Budget report summary
The Chancellor, Gordon Brown, described this budget as one to expand prosperity and fairness for Britain's families is built on the foundation of the longest period of economic stability and sustained growth in our country's history.
The Chancellor made no changes to the allowances proposed last year.
| Income tax allowances | 2006-07 (£) | 2007-08 (£) | Increase |
|---|---|---|---|
| Personal allowance | 5,035 | 5,225 | 190 |
| Personal allowance for people aged 65-74 | 7,280 | 7,550 | 270 |
| Personal allowance for people aged 75 and over | 7,420 | 7,690 | 270 |
| Income limit for age-related allowances | 20,100 | 20,900 | 800 |
| Married couple's allowance* for people born before 6 April 1935 | 6,065 | 6,285 | 220 |
| Married couple's allowance* aged 81 or more | 6,135 | 6,365 | 230 |
| Minimum amount of married couple's allowance* | 2,350 | 2,440 | 90 |
| Blind person's allowance | 1,660 | 1,730 | 70 |
* Married couples allowance is given at the rate of 10%.
Taxable bands
| 2006-07 (£) | 2007-08 (£) | ||
|---|---|---|---|
| Starting rate 10 per cent | 0 - 2,150 | Starting rate 10 per cent | 0 - 2,230 |
| Basic rate 22 per cent | 2,151 - 33,300 | Basic rate 22 per cent | 2,231 - 34,600 |
| Higher rate 40 per cent | Over 33,300 | Higher rate 40 per cent | Over 34,600 |
Capital gains tax
| Annual exempt amount | 2006-07 (£) | 2007-08 (£) |
|---|---|---|
| Individuals | 8,800 | 9,200 |
| Trustees | 4,400 | 4,600 |
National insurance contributions
| National insurance contributions | 2007-08 |
|---|---|
| Lower earnings limit, primary class 1 | £87 per week |
| Upper earnings limit, primary class 1 | £670 per week |
| Primary threshold | £100 per week |
| Secondary threshold | £100 per week |
| Employees' primary class 1 rate | 11% of £100.01 to £645 per week, 1% above £670 |
| Employees' contracted-out rebate | 1.6% |
| Married women's reduced rate | 4.85% of £100.01 to £670 per week |
| Employers' secondary Class 1 rate | 12.8% on earnings above £100 per week |
| Employers' contracted-out rebate, salary-related schemes | 3.7% |
| Employers' contracted-out rebate, money-purchase schemes | 1.4% |
| Class 2 rate | £2.20 per week |
| Class 2 small earnings exception | £4,635 per year |
| Special Class 2 rate for share fishermen | £2.85 per week |
| Special Class 2 rate for volunteer development workers | £4.35 per week |
| Class 3 rate | £7.80 per week |
| Class 4 rate | 8% of £5,225 to £34,480 per year 1% above £34,480 |
| Class 4 lower profits limit | £5,225 per year |
| Class 4 upper profits limit | £34,480 per year |
Working and child tax credits
| £ per year (unless stated) | 2006-07 | Change | 2007-08 |
|---|---|---|---|
| Working Tax Credit | |||
| Basic element | 1,665 | 60 | 1,730 |
| Couple and lone parent element | 1,640 | 60 | 1,700 |
| 30 hour element | 680 | 25 | 705 |
| Disabled worker element | 2,225 | 85 | 2,310 |
| Severe disability element | 945 | 35 | 980 |
| 50+ Return to work payment (16-29 hours) | 1,140 | 45 | 1,185 |
| 50+ Return to work payment (30+ hours) | 1,705 | 65 | 1,770 |
| Childcare element of the Working Tax Credit | |||
| Maximum eligible cost for one child | £175 per week | - | £175 per week |
| Maximum eligible cost for two or more children | £300 per week | - | £300 per week |
| Percentage of eligible costs covered | 70% | +10% | 80% |
| Child Tax Credit | |||
| Family element | 545 | - | 545 |
| Family element, baby addition | 545 | - | 545 |
| Child element | 1,765 | 80 | 1,845 |
| Disabled child element | 2,350 | 90 | 2,440 |
| Severely disabled child element | 945 | 35 | 980 |
| Income thresholds and withdrawal rates | |||
| First income threshold | 5,220 | - | 5,220 |
| First withdrawal rate (per cent) | 37% | - | 37% |
| Second income threshold | 50,000 | - | 50,000 |
| Second withdrawal rate (per cent) | 6.67% | - | 6.67% |
| First threshold for those entitled to Child Tax Credit only | 14,155 | 340 | 14,495 |
| Income disregard | 25,000 | - | 25,000 |
Child Benefit and Guardian's Allowance rates from 10 April 2006
| £ per week | 2006-07 | Change | 2007-08 |
|---|---|---|---|
| Eldest/Only Child | 17.45 | 65p | 18.10 |
| Other Children | 11.70 | 40p | 12.10 |
| Eldest/Only Child (Lone Parent Rate) | 17.55 | Abolished | |
| Guardian's Allowance | 12.50 | 45p | 12.95 |
Inheritance tax
The nil rate band threshold has been increased by £15,000 from £285,000 to £300,000 for 2007-2008.
Corporation tax
| £ per year (unless stated) | 2006-07 | 2007-08 |
|---|---|---|
| £0 - £300,000 | 19% | 20% |
| £300,001 - £1,500,000 | Marginal relief | Marginal relief |
| £1,500,001 or more | 30% | 30% |
Vehicle Excise duty
Vehicle excise duty for Private and Light Goods Vehicles Pre-graduated VED (registered before March 2001)
| £ per year | Change | New rate |
|---|---|---|
| 1,549cc and below | +5 | 115 |
| above 1,549cc | +5 | 180 |
Graduated VED for Private Vehicles (registered from March 2001)
| £ per year VED band | CO2 (g/km) | Change | Alternative fuel cars | Petrol cars | Diesel cars |
|---|---|---|---|---|---|
| A | 100 and below | 0 | 0 | 0 | 0 |
| B | 101 to 120 | -£15/-£5/£15 | 15 | 35 | 35 |
| C | 121 to 150 | £5/£15/£5 | 95 | 115 | 115 |
| D | 151 to 165 | £5/£15/£5 | 120 | 140 | 140 |
| E | 166 to 185 | £5/£15/£5 | 145 | 165 | 165 |
| F | 186 to 225 | £10/£15/£10 | 190 | 205 | 205 |
| G* | 226 and above | £85/£90/£85 | 285 | 300 | 300 |
* for new cars registered after 23 March 2006.
Other measures
The reduced rate band, currently 10%, will be withdrawn from 6 April 2008.
The basic rate of income tax, currently 22%, will be reduced to 20% from 6 April 2008.
Duty on cigarettes is to be increased by 11 pence for a packet of 20.
A pint of beer will cost 1 penny more.
A bottle of wine will cost an extra 5 pence.
Duty on spirits, cider and sparkling wine has been frozen.
The increase of 2 pence per litre on fuel has been deferred until October 2007.
This page was last reviewed on 26 March 2007. The information may not reflect changes in legislation made after this date.
This is only a guide to your tax position and should not be relied on in place of professional accounting or tax advice. Any calculated figures are illustrative and are based on the data you provided.
