Families and Children
Families and Children
The working families tax credit will rise by £5 a week from June and the newchildren's tax credit introduced next month will be increased from £8.50 to £10 a week. Maternity pay will be boosted from £60 to £75 next year and in 2003 to £100 a week, when the legal obligation to maternity pay will be lengthened from 18 to 26 weeks. Parents who adopt will for the first timereceive similar benefits. From April next year, for families with new-born children, the children's tax credit will be raised to more than £1,000 a year and paid to all households where the main earner is paid up to £50,000 a year.
Home and Work
The Chancellor proposed from April at a cost of £200m a new employment regime built around more intensive coaching and stronger sanctions for the over-25s. For 30,000 benefit claimants who have been drug addicts, a £40m three-year budget means they can have mentoring and training, but they will have to get off drugs. Under phase two of the New Deal, lone parents will also be offered self-employment, and in all cases will be offered help for child care.
Growing companies offering share options will benefit from an extension of reliefs as well as a doubling of the share option limits. The benefits will extended to all employees.
Six tax breaks will be introduced to promote urban regeneration, at a cost of £1bn over five years. The measures include the abolition of stamp duty when buying property in deprived inner-city areas, bringing land back into use and accelerated tax relief on cleaning up contaminated land. A new grant will be available to cut the costs of saving and repairing listed church buildings. Tax changes will be considered to help non-profit sports clubs, and free admission to all national museums will move closer through VAT reforms.
Alcohol and Cigarettes
Duty on spirits, wine and beer will be frozen, but that on cigarettes will rise only in line with inflation. After talks with the betting and gaming industry, betting duty will be abolished from 1 January. The tax on bookmakers' gross profits will be 15 per cent, which leading bookmakers have agreed not to pass on to customers. All rates of car vehicle excise duty will be frozen for the next financial year. The £55 reduction in car tax will be extended to all cars up to and including 1500cc. For lorry owners the 100 separate licence rates will be consolidated into seven rate bands.
In addition to the 1p cut in ultra-lowsulphur petrol last October, the duty on ultra-low sulphur petrol will be further cut by 2p per litre. To make sure allmotorists can benefit from this cut, it will be extended to unleaded petrol until 14 June. There will be a similar cut in excise duties in ultra-low sulphur diesel. Duty will be cut radically on alternative fuels.
A new tax credit may be introduced to help Britishcompanies contribute to the relief of disease round the world, an incentive to accelerate research on diseases such as Aids, TB and malaria.
Spending on public services will be increased by 3.7 per cent a year by2003-04. A £800m boost is promised for school budgets, repairs and to entice former teachers back to the classroom. Within the NHS, acute hospital trusts will each receive extra money of between £0.5m and £1m annual for the next three years. Cash for GP trusts will follow. A £135m fund will be created for recruitment of front-line NHS staff, with the target of an extra 20,000 nurses by 2004. Transport spending will rise by 20 per cent a year over the next three years. A three-year budget of £200m will be created to fight drugs.
Banking and Finance
The minimum funding requirement, designed to protect occupational pension schemes, will be replaced with a new funding standard and tax and regulatory reforms will be introduced to make it easier for life insurers and pension funds to invest in venture capital. That will ensure a strengthened role for pension fund trustees and a clearer duty on fund managers to promote beneficiaries' interests.
Budget arithmetic, Gordon Brown's new tax cuts and spending increases amounted to a headline £3.6bn a year giveaway, much as trailed. The Chancellor said the economy grew at 3 per cent last year, with manufacturing up by 1.6 per cent despite the strength of sterling against the euro. The Treasury reiterated forecasts that growth will be between 2.25 per cent and 2.75 per cent for each of the next three years. Inflation is seen at 2.25 per cent this time next year and on target at 2.5 per cent at the end of next year. No change was made to the inflation target. The net cash repayment of the national debt will be £34bn this year. Page 16
The Government will consult on a new tax relief for intellectual property and goodwill, and will assess the introduction of tax reliefs for when companies sell substantial shareholdings. VAT will be simplified for small business, and existing thresholds will be raised so that, for example, firms with a turnover of up to £54,000 will not pay VAT at all.
Annual company accounts will be the basis for calculating tax for small companies.Reuse content