Tax & Accounting News
Pre-Budget Report
06/12/2006
The Chancellor has delivered his Pre-Budget Report. He has
concentrated on measures to assist the competitiveness of the UK,
education, and skills training, and further measures to tackle child
poverty and environmental issues. There are no major taxation changes,
but we summarise below the main points affecting company and personal
income, taxation and pensions.
Income tax, national insurance and working tax credit allowances
and rates
The usual small increases in income tax, tax credit and national insurance
allowances and thresholds are proposed. Click here for
full details.
Income tax
It is proposed that the new tax return filing dates recommended by
the Carter report will be implemented for the 2007-08 tax year. The
deadline will be 31 October 2008 for paper returns and 31 January 2009
for online filing.
On the positive side (apologies for the pun!) sales of surplus power
by householders who have installed microgeneration equipment are to
be tax-free. Click here for
full details.
Individual savings accounts
ISAs (due to end in 2010) will be made permanent and generally simplified.
Click here for
full details.
Corporation tax
Six specific Corporation Tax avoidance schemes have been blocked, with
immediate effect. Click here for
full details.
New rules for Controlled Foreign Companies, effective from 6 December
2006, will be enacted in the next Finance Act. In accordance with the
ECJ decision in the Cadbury Schweppes case, the CFC rules will no longer
apply to profits arising from genuine economic activity in other EU
member states. Click here for
full details.
Some changes are to be made to the Real Estate Investment Trust regime
which comes into effect on 1 January 2007. The conditions for joining
the regime have been relaxed, and other detailed changes made. Click here for
full details.
New Construction Industry Scheme
It has been confirmed that the rate at which tax will be deducted from
payments to unregistered subcontractors from 6 April 2007 will be 30%.
The standard deduction rate will be increased from 18% to 20%.
Managed service companies
It is proposed to introduce new rules with effect from 6 April 2007
which will ensure that workers in 'composite' or managed service companies
are subject to PAYE and NIC on earnings. In many cases income is currently
received by way of dividends which are not subject to PAYE and NIC.
Click here for
full details.
Pension schemes
Minor changes will be made to the treatment of Alternatively Secured
Pensions. Click here for
full details.
Some technical changes will also be made to pension schemes in general.
Click here for
full details.
Capital Gains Tax
Some avoidance schemes involving the creation of artificial losses
have been blocked, with immediate effect. Click here for
full details.
Stamp Duty Land Tax
Some avoidance schemes have been blocked, with immediate effect. Click here for
full details.
Air Passenger Duty
The rate of duty has been doubled, to £10 for most flights
in the EU and £40 for most flights outside the EU. Click here for
full details.
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