2005 PRE-BUDGET REPORT SUMMARY

• Personal tax

• Employment issues

• Corporate & Business Tax

• Capital taxes and Trusts

• Environmental Measures

• VAT, Excise & other duties

• Anti-Avoidance Measures

VAT, Excise and Other Duties

Annual accounting scheme

The annual taxable turnover limit for joining the scheme is to increase from £660,000 to £1,350,000 with effect from April 2006.

Cash accounting scheme

The government has written to the European Commission with a view to increasing the turnover limit for joining the cash accounting scheme from £660,000 to £1,350,000 with effect from April 2006. This is an increase of more than 100% and may benefit up to one million small businesses.

Car fuel scale charges

The Chancellor announced in Budget 2005 the government’s intention to align the VAT car fuel scale charges with the income tax benefit in kind provisions. This new system is to come into force on 1 May 2007.

VAT and property

The government is introducing a package of measures to modernise, simplify and provide greater certainty for businesses dealing with some VAT and land and property matters. These will include:

• a new consultation on supplies where the legal and beneficial ownership in land has been separated

• guidance on the revocation of the option to tax after 20 years.

Other VAT measures

The government will be assessing options for providing more help in respect of bad debt relief. The outcome is to be reported in Budget 2006.

The 5% reduced rate is to be extended to the installation of wood-fuelled boilers in qualifying buildings with effect from 1 January 2006.

Alcohol industry

Customs has signalled an intention to repeal or simplify around 30 regulations that affect businesses in the alcoholic drinks industry. 

Gambling

Following a review of gambling taxation the government has decided to maintain the current regimes but has made some small modifications to align the tax regime with the Gambling Act.

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Disclaimer - for information of users
This summary is published for the information of clients. It provides only an overview of the Pre-Budget Report, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.