A Budget in Uncertain Times

Against a background of war in Iraq, Chancellor Gordon Brown delivered a low key Budget. There were no big surprises and little relief for the hard pressed private sector. Despite the economic uncertainty, the Chancellor said that Britain was well placed to deal with the impact of global events and would benefit from the coming global upturn.  He continued with themes now familiar from his previous Budget statements. This year, Brown set out a vision of building a Britain of economic strength and social justice, a Britain that is enterprising, flexible and fair.
 

• Improvements to the Research and Development tax credit scheme for companies
• Modernising the Stamp Duty regime for UK land and buildings, including new compliance and enforcement powers, tough anti-avoidance measures, and a new regime for leases from  1 December 2003
• Extending the 100% first-year capital allowances for information and communication technology until 31 March 2004
• Inflation increases in road fuel duties are deferred until 1 October and there are new incentives for environmentally-friendly road fuels
• A package of support for new and growing businesses designed to improve access to finance, simplify tax and red tape
• Further reform of Capital Gains Tax (CGT) including measures to simplify the regime and an extension of business assets taper relief to improve access to let property for unincorporated traders
• A compliance and enforcement package designed to protect direct tax revenues and increase tax yield by £1.6 billion over three years
• A series of measures to simplify VAT for businesses, including an increase in the registration threshold in line with inflation and extension of the optional flat rate and annual accounting schemes to businesses with turnover of up to £150,000
• A package of measures to simplify employee share schemes to encourage companies to offer shares to their employees
• Corporation Tax rates remained unchanged and consultation on modernising the Corporation Tax regime continues
• On personal taxation the income tax bands have increased by indexation; there is no change in income tax rates and the income tax personal allowances for those aged under 65 are frozen
• In a bid to in still the saving habit in future generations, a new Child Trust Fund is being set up for children born from September 2002 with an initial endowment at birth of £250, rising to £500 for the poorest families.

This summary consists of notes on the Budget presented to Parliament on 9 April 2003 (as expanded by government press releases) together with other information relating to the fiscal years 2002/03 and 2003/04. The information therein reflects our understanding of the Chancellor’s proposals. However, changes are frequently made to detailed provisions before the Finance Bill is published, and during its passage through parliament and no action should be taken without obtaining appropriate professional advice.

Our 2003/04 tax calendar details some of the key dates and deadlines for the forthcoming year.