In his eleventh Budget, Chancellor Gordon Brown has rejected Conservatives’ claims that his Budget tax changes were a “con trick”. The basic rate of income tax will fall from 22p to 20p (its lowest for 75 years) from April next year, but the lower starter rate of 10p will also go – which means those who pay income tax will start at 20p in the pound instead of 10p. From 2009, the cut-off point for NI will rise from £34,840 (this year) to £43,000, with 1% NI for earnings above that level continuing, and the top-rate income tax threshold will rise to £43,000.
Beer will increase by 1p a pint, wine by 5p a bottle and cigarettes by 11p a packet. However, some good news for those of you trying to quit smoking – nicotine patches and gums will have their VAT cut to 5% from 17.5% for one year. Other positive changes include a reduction in corporation tax from 30p to 28p in the pound (from April 2008) and the income tax free allowance for pensioners under 75 will rise from £7,280 to £9,770 in 2010.
So what does this mean to you? Mr Brown claims the average family will be £5 a week better off thanks to the income tax changes. However Shadow Chancellor George Osborne challenged Mr Brown to admit that 3.5 million families will be worse off. Let me know your thoughts …
Gordon Brown is going green and has decided to increase car tax on vehicles that are uneconomical in Britain today. I personally think this is a great idea but then I would – I drive a Peugeot 106. I know a lot of people who are less than happy about the new changes but then many don’t actually care because the taxes only apply to cars registered after March 1st 2001 – I personally think it should apply to all cars.