2003/04 |
2004/05 |
Increase (£) |
|
| Income tax allowances | |||
| Personal allowance | 4,615 | 4,745 | 130 |
| Personal allowance for people aged 65- 74 | 6,610 | 6,830 | 220 |
| Personal allowance for people aged 75 and over | 6,720 | 6,950 | 230 |
| Income limit for age-related allowances | 18,300 |
18,900 |
600 |
| Married couple’s allowance for people born before 6 April 1935 | 5,565 |
5,725 | 160 |
| Married couple’s allowance – aged 75 or more | 5,635 | 5,795 | 160 |
| Minimum amount of married couple’s allowance | 2,150 | 2,210 | 60 |
| Blind person’s allowance | 1,510 |
1,560 |
50 |
| Pension schemes earnings cap | 99,000 |
not announced |
|
| Lower Earnings Limit | £79 per week |
| Upper Earnings Limit | £610 per week |
| Primary Threshold/Secondary Threshold | £91 per week |
| Employees primary Class 1 rate (A ee) | 11% of £91.01 to £610, plus 1% of above £610 per week |
| Employees contracted out rebate | 1.6% |
| Married women's reduced rate | 4.85% of £91.01 to £610, plus 1% above £610 per week |
| Employers secondary Class 1 rate (A er) | 12.8% above £91 per week |
| Employers COSR rebate | 3.5% |
| Employers COMP rebate | 1.0% |
| Class 2 rate | £2.05 per week |
| Class 2 small earnings exception | £4,215 per year |
| Class 2, Share Fishermen | £2.70 per week |
| Class 2, Volunteer Development Workers | £3.95 per week |
| Class 3 | £7.15 per week |
| Class 4 Lower Profits Limit | £4,745 per year |
| Class 4 Upper Earnings Limit | £31,720 per year |
| Class 4 Rate | 8% of £4,745 to £31,720 per year, plus 1% above £31,720 per year |
| per week | 2003/04 |
Change |
2004/05 |
| Child Benefit | |||
| Eldest/Only Child | £16.05 |
(+0.45) |
£16.50 |
| Other Children | £10.75 |
(+0.30) |
£11.05 |
| Eldest/Only Child (Lone Parent Rate) | £17.55 |
(+0.00) |
£17.55 |
| Guardian’s Allowance | £11.55 |
(+0.30) |
£11.85 |
"The Inland Revenue is increasing compliance activities in the Construction sector to ensure that everyone understands and meets their tax obligations. To tackle non-compliance in the construction industry by contractors routinely ignoring their responsibilities both as contractors and employers, and by sub-contractors using artificial schemes. As part of the reform of the Construction Industry Scheme, there will be a new employment status declaration for contractors, and the Inland Revenue will be increasing its compliance activities in this sector to ensure that all involved understand and meet their tax obligations."
"The law will be clarified in cases where connected third parties, such as companies in the same group as the employer, make payments to employees. Regulations will be laid before Parliament shortly to ensure these payments cannot be treated as gratuities exempt from National Insurance Contributions. These changes will not affect tips paid to waiters and others in similar employment."
"The Government is committed to an enterprise economy and promoting productivity. To reduce the burdens on business and cut red tape, the Pre-Budget Report announces: a new Construction Industry Scheme from April 2006, reducing the regulatory burden on the industry, improving compliance and helping it to get the status of its workers right."
"The Chancellor announced in Budget 2003 that a new Construction Industry Scheme would be introduced in April 2005. This scheme has been developed in detailed discussions with the industry, who have expressed concern that the April 2005 start date would leave it insufficient time to prepare properly for the change. The Government therefore decided that, in order to ensure a smooth and orderly transition to the new scheme, implementation will be deferred until April 2006. The Government plans to include the necessary legislation in Finance Bill 2004."
"The Inland Revenue is increasing compliance activities in the Construction sector to ensure that everyone understands and meets their tax obligations. To tackle non-compliance in the construction industry by contractors routinely ignoring their responsibilities both as contractors and employers, and by sub-contractors using artificial schemes. As part of the reform of the Construction Industry Scheme, there will be a new employment status declaration for contractors, and the Inland Revenue will be increasing its compliance activities in this sector to ensure that all involved understand and meet their tax obligations."
"Employer Training Pilots (ETPs) were introduced in six local Learning and Skills Council (LSC) areas in September 2002 to test new measures to improve access to training. ETPs offer a package of support to help low-skilled people in work gain basic skills or their first level 2 qualification. Employers that offer their low-skilled staff paid time off to train are provided with compensation for wage costs (varying according to pilot area and size of firm). Training is free or heavily subsidised, and is delivered in the way that most suits the employers' businesses. Both employees and employers are offered free information, advice and guidance. The pilots were extended for a further year and doubled to cover six new areas in the 2002 Pre-Budget Report.
An independent evaluation of the first year of the pilots was published on 4 December 2003. The evaluation showed that ETPs are proving successful at engaging employers and their low-skilled employees in training. At the end of the first year, over 3,000 employers and 14,000 employees were involved in the scheme. Over 70 per cent of employers taking part had fewer than 50 employees and 40 per cent had no previous contact with a government agency - suggesting that ETPs are reaching workplaces where training has not been a high priority in the past.
Building on the success of this programme, the Government is now extending ETPs for a third year. ETPs will launch in six further local LSC areas, bringing the total to 18 - a third of England. This will enable the Government to explore further the impact of the existing pilots on the demand for training."
A document has been published entitled "Simplifying the taxation of pensions". This document sets out the simplified regime and wishes to consult on the detailed proposals. The proposals described in this document represent an important part of the Government’s pensions strategy.
