Express Accountancy
Budget 22nd March 2006

• Overview - In most cases there is no significant change, however, for the tax year ended 5th April 2008 all personal tax returns will have to be submittted by 30th November rather than the existing 31st January of the following year, this measure will have a significant impact on Accountants and their clients.
  
  
• Personal Allowances - Personal Allowances increased to £5,035 (£96.80 per week). 10p rate on first £2,150 of taxable income from April 2004. Basic Rate remains at 22%. Higher rates tax kicks in once total earnings reach £38,335.
  
  
• National Insurance Thresholds upgraded in line with personal allowances. No change to rates this year.
  
  
• Capital Gains Tax - Threshold increased to £8,800. Taper relief maintained for business assets - 20% tax if asset held for 1 year, 10% if held for 2 years or over.
  
  
• Small Businesses - Small Limited Companies Corporation Tax rate of 19% to be charged on all profits, reductions for profits under £50,000 have been abolished. This means no change for companies with profits of over £50,000. Corporation Tax Rates frozen.
  
  
• Capital Allowances - First year allowance incresed to 50% for one year from April 2006, including IT related purchases.
  
  
• Inheritance Tax - Threshold raised to £285,000 in 06/07, £300,000 in 07/08.
  
  
• VAT Threshold & Rate - Threshold raised to £61,000. No change to the rates of VAT announced.
  
  
• Stamp Duty - Starting Threshold now £125,000.
  
  
• Self Employed National Insurance - Class II National Insurance raised to £2.10 per week.
  
  
• Computers at Home - Computers provided by a business for home use will be subject to benefits in kind.
  
  
• Minimum Wage - Adult Rate raised to £5.35 from October 2006.