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  Help and Advice from Sheppards Chartered Accountants
The 2007 Budget proposed the following tax changes:

Business Tax
First year capital allowances at 50% are extended for a further tax year starting 6 April 2007 for traders and from 1 April 2007 for limited companies. Tax Allowances will be made available for the renovation of business premises from 11 April 2007.

Corporation Tax
The small company's rate, for companies with profits up to £300,000, is increased from 19% to 20% from the financial year 2007/8 starting 1 March 2007.

Value Added Tax
The VAT registration limited is increased from £61,000 to £64,000, and the deregistration limit from £59,000 to £62,000 from 1 April 2007.

Child and Working Tax Credits
 
2007/8
2006/07
Basic
1,730
1,665
Childcare element –
One child
175 pw
175 pw
Two or more
300 pw
300 pw

The percentage of eligible childcare costs covered is increased from 70% in 2006/7 to 80% in 2007/8. The income disregard is ?25,000 in each tax year. The first income threshold is ?5220.

National Insurance
The National Insurance band is raised to ?100 a week before employees and employers pay class 1 National Insurance and self employed traders pay class 4 National Insurance.

The class 2 rate is raised to ?2.20 a week from ?2.10 from 6 April 2007.

Landlords Energy Saving Allowances
The energy saving allowance for let residential properties now includes floor insulation and is increased to ?1,500 for expenditure on each dwelling from 6 April 2007 until 2015 which can be claimed (previously ?1,500 each building).

National Minimum Wage
The minimum wage hourly rates for adults (over 22), youths (18-21) and 16/17 year olds are as follows :-
 
Oct 2006
Oct 2007
Adult
5.35
5.52
Youth
4.45
4.60
16/17 yr olds
3.00
3.40

Please contact Yvonne or Ian Sheppard if you would like to discuss in more detail these changes for 2007/08 and whether you can benefit from tax and financial planning.
Current Rates of UK Tax

 
2007/08
2006/07
Personal Allowance
General
£ 5,225
£ 5,035
aged 65 or over
£ 7,550
£ 7,280
aged 75 or over
£ 7,690
£ 7,420
age allowance income limit
£20,900
£20,100
MCA (10% relief)
aged 75 or over
£ 6,365
£ 6,135
or under
£ 6,285
£ 6,065


Income tax rates    
Starting rate 10%
£ 2,230
£ 2,150
Basic rate 22%
- up to
£34,600
£33,300
Higher rate 40%
- over
£34,600
£33,300
Lower rate 20% (investment income and capital gains)
Capital Gains    
Exempt
£ 9,200
£ 8,800
Inheritance tax threshold
£300,000
£285,000


Corporation tax    
Small companies (£0 - £300,000)
20%
19%
Main rate (£300,000 - £1,500,000)
30%
30%


National Insurance    
Class 1 - lower earnings limit
£87
£84
  weekly earnings above
£100
£97
  Employers
12.8%
12.8%
  Employees
11.0%
11.0%
  Employees above £670 pw
1.0%
1.0%
 
(2006 £645 pw)
Class 2 - self employed weekly
£ 2.20
£ 2.10
Small earnings exemption limit
£ 4,635
£ 4,465
Class 4 - Rate
8.0%
8.0%
  Band
£5,225-
£34,840
£5,035-
£33,540
Above £34,840 per year (£33,540-2007)
1.0%
1.0%


VAT  
Standard Rate 17.5%
Lower Rate 5 %
 
telephone 01752 220333 or email us at accounts@sheppardsaccountants.co.uk