2006 Pre-Budget Report Summary

Chancellor Gordon Brown presented his tenth Pre-Budget Report on Wednesday 6 December. Many expect this to be his last Pre-Budget statement before Tony Blair steps down as Prime Minister. 

The speech itself may have seemed short on content but the detail was in the accompanying press releases and other documents. The major changes are set out below. 

Individual Savings Accounts (ISAs) – will become a permanent feature of the savings landscape with simplification of the rules for mini and maxi ISAs. Personal Equity Plans will also be brought within the ISA ‘umbrella’.

Alternatively Secured Pensions (ASPs) – changes will be made to the rules for ASPs. These pensions are designed for those individuals who have a principled religious objection to annuitisation. 

Construction Industry Scheme (CIS) – the new CIS becomes effective from 6 April 2007. The government has announced an increase in the standard deduction rate applied to subcontractors to 20% from the current 18%. A higher deduction rate of 30% is also introduced in the new scheme which allows unregistered subcontractors to start work. 

Managed Service Companies (MSCs) – new rules will be introduced to ensure that those working in MSCs pay tax and NIC at the same level as other employees.

The summary reviews the highlights. However if you would like to receive a more comprehensive review of the proposed changes please contact us and we will send you a more detailed summary by post or email. 

Also contact us if you would like to discuss anything in more detail or take action on any of the points raised.

• Personal tax

• Employment issues

• Corporate & Business Tax

• Capital taxes

• VAT

• Environmental Measures

• Other Matters

Disclaimer - for information of users
The Budget proposals may be subject to amendment in the Finance Act. You are therefore advised to contact us before taking any action as a result of the contents of this summary.