Economists have suggested that Brown gave with one hand and took away with the other on this budget. Gordon Brown undoubtedly deflected political opposition when he pulled his income tax cut out of his hat in the closing minutes of his budget speech. The main budget changes are:
Financial
The basic rate of income tax will be lowered from 22 pence to 20 pence – April 2008
Maximum income tax threshold raised to £ 43,000 – April 2009
Corporate tax reduced from 30% to 28% – April 2008
Small business tax rate increased from 20 pence to 22 pence -2009
Exemption from capital gains tax increases from £ 8,000 to £ 9,200 – £ 18,400 for a married couple
Inheritance tax allowance increased from £ 285,000 to £ 350,000 – April 2008
Child benefit for the first child amounts to £ 17.45 and £ 20 in 2010
Tax-free allowance for pensioners under 75 increased from £ 7,280 to £ 9,770 – 2011Environmental
High road tax for gasoline-intensive cars (G-band increases to £ 300 and £ 400 in April 2008)
Lower emission cars remain tax-free and Band B tax is reduced to £ 35
New carbon-free homes up to £ 500,000 exempt from stamp duty [http://www.loan-loans-mortgage.co.uk/house-prices.htm] until 2012
Annual Landfill Tax Collected £ 8 – April 2008
Grants of £ 300 to £ 4,000 for retirees installing insulation / central heating in their homesLuxuries
Beer and cider up to 1p a pint, wine up to 5p a bottle, sparkling wine up to 7p – from midnight March 25, 2007
Cigarettes up to 11p per pack – 6:00 pm tonight
No increase of spirits
VAT reduction on nicotine replacement therapies for 1 year from July (from 17.5% to 5%)
Green activists hoped the Chancellor had done more [http://www.loan-loans-mortgage.co.uk/money-saving-tips.htm] movements, such as more expensive air travel, but it did not add VAT to airline tickets and business owners were disappointed with the increase in the small business tax, but overall the budget was considered fair. As predicted, Brown focused on the environment and education. There will be a £ 14bn increase in spending on schools, an increase from £ 60bn to £ 74bn by 2010
