Review: Alistair Darling’s Pre-Budget Report
10/10/2007
In his maiden pre-budget report, Alistair Darling introduced a number of measures to declutter the business tax system.
The Chancellor announced a reduction in the amount of form-filling that needs to be produced in conjunction with stamp duty. Several smaller types of financial transactions will be freed of stamp duty.
He said the government would be improving and simplifying the gift aid system in conjunction with major charities
Darling promised to streamline the collection procedure for class 2 and class 4 of national insurance contributions. In particular, self-employed people will have an easier job of understanding and paying their NI contributions.
In an overt snatch of Tory policies, the Chancellor announced a number of tax measures:
The Inheritance tax threshold for married couples would double from £300,000 to £600,000. Many reports fail to mention that the individual limits are already at £300,000 so for those couples with a simple nil-rate band discretionary trust which is almost certain to be in place for any couple with a will drafted by a competent solicitor, there is absolutely no new benefit at all. It does, however, help those couples without a trust in place, and many people do not even have a will, to utilise their joint inheritance tax exemption upon death of the surviving spouse.
Nicked straight from George Osborne was his plan to grab more tax off non-domiciled residents by levying them a flat charge of £30,000 per year (George suggested £25K). This will raise the government in excess of half a billion pounds a year.
In a move widely regarded in the business world as a poor shotgun blast, the Chancellor moved to penalise the super wealthy kings of private equity by raising the rate of capital gains tax from the current bottom level of 10% to 18%. Unfortunately, this will hit all businesses in the UK, irrespective of size, and will reduce the inclination for entrepreneurs to start new businesses.
The Chancellor promised to lift investment in the transport system to £14.5bn by 2010. This is to specifically provide the monies 'for strategic road schemes like widening the M1 and M6' with a small percentage allocated to for improve regional and local transport.
