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| CURRENT SECTION :: IR35 / IR591 | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Gordon Brown will begin making what could be his most controversial budget yet at 12.30 today. Read what happens with IR591, IR35 and anti avoidance schemes. Continuous updates from 12.30. Mr Brown said the purpose of his Budget statement was to lock in the economic stability "that can and will endure". Since 1997 Britain has sustained growth through two economic cycles without suffering the "all British disease of stop go". Britain is, apparently "enjoying its longest period of sustained economic growth for 200 years" To become a world economic leader, Britain must make the necessary investment in science, education and enterprise. Britain had met his forecast economic growth target of 2.3%. Mr Brown said that growth came together with low inflation, low interest rates and low unemployment (He didn't mention the huge tax increases under Labour and the offshoring, not surprisingly!) The chancellor said: "Britain is closer to full employment today than for a generation." (Most of them civil servants) Inflation is expected to be 1.75% this year and 2% next year and the year after. (This could be good news for mortgage rates) On housing, Mr Brown said the government accepted the recommendations by economist Kate Barker in relation to the rented sector. He said it "must be in the interests of the whole country" for the environment to be safeguarded, there to be more affordable housing and low interest rates (Hmm, so who is going to pay for this "affordable" housing I wonder?) Mr Brown said it was right for Britain's unemployed to move from welfare to work and for the level of pensioner credit to rise He is aiming to keep the debt to GDP ratio low and stable while balancing the current Budget, allowing Britain to borrow for investment. These rules have been tested and have succeeded at every stage of the last two economic cycles. (Presumably success is defined as more tax and poorer public services) Debt this year is 33% of national income and "should be kept below 40% of national income" Mr Brown said net borrowing this year and in future years to 2008-9 is as a percentage of GDP 3.4%, 2.8%, 2.5%, 2.1%, 1.9% and 1.6% of GDP. He said said debt was lower than Britain's competitors and that was why he was able to afford all the country's existing commitments in Iraq and Afghanistan (Cool - that's OK then!) Unemployment is costing the UK £3bn a year less than in 1997, said Mr Brown (the only problem is the extra 500,000 civil servants which cost us far more than those savings, and contribute precisely nothing to society) Mr Brown said the priorities for this country were to entrench stability and ensure and enhance security (for whom I wonder?) Mr Brown said he would freeze rates on tax and capital gains tax, air passenger duty, insurance premium tax, on vehicle excise duty and the climate change levy, and on the aggregates levy, betting duties and stamp duty. (Surprise re the Stamp Duty, and good news on the Capital Gains which can come in useful for contractors. Bad news is that he's got to get that extra tax from somewhere) He will exempt more estates from inheritance tax, raising the starting point for tax to £263,000 (That will please the extra 47 people it affects then) From 1 April, firms with turnovers under £58,000 will not have to register for VAT and 13,000 businesses will be eligible to benefit from simplified VAT accounting (Not of any real interest to contractors) Mr Brown said the government will relocate out of Whitehall a total of 20,000 public services jobs (why don't they just get rid of them? Who would notice?) British film makers will get 20% tax relief which presumably will make amends for the loss of the 40% relief the old film partnerships got. Mr Brown said duty frozen on spirits, but the cost of a packet of cigarettes will rise by 8p. Also 1p on a pint of beer, 4p on a bottle of wine, duty frozen on cider and sparkling wine Mr Brown said until March 2006, churches and sacred places will be able to reclaim all 17.5% of VAT (No, your home office doesn't count!) He said the choice in this Budget was whether to cut tax rates or continue a programme of rising public investment in order to keep the country stable, secure and economically strong Mr Brown said he hoped all MPs agreed with the long term case for investment in education, science and enterprise. It was the duty of the whole nation to put short term considerations second (Why do I get the feeling we are being softened up?) The Department of Work and Pensions is announcing from today a reduction of 40,000 staff posts, a redeploymnet of 10,000 posts to new priorities and an overall reduction over four years of 30,000 posts, said Mr Brown. Staff numbers falling from 130,000 now to 100,000 by 2008 The Inland Revenue and Customs and Excise announcing a gross reduction of 14,000 staff, redeployment of 3,500 staff and an overall reduction by 2008 of 10,500 staff (Now this is good news. Where's the catch?) Mr Brown said the NHS will receive a real terms rise of 7.2% each year until 2008 (By which time presumably it will be taking up the entire GDP and still delivering a third rate service) The spending review will provide for real terms growth in transport in the country, Mr Brown said, rejecting calls for spending on housing, local government and services to the elderly to be frozen (Here come the tax increases I think) The government was announcing a 10-year framework for medical science. By 2008 the budget for medical research and research development within the NHS will approach £1.2bn each year (Could be good news for contractors) Mr Brown announced a New Deal for Skills which will guarantee every adult an opportunity to gain Level 2 skills. Every teenager will have the offer of training or education until age 18. There will be up to 1,000 more specialist schools designated. The capital investment budget for English education will rise to £8.1bn a year by 2008. By 2015 every secondary school can be refurbished or rebuilt with world class technology (By 2015!! Please, don't let Labour still be in power) Mr Brown said pensioners over 70 to get an extra £100 to help them cope with council tax bills. Finally, some news for contractors: In line with projections, Mr Brown said he would tax dividends that incorporated companies pay their shareholders, clawing back some of the £1bn that small businesses gained through the zero corporation tax measures announced two years ago. This looks as though there will be a removal of the 10% tax credit for dividends, although more clarity will come from the press releases issued shortly. Mr Brown said the Treasury would clamp down on tax avoidance by closing loopholes, and requiring accounting firms to disclose tax avoidance schemes to the Inland Revenue Mar 17, 2004 Email this article Printer friendly page Previous Page
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