Gordons latest announcements will affect almost everyone in some way or another.

For the tax year starting 6th April 2007, the usual annual increase has applied to income tax, national insurance, capital gains tax, inheritance tax, personal allowances and VAT thresholds.

There was the expected green tinge to the Budget with increases to vehicle excise duty at the top end and encouragement to invest in environmentally friendly expenditure, however these changes were not as significant as some may have liked to see.

From April 2008 the mainstream corporation tax rate of 30% is to be reduced to 28%.  In the meantime, the small companies rate of 19% has increased to 20% from 6th April 2007 and this will rise in stages to 22%.  In addition to this, the standard capital allowance of 25% is to be reduced to 20%, affecting many businesses but the most significant changes not being seen until next year.

Those of you using the VAT scale charges will need to check the new rules for calculation of the VAT as it will now be based upon CO2 emissions.

Significant changes will also be seen to the income tax regime from April 2008, with the existing 10% rate band being abolished and the basic rate of tax being reduced from 22% to 20%. This will actually raise tax for those earning less than about £18,500, so it is to be hoped that tax credits will make up the gap.

The most significant changes will therefore not actually come into play until next year .

Our budget newsletter is attached to this email, the first page is commentary of the budget and the second attached page is the budget facts and figures. If you require a printed laminated copy of the budget newsletter please email Cheryl@a4gsolutions.co.uk .