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17-03-04 03:17
March 2004 Budget - Key Points

By RACHEL CONSTANTINE


Key points from Gordon Brown's eighth Budget, which was delivered in the House of Commons on Wednesday, 17th March 2004.
Taxes and duties
    * Tax rates will be frozen on: corporation tax, capital gains tax, air passenger duties, vehicle excise duty, insurance premium tax.
    * VAT threshold for small businesses up to £58,000.
    * Stamp duty also frozen.
    * From 1st April, the zero rate of corporation tax applied to businesses with less than £10,000 of profits will rise to 19%. The zero rate will continue to apply to reinvested profits up to £10,000.
    * Venture capital trust relief extended to top rate taxpayers for investments of up to £200,000.
    * Betting duties also remain unchanged, but there will be a review of the tax treatment of betting exchanges.
    * Inheritance tax rates are frozen, with the starting point for the tax raised to £263,000.
    * Tax relief for small-budget British films will be transferred directly to the filmmakers to avoid third parties wrongly taking advantage of the measure.
    * Duty on pint of beer raised by 1p, and by 4p on wine, but frozen on spirits, cider and sparkling wine.
    * Tax on cigarettes up in line with inflation - 8p a packet.
    * Accountancy firms will have to register tax avoidance schemes with the Inland Revenue.
Council tax help
    * Pensioners aged over 70 to get an extra £100 this year to help with their problems paying rising council tax bills.
Economic outlook
    * The chancellor opened his speech saying: "The purpose of this Budget is to lock in for Great Britain the economic stability that can and will endure."
    * The British economy grew by 2.3% in 2003, meeting Treasury forecasts.
    * The growth forecast remains at 3-3.5% for 2004 and 2005 and at 2.5-3% for 2006.
    * Claimant count unemployment was now at 2.9% on Wednesday's new figures - the lowest since 1993.
    * Manufacturing output is expected to grow by just under 2% this year and over 2% next year.
Housing
    * The deputy prime minister will consult on how to increase the supply and affordability of housing after Wednesday's Barker Review on homes' shortages.
Euro
    * The Treasury will review progress on joining the euro in the next Budget, but not now.
Borrowing
    * The government's fiscal rules have been met at every stage of the economic cycle, said Mr Brown.
    * The "golden rule" on balancing the books over the economic cycle will be met with a £11bn surplus.
    * The public sector borrowing for 2003/4 will be £37.5bn, falling to £23 billion by 2009.
Cutting bureaucracy
    * 20,000 civil servants to be moved out of Whitehall to the regions.
    * Department of Work and Pensions to lose more 30,000 staff over four years, with its Budget cut by more than 5% by 2008.
    * Customs and Excise and the Inland Revenue to be merged.
    * All departments will cut back room administration budgets by at least 5% by 2008.
Public spending
    * In 2006-07 and 2007-08, current spending will rise by 2.5%, with the money allocated in this summer's spending review.
    * Mr Brown said he had already rejected calls to freeze the defence, Home Office and transport budgets. Both defence and transport would get real terms increases, he said.
    * Education budget to rise to £8.1bn by 2008, with spending on early years teaching to rise to £669m.

For an indepth look at the budget, please click on the BBC News link below.

Links:
http://news.bbc.co.uk/1/hi/in_depth/uk/2004/uk_budget_2004/default.stm


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