Budget Headlines

The Chancellor, Gordon Brown set out what is likely to be his last budget yesterday in Parliament.

It has become almost inevitable over recent years that any Budget developed by Gordon Brown implements all the tax increases with immediate effect then all the proposed tax cuts and threshold increases follow on some time in the distant future, it would seem that this budget is no different. "The Gord give us and the Gord taketh away" with the emphasis perhaps on the latter, anyway we will let you decide. Here are the main points:

• The basic rate of income tax is cut from 22p to 20p effective from April 2008. Income tax and National Insurance are thresholds are aligned. The Higher rate income tax threshold will be increased from £38,000 to £43,000 pounds a year from April 2009.

• Beer to go up by 1p a pint, wine by 5p a bottle. No rise in spirits. Sparkling wine up 7p a bottle. as of Midnight Sunday

• Cigarette duty goes up by an inflation-linked 11p on a packet of 20 from 6pm yesterday. Nicotine patches and gums will have VAT cut from 17.5% to the lowest possible level of 5%, for one year from 1 July.

• Fuel duty rises 2p a litre deferred six months until October2007.

• 30% increase in road tax for the most polluting vehicles. Other very efficient cars will receive an immediate 30% cut in duty. Tax will remain at zero for cars that produce the least emissions.

• Threshold for inheritance tax to rise from £285,000 pounds to £350,000 pounds by 2010.

• Corporation tax cut by 2p from 30p to 28p in the pound. Takes effect from April 2008.

• Pension credit guarantee to rise to £130 a week by 2009. Income tax free allowance for pensioners under 75 to rise from £7,280 to £9,770 in 2010.

• Child benefit will rise from £17.45 pounds to £20 a week for the first child by 2010.

• The tax threshold at which a family with two children starts to pay income tax will rise from 22,500 pounds to 24,250 pounds.

• Maximum tax-free cash allowance for ISAs to rise by 20% to 3,600 in April 2008.

• Overall spending on education will rise by 5% each year to £74 billion in 2010, bringing annual spending per pupil to £6,600.


For a more comprehensive breakdown of the budget you can visit Deloittes' Budget 2007 Home Page.