THE MAIN POINTS OF TODAY'S BUDGET
The following are the main points of Chancellor Gordon Brown's Budget.
Borrowing planned at #19 billion this year under the Tories was now expected to be #5 billion. In 1998-99 borrowing was planned to be #4 billion. By 2000 the budget was forecast to be in balance.£
From April next year Advance Corporation Tax is abolished. Corporation tax cut by 1% from 31% to 30% by April 1999. Corporation tax to be at 30% or less for the rest of this Parliament. Medium and small firms exempted from paying corporation tax by instalments.
Small companies rate of tax cut from April next year to 20% from 21% for the rest of this Parliament. Inland Revenue to help business set up payrolls.
50 million new venture capital fund from April. New structure for Capital Gains Tax to reward investment.
The short term rate to remain at 40% but those who invest for ten years down to 24p in the pound. For those who stake money in own businesses over the long term, the rate will be cut from 40p to 10p in the pound.
Cash holding for first year of new Individual Savings Accounts raised to #3,000. Tax reliefs guaranteed for 10 years for ISA savings of up to £5,000 a year. No limit on transferring cash from existing PEPs and Tessas.
New advice for 70,000 long-term unemployed. #60 million for pilot programmes to help partners of unemployed men find work. £100 million extra to tackle skills gaps.
Review of National Insurance - cutting the cost of employing low and middle paid workers. From next year, employers' National Insurance contributions cut to 12.2% after £81 of wages.
Single body to deal with Income Tax and National Insurance from April 1999; the Contributions Agency will transfer to the Inland Revenue.
Still committed to 10p tax rate. Pledge not to raise basic or top rate income tax kept for Parliament. New Working Families Tax Credit from October 1999. Working Families Tax Credit to replace Family Credit. Families to choose to whom credit is paid, directly or through the pay packet.
Families with someone working full-time will now have guaranteed income of at least #180 a week and no income tax will be paid on earnings below £220 a week.
New tax credit for disabled in work from October 1999.
No NI contribution to be paid on first
81 of earnings each week.
New child care tax credit - new credit to cover as much as 70% of childcare costs up to #100 a week for first child and £150 for two or more children.
Child benefit to remain universal and be paid directly to mother. No case for one-parent benefit. From next April £2.50p a week rise in child benefit in addition to inflation increases - to be paid for by restricting Married Couples Allowance to 10% from 15%
Child Premium for under-11s on Income Support and Family Credit to be increased by £2.50 a week from November this year. Recommendations to be brought forward later this year on future taxation of child benefit for higher rate taxpayers.
The tax allowance available previously only to men with incapacitated wives now to be applied to women with children and an incapacitated husband. To be backdated to April 1997.
VAT on installation of energy-saving materials cut from 17.5% to 5%.
An extra #500 million increase in public transport spending. #50 million a year on rural transport services. From January the road tax fee for cleanest lorries and buses to be cut by up to £500. Licence fee to be cut by
50 for smallest cleanest cars. The licence fee for other cars is frozen for this year.
Unleaded petrol to rise by 4.4p per litre. Leaded up by 4.9p per litre. Diesel to rise by 5.5p per litre.
Threshhold rises by #8,000 to £223,000.
Draft legislation for anti tax avoidance to published next month - £1.5 billion worth of loopholes to be closed.
Stamp Duty to rise by 2% on houses over #250,000 and 3% on property over £500,000.
Duty frozen on spirits. 1p on pint of beer. 4p on a bottle of wine. Moves to clamp down on smuggling. 20p on packet of 20 cigarettes.
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