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 UK Budget 2001.
Overview

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CLICK HERE FOR BUDGET 2006-2007

March 7 2001

Post Budget Overview 2001

Business

• Consultation on a simplified VAT regime for firms with a turnover of up to 600,000.

• Proposal to introduce a lower VAT rate for firms with turnover from 54,000 to 100,000.

• VAT threshold raised to 54,000 for small businesses.

• Annual company accounts will become basis for calculating tax (See comments).

• Capital gains rate for employees in all types of companies cut to 10p from 40p.

• Move to allow pension funds to invest in venture capital.

• Ensure there is a clearer duty on pension fund managers to promote the interests of beneficiaries.

• Extension of the enterprise management incentive scheme so all employees can benefit from share options in the qualifying companies.

• Modernisation of the corporation tax system to meet the needs of a more knowledge based economy.

• The government will launch a consultation on the best way to extend a research and development tax credit to larger companies.

• New tax credit in a bid to accelerate research on diseases like Aids and Malaria.

Tax

• First 1,880 earned will be taxed at 10%.

• Six pence increase on a pack of 20 cigarettes.

• Duty frozen on wine, beer and whisky.

• Threshold for inheritance tax raised to 242,000.

• For the next five years up to 7,000 a year of savings can generate income and capital gains that will be tax free.

• 100% tax relief for investment in environmental technology.

• Minimum wage to be increased to 4.10 per hour from 3.70.

Vehicle and fuel duty

• Petrol tax cut by 2p per litre for unleaded petrol until June.

• Duty on ultra low sulphur diesel to be cut by 3p.

• Lead replacement petrol will be cut by 2p a litre.

• All fuel duty changes to be in place by 1800 GMT on Wednesday.

• Landfill tax up to 12 per tonne from 11.

• Duty on road fuel gases will be frozen until 2004.

• Vehicle excise duty abolished for all tractors.

• 70% all newly purchased cars will get a reduced licence fee - applies to engines under 1.5 litres.

Education and health

• In total 1bn to hospitals and 1bn to schools over three years.

• New 200m fund for extra teachers.

• Education spending set to rise by 5.2% a year after inflation.

• Headteachers of every primary school will receive 13,000 with larger schools receiving 63,000.

• Headteachers of every secondary school will receive for the smaller schools 68,000 and larger schools 115,000.

• 135m fund for recruitment of front line staff for the NHS.

• Between 500,000 and 1m for acute hospital trusts.

Families

• Maternity pay will be increased from 60 to 75 in successive stages.

• From June the child care tax credit will pay up to 70% of child care costs - instead of 100 per week as at the moment.

• Statutory obligation to maternity pay will be raised from 18 weeks to 26 weeks.

• Two weeks' paid paternity leave to be introduced.

• Children's tax credit be paid at 10 per week.

• Families receiving the higher children's credit and maternity pay will up to 2,240 a year better off.

• All lone parents on income support required to have regular interviews from 2002.

Pensions and benefits

• Winter allowance, the Christmas bonus and free TV licence for the over 75s will be retained.

• Seven and a half million pensioners will now pay no tax or tax at the 10% rate.

• Pension credit will be linked not just to prices but to earnings every year and pensioners' tax allowances will be linked to earnings from 2003.

• 40m help for the 30,000 benefit claimants who have been drug addicts.

Inner city regeneration

• 1bn package to speed up regeneration.

• New community investment tax credit. 100% capital allowances to renovate empty flats over shops.

• Stamp duty abolished in designated areas to bring disused properties back into use.

• Regional development agencies to get new financial flexibility.

• 150% tax relief for cleaning up contaminated land.

Other changes

• Guaranteed minimum income for severely disabled people on benefit of 142 a week.

• 4bn extra will be made available for the government's priorities each year.

• 200m to fight war on drugs.

• VAT change to ensure free entrance to museums.

• Film industry tax incentive will be extended to 2005 at a cost of 50m next year.

• VAT reduction on church repairs from 17% to 5%.

Further Information.

Most of this information was sourced from BBC news.
Visit their Web Site for further information: [click here]



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last modified: 21-March-2001