Pre-Budget report in detail - tax changes
Wednesday, 06 December 2006 12:00
Following Gordon Brown's pre-Budget report speech, the Treasury has released a full break-down of the tax changes that it involves.
In the wake of the report, income tax allowances, national insurance contributions, child and working tax credit, fuel duty and air passenger duty rates are all set to change.
There are also changes to the rates and allowances for the working and child tax credits, child benefit/guardian's allowance, income tax, national insurance contributions, fuel and air passenger duties.
In detail:
Working and Child Tax Credit rates 2007-08
| £ per year (unless stated) | 2006-07 | Change | 2007-08 |
| Working Tax Credit | |||
| Basic element | £1,665 | +£65 | £1,730 |
| Couple and lone parent element | £1,640 | +£60 | £1,700 |
| 30 hour element | £680 | +£25 | £705 |
| Disabled worker element | £2,225 | +£85 | £2,310 |
| Severe disability element | £945 | +£35 | £980 |
| 50+ Return to work payment (16-29 hours) | £1,140 | +£45 | £1,185 |
| 50+ Return to work payment (30+ hours) | £1,705 | +£65 | £1,770 |
| Childcare Element of the Working Tax Credit | |||
| Maximum eligible cost for one child | £175 per week | - | £175 per week |
| Maximum eligible cost for two or more children | £300 per week | - | £300 per week |
| Percentage of eligible costs covered | 80% | - | 80% |
| Child Tax Credit | |||
| Family element | £545 | - | £545 |
| Family element, baby addition | £545 | - | £545 |
| Child element | £1,765 | +£80 | £1,845 |
| Disabled child element | £2,350 | +£90 | £2,440 |
| Severely disabled child element | £945 | +£35 | £980 |
| Income thresholds and withdrawal rates | |||
| First income threshold | £5,220 | - | £5,220 |
| First withdrawal rate (per cent) | 37% | - | 37% |
| Second income threshold | £50,000 | - | £50,000 |
| Second withdrawal rate (per cent) | 6.67% | - | 6.67% |
| First threshold for those entitled to Child Tax Credit only | £14,155 | +£340 | £14,495 |
| Income disregard | £25,000 | - | £25,000 |
| £ per week | 2006-07 | Change | 2007-08 |
| Eldest/Only Child | £17.45 | +£0.65 | £18.10 |
| Other Children | £11.70 | +£0.40 | £12.10 |
| Eldest/Only Child (lone parent’s rate) | £17.55 | ABOLISHED | |
| Guardian’s Allowance | £12.50 | +£0.45 | £12.95 |
Income Tax Personal and Age-related Allowances 2007-08
| £ per year | 2006-07 | Change | 2007-08 |
| Personal allowance (age under 65) | £5,035 | +£190 | £5,225 |
| Personal allowance (age 65-74) | £7,280 | +£270 | £7,550 |
| Personal allowance (age 75 and over) | £7,420 | +£270 | £7,690 |
| Blind Person’s Allowance | £1,660 | +£70 | £1,730 |
| Married couple's allowance* (aged less than 75 and born before 6th April 1935) | £6,065 | +£220 | £6,285 |
| Married couple's allowance* (age 75 and over) | £6,135 | +£230 | £6,365 |
| Married couple's allowance* - minimum amount | £2,350 | +£90 | £2,440 |
| Income limit for age-related allowances | £20,100 | +£800 | £20,900 |
* Tax relief for the married couple’s allowance is given at the rate of 10 per cent
National Insurance Contributions, 2007-08| £ per week (unless stated) | 2006-07 | ||
| Lower earnings limit, primary Class 1 | £84 | +£3 | £87 |
| Upper earnings limit, primary Class 1 | £645 | +£25 | £670 |
| Primary threshold | £97 | +£3 | £100 |
| Secondary threshold | £97 | +£3 | £100 |
| Employees’ primary Class 1 rate between primary threshold and upper earnings limit | 11% | - | 11% |
| Employees’ primary Class 1 rate above upper earnings limit | 1% | - | 1% |
| Employees’ contracted-out rebate - salary-related schemes | 1.6% | - | 1.6% |
| Employees’ contracted-out rebate - money-purchase schemes | 1.6% | - | 1.6% |
| Married women’s reduced rate between primary threshold and upper earnings limit | 4.85% | - | 4.85% |
| Married women’s reduced rate above upperearnings limit | 1% | - | 1% |
| Employers’ secondary Class 1 rate abovesecondary threshold | 12.8% | - | 12.8% |
| Employers’ contracted-out rebate, salary-related schemes | 3.5% | +0.2% | 3.7% |
| Employers’ contracted-out rebate, money-purchase schemes | 1% | +0.4% | 1.4% |
| Class 2 rate (per week) | £2.10 | +£0.10 | £2.20 |
| Class 2 small earnings exception | £4,465 per year | +£170 | £4,635 per year |
| Special Class 2 rate for share fishermen (per week) | £2.75 | +£0.10 | £2.85 |
| Special Class 2 rate for volunteer development workers | £4.20 | +£0.15 | £4.35 |
| Class 3 rate (per week) | £7.55 | +£0.25 | £7.80 |
| Class 4 lower profits limit | £5,035 per year | +£190 | +£5,225 per year |
| Class 4 upper profits limit | £33,540 per year | +£1,300 | £34,840 per year |
| Class 4 rate between lower profits limit and upper profits limit | 8% | - | 8% |
| Class 4 rate above upper profits limit | 1% | - | 1% |
| Pence per litre (unlessstated) |
Old duty rate |
Change |
New duty rate |
| Ultra-low sulphur petrol/diesel | 47.1p | +1.25p | 48.35p |
| Sulphur-free petrol/diesel | 47.1p | +1.25p | 48.35p |
| Biodiesel | 27.1p | +1.25p | 28.35p |
| Bioethanol | 27.1p | +1.25p | 28.35p |
| Liquefied petroleum gas used as road fuel |
9p per kg |
+3.21p per kg (equivalent to 2.25p per litre) |
12.21p per kg |
| Natural gas used as road fuel |
9p per kg |
+1.81p per kg (equivalent to 1.25p per litre) |
10.81p per kg |
| Rebated gas oil (red diesel) | 6.44p | +1.25p | 7.69p |
| Fuel Oil | 6.04p | +1.25p | 7.29p |
Air Passenger Duty Rates from 1 February 2007
| £ per UK flight departure |
Old duty rate |
Change |
New duty rate | |
| Passengers flying to EEA destinations and certain other European countries | In lowest class of travel | £5 | +£5 | £10 |
| In other than lowest class of travel | £10 | +£10 | £20 | |
| Passengers flying to other destinations | In lowest class of travel | £20 | +£20 | £40 |
| In other than lowest class of travel | £40 | +£40 | £80 | |
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