.
- Corporation Tax reduced from 30p to 28p from April 2008, but corporation tax on small businesses to rise from 20p to 22p.
Health and Education
- Biggest ever increase on NHS spending with £8billion extra being spent.
- Education spending to rise from £60 billion this year then £67 billion,£70 billion, £74 billion in the following years.
- VAT restrictions will be removed on academies to ensure sports facilities available to local communities.
Defence
- Armed forces to receive extra £400 million
- £86 million extra for intelligence services.
Economy
- Asset sales will rise £36 billion including Student loan company, being sold for £6billion
- Inflation will fall further this year to 2% and will be on target in 2008 and 2009
- British economy is fastest growing of all G7 nations. Business investment to increase 6%
- Uk to meet "golden rule" next economic cycle despite falling North Sea revenues.
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