Budget 2007


Personal Income Tax

National Insurance Contributions


Savings & Investments


Capital Gains Tax

Stamp Duty Land Tax

Inheritance Tax

Corporation Tax

Business Tax

Value Added Tax

Other Measures

Tax Tables

National Insurance

Value Added Tax

Registration thresholds

The level of turnover at which a business has to register for VAT is increased from £61,000 to £64,000 with effect from 1 April 2007. The deregistration threshold will increase from £59,000 to £62,000.

Fuel scale charges

The VAT charge on a business which buys car fuel and allows private use of it changes completely for the first VAT return period commencing from 1 May 2007 onwards. The new charge depends on the CO2 emissions rating of the car, but is not based on a formula as the income tax benefit in kind is. This means it is necessary to look up the exact figure in the full table.

Example rates for a three month period are:

  • up to 140g/km: £27.11 VAT (was £40.66 for engine size up to 1400cc);

  • over 240g/km: £63.45 VAT (was £75.66 for engine size over 2000 cc)

The charge is still supposed to be related to the estimated cost of the fuel used rather than imposing a "green" penalty to discourage such use.

Transfer of going concern

Where a business is transferred as a going concern, VAT legislation requires that the records are handed over to the new owner. From 1 September 2007 the rules will be changed to recognise that this is often not practical.

Carousel fraud

The Treasury has suffered huge losses to frauds based on the movements of goods around the EU - mainly computer chips and mobile phones. The Budget included one measure aimed at cutting these losses - the extension of rules which can impose liability for unpaid VAT where a fraudulent trader "disappears" with money owing to Customs. Anyone involved in international transactions in computers, phones and electronic goods need to be aware of these changes, which take effect from 1 May 2007.

A separate announcement was made before the Budget confirming that the "reverse charge" procedure will be applied to domestic sales of these categories of goods from 1 June 2007. Again, those who buy or sell such goods need to assess the effect in good time.

Tax Trap

Don't get caught doing business with a carousel fraudster.

Stop smoking (in a year)

From 1 July 2007, the rate of VAT on nicotine patches and other products to help people stop smoking will be cut for one year from 17.5% to 5%.

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