UK Budget 2005 Business measures Direct taxation The elderly Environmental measures
Indirect taxation Property Savings Transportation measures
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Direct taxation | ||||
| Income tax | ||||
| 1999 New 10p income tax rate to apply to the first £1,500 of taxable income replacing the existing lower rate of 20p The basic rate of income rax cut by 1p to 22p with effect from April 2000  2000 Marginal changes to income tax bands 2001 10p tax band is widened from £1,520 to £1,880 22p tax band is increased by £1,000 to £29,400 a year | 10p tax band raised to £1,920; 22p tax band limit increased to £29,900 -
| 10p tax band raised to £1,960. 22p tax band limit inc to £30,500. -
| Income tax bands & allowances increased in line with inflation. 10p tax band raised to £2,020. 22p tax band limit increased to £31,400. | 10p tax band raised to £2,090 22p tax band increased to £32,400 |
| National insurance contributions | ||||
| 1999 NI contribution brackets raised 2000 NI contribution brackets raised again 2001 NI contribution brackets raised again in 2001 | NI contributions increased by 1 per cent for employers, employees and the self-employed. | New 1% rate introduced for employees and the self-employed above the £595 per week upper limit. All changed from April 2003. | NI contributions bracket increased in line with inflation. Upper earnings limit increased to £610 per week. | NI contributions bracket increased in line with inflation. Upper earnings limit increased to £630 per week
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| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Personal allowance | ||||
| 2001 Basic personal allowance increased by £150 to £4,385. Allowance increased for those over 65 years to between £5,990, and to £6,260 for those over 75 years | Personal tax allowance increased by £80 to £4,615, but frozen at this level for 2003/04. Allowances for those over 65 raised to £6,100, and to £6,370 for those over 75. These allowances will be raised for 2003/04 | PA remains at £4,615. Allowances for those over 65 raised to £6,610 and to £6,770 for those aged over 75. | Personal allowance increased by £130 to £4,745. Allowances for those over 65 raised by £220 to £6,830. Allowances for those over 75 raised by £230 to £6,950. | Personal allowance increased to £4,895
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| Family tax credits | ||||
| 1999 Announcement of a new children's tax credit to be introduced from April 2001 2000 Children's tax credit to come in at £8.50 a week 2001 Children's tax credit increased to £10 a week. An additional £10 a week to be given for the first year of any child born after April 2002. | Tax credits to be recast from April 2003. The Working Tax Credit will help those on low pay; the Child tax credit will help those with children and will normally be paid to the main carer. | Working tax credit and Child tax credit introduced. | Child tax credit increased by £180 to £1,625 per year. Working tax credit increased by £45 to £1,570. Increases in line with inflation. | Child tax credit to rise each year in line with earnings
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| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Child care | ||||
| 1999 New childcare tax credit set at a maximum of £70 for one child and £105 for two as part of the working families tax credit 2001 Childcare tax credit to rise to £135 a week for one child and £200 for two or more children. | No change | Child tax credit replaces Childcare tax credit giving relief on a tapered basis. | No change | No change |
| Child benefit | ||||
| 1999 Increase in benefit to £15 a week for first child and to £10 a week for subsequent children 2000 Child benefit to be £15.50 from April 2001 2001 Increase in child benefit to £15.75 a week for first child and to £10.55 for subsequent children from April 2002 | Increase in child benefit to £16.05 for the first child, and £10.75 for subsequent children from April 2003 | - | Increase in child benefit to £16.50 for the first child, and to £11.05 for subsequent children. Increases are in line with inflation. | Increase in child benefit to £17 for the first child, and to £11.40 for subsequent children. |
| Maternity pay | ||||
| 2001 Maternity pay to be increased in stages from £60 a week, rising to £75 a week in 2002 and then to £100 in 2003. Statutory leave extended from 18 weeks to 26 weeks. Two-week statutory paternity leave to be introduced at £100 per week, to be paid for by the government. | No change | - | No change | - |
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| The elderly | ||||
| Minimum income | ||||