You can download the 84 page document from: http://www.inlandrevenue.gov.uk/pbr2003/simplifying-pensions.pdf
Text of Inland Revenue News Release:
The Government announced today that the tax and National Insurance treatment of employer-supported childcare would be reformed from April 2005. The new arrangements will add to the existing tax and National Insurance exemption on workplace nurseries, encouraging employers to help their staff to meet the cost of good quality childcare. Employers will be able to contract direct with a nursery, childminder or after-school club on behalf of their staff and the benefit-in-kind of the provision - up to £50 a week - will be tax and National Insurance free. Or they can provide childcare vouchers to employees free of tax and National Insurance, again up to £50 a week, which their employees will be able to use for registered childcare or approved home-childcare.
Commenting on the announcement of the changes, the Paymaster General Dawn Primarolo said: "Employers have a very important role to play in helping parents to balance work and family life and particularly in helping parents to meet their childcare needs. We are committed to supporting them in this and today's announcement will help to ensure that that more parents have access to affordable, good quality childcare".
Currently employees are exempt from both tax and
National Insurance when an employer provides a place in a nursery that they wholly or
partially fund and manage (a "workplace nursery"). The announcement extends the
tax and National Insurance exemption to the direct provision of childcare
(employer-contracted childcare) and childcare vouchers subject to the following rules:
- The childcare used must be either registered childcare or approved home-childcare - this
is in line with the Government's commitment to only support safe, good quality care.
- The exemptions will be limited to £50 a week to ensure that they are affordable and
fairly targeted.
- To qualify for the exemption employers will have to ensure that where childcare schemes
operate they are generally accessible to all staff.
The Government believes that this measure will, over time, increase the financial help available to 100,000 working families through employer childcare support schemes.
Draft legislation to implement these changes will be published in January 2004.
The Government announced in 2002 Pre Budget Report that it would consider new tax and National Insurance incentives to expand employer support for childcare.
The Inland Revenue and HM Treasury held a formal consultation on new proposals between 25 February 2003 and 31 May 2003. The consultation document is at www.inlandrevenue.gov.uk/consult_new/esc.pdf
A summary report of the responses to the consultation was published on 17 September 2003. This can be accessed at www.inlandrevenue.gov.uk/consult_new/esc_responses.pdf
This paper considers the role that professional bodies and other membership-based organisations can play in developing workforce skills and development. It reviews the rules affecting the tax treatment of fees and subscriptions to professional bodies, as announced by the Chancellor of the Exchequer in Budget 2003. It outlines the principles upon which the review is based, describes the current rules, and considers how well these rules meet the Government’s objectives. Finally, it invites comments in response.
Download the 28 page document from: www.hm-treasury.gov.uk/media//5F1C2/membership_discussion_223.pdf
Test of DWP News Release:
A major package of initiatives to help lone parents overcome barriers to work, make sure work pays and make childcare accessible for all was announced in the Pre-Budget report this afternoon.
Secretary of State for Work and Pensions, Andrew Smith said the measures totalling over £20 million would build on the success of the New Deals and the creation of Jobcentre Plus, which is ensuring the UK has record numbers of people in jobs and the lowest unemployment for a generation.
As the Department for Work and Pensions and HM
Treasury published a major study "Full Employment in Every Region" as part of
the PBR, Mr Smith said: "Many lone parents want to work so they can provide a better
future for their families. It is our job to help bring down the barriers that stand in
their way and give everyone the help they need to fulfil their potential and make work
pay. "By paying for registered childcare for a week before lone parents start work
and by giving those receiving the Work Search Premium of £20 per week help with childcare
while they undertake worksearch, we will make it easier practically and financially for
lone parents to get a job.
"We know in London families face particularly high housing and childcare costs that
sometimes get in the way of making the move off benefits and into work. To make sure it
pays to work, we will extend to lone parents and couples with children, who have been out
of work and on certain benefits for a year or more, an extra £40 a week for the first
year of work."
The full package for lone parents includes:
- Paying for registered childcare for lone parents who need it and who receive the Work
Search Premium while they look for work from October 2004
- Paying for one week of registered childcare for everyone on New Deal for Lone Parents
who need it in the week before they start work from April 2005
- Extending lone parent In-Work Credit pilots to lone parents and couples with children
across London who have been on qualifying benefits for a year - this will give an extra
£40 a week for the first year of a new job starting from April 2005
- Extra Work-Focused Interviews for lone parents on Income Support whose youngest child is
14 or over - quarterly interviews will begin from October 2005
- A compulsory action plan will be completed for lone parents when attending their regular
Work Focused Interviews from October 2004.
Other Welfare to Work measures in the pre-budget
report include:
- Piloting a new mandatory jobsearch and motivational course for all jobseekers over 25
who have been out of work for six months - scheduled to start June 2005
- Extension of Action Team for Jobs for a further two years until April 2006, including
the creation of two new teams in Wear Valley and Barrow-In-Furness
- Package of measures to promote self employment, including a review of the routes off
benefits into self-employment and a leaflet produced by Jobcentre Plus and Business Links
signposting available support for those on benefits who wish to set up their own business
- Voluntary personal adviser support for those on Incapacity Benefit from April 2004
- Quarterly Work-Focused Interviews for parents in workless households who have been on
certain benefits for a year or more and have children over 12, who could benefit from the
extended schools childcare pilots from September 2004
- Extending eligibility for the New Deal for Partners for those in a family in receipt of
the Working Tax Credit, who are either not working or working up to 16 hours a week on a
pilot basis from October 2004.
Further information:
http://prebudget2003.treasury.gov.uk/
http://www.inlandrevenue.gov.uk
http://www.hm-treasury.gov.uk
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