The Budget Spring 2008

Please contact us to discuss any of the matters raised in this newsletter

Welcome to our 2008 Budget Summary

Alistair Darling presented his first Budget on Wednesday 12 March 2008.

After the Northern Rock saga and the changes of mind on the ‘simplification’ of capital gains tax, will it be his last?

On the economy, the Chancellor stated that there will be no recession although he conceded that growth up to 2010 will be less than previously forecast. Borrowing will go up as a result.

Our summary focuses on the direct and indirect tax measures which are buried in the Treasury and HMRC press releases.

We concentrate on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments.

If you have any questions please do not hesitate to contact us for advice.

Main Budget proposals

Plans to stop the tax savings available to businesses by ‘income shifting’ are delayed for one year
Further details on the changes to the capital allowances regime including the taxation of company cars
Improvements to the Enterprise Management Incentive scheme
Annual charge on non-domiciles still to be introduced but some relaxations made to the original proposals
Income tax relief extended for the Enterprise Investment Scheme

Previous announcements

Many of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:

Reduction in the basic rate of income tax and significant increases in national insurance
Increase in the investment limits for ISAs
The abolition of taper relief and indexation allowance for capital gains tax (CGT)
The introduction of a flat rate of CGT for individuals of 18% and a new Entrepreneurs’ Relief
A significant change in inheritance tax relief for married couples and civil partners

This information is intended for guidance purposes only, and you should always seek professional advice before taking any action. Please contact us for further information relating specifically to your business.

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