| 1999 Minimum income guarantee of a single pensioner raised to £78 a week, pensioner couples a minimum of over £121 a week 2000 Minimum income guarantee of a single pensioner raised to £82 a week and to £90 a week for those over the age of 80 Pensioner couples a minimum of over £127 a week and to £137 a week for the over-80's 2001 Basic single person's pension to rise by £5 a week to £72.50 in April 2001 and to £75.50 a week in 2002. For couples pensions will rise by £8 a week to £115.90 in April 2001 and £120.70 a week in 2002 | Working families with children will have a guaranteed minimum income of £237 a week. And for the poorest single pensioner, extra help will guarantee a minimum income this year of £98 a week and from next year at least £100 a week. | Pensioners credit introduced from October 2003 including minimum income guarantee of £100 per week (£154 for couples and savings credit). | No change | No change |
| Pensioner tax allowance | ||||
| 1999 Allowance raised for single pensioners to £5,720 and for couples to £15,000 2000 Allowance raised for single pensioners to £5,790 and at £6,050 for those over 75 2001 From 2003 Pensioners' tax allowances to be linked to earnings. | Age-related income tax personal allowances for 2003-04 will increase by more than the rate of inflation. For a pensioner over 65 the first £6,610 of income will be free of tax. For those over 75, the allowance is increased to £6,740. No pensioner aged 65 or over will pay tax on income of less than £127 a week. | No change | Personal allowance for those aged 65 and over increased to £6,830. Personal allowance for those aged 75 and over increased to £6,950. Increases are in line with earnings. | Personal allowance for those aged 65 and over increased to £7,090. Personal allowance for those aged 75 and over increased to £7,220. |
| Winter fuel allowance | ||||
| 1999 Allowance raised from £20 payment to £100 payment 2000 Allowance raised from £100 payment to £150 2001 Winter fuel allowance at £200 for Winter 2000/2001 | Allowance will be paid this year at £200 and in every year of this Parliament. | Additional £100 winter fuel allowance for those aged over 80. | In addition to the winter fuel payments an additional £100 to be paid to all pensioners to compensate for council tax increases. | Council tax rebate increased to £200. Free local bus travel |
| Savings | ||||
| 2000 ISA limit for 2000/01 £7,000 Earnings ceiling for income support raised 2001 Tax free limit for ISA savers to rise to £7,000 a year | No change | No change | No change | ISA exemption extended to 2010 No change to £7,000 tax free limit |
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Indirect taxation | ||||
| Cigarette duty | ||||
| 1999 Duty increase adds 17.5p to price of 20 cigarettes - a rise of 5% above inflation 2000 Duty raised by 25p per packet of 20 from March 21 2000 - the extra revenue ring fenced for the NHS 2001 Duty raised by 6p on a packet of 20 cigarettes | Duty raised by 6p on a packet of 20 cigarettes | Duty raised by 8p on a packet of 20 cigarettes | Duty raised by 8p on a packet of 20 cigarettes | Duty raised by 7p on a packet of 20 cigarettes |
| Alcohol duty | ||||
| 1999 Duty on wine, beer and spirits frozen 2000 Duty raised on wine by 4p per bottle, on beer by 1p per pint and spirit duty frozen 2001 Duty on wine, beer and spirits frozen | Small breweries to see duty on their own beer halved with cuts equal to 14p off each pint. These measures will be introduced before football's World Cup. | Duty raised on wine by 4p per bottle on beer by 1p per pint and spirit duty frozen. | Duty raised on wine by 4p per bottle, on beer by 1p per pint. No increase in duty on cider, spirits or sparkling wine. | Annual inflation rise of 1p on a pint of beer, 4p on a bottle of wine. Duty frozen on spirits, cider and sparkling wine |
| Fuel duty | ||||
| 1999 Rise in duty due to fuel escalator at 6% 2000 Fuel escalator removed. No duty rise beyond the automatic inflation rise of 2p per litre. Ultra-low sulphur petrol - fuel duty set at 1p per litre below other petrol from October 1 2000 2001 Freeze on all road fuel duty and other duties, with a 2p reduction in ultra low sulpher and unleaded petrol. A 3p reduction in low sulpher diesel, both affective from March 7, 2001. Duty on road fuel gases will be frozen until 2004. | Freeze on fuel duty for a second successive year. | 1.28p per litre increase for unleaded petrol, deferred until October 1. | 1.42 per litre increase for sulphur-free fuel, 1.92p per litre increase for low-sulphur fuel, increases deferred until September 1. | Inflation-linked increase deferred until September 1. |
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Transportation measures | ||||
| Vehicle excise duty - cars | ||||
| 1999 VED rate for smaller cars cut by £55 from June 1 1999. Other rates to be increased in line with inflation 2000 New VED rates from March 1 2001 - however rate extended to all cars at 1200cc or below 2001 VED rate for cars under 1549cc reduced by £55 backdated to November 2000. | VED reduced by £25 for the least polluting cars and up to £35 for motorcycles. | Increased by £5 for cars frozen for motorcycles. | VED frozen for cars | Increased by inflation rate for large cars only |
| Vehicle excise duty - lorries | ||||
| 1999 VED rate frozen for 98% of lorries, for lorries and buses with clean engines - fee reduced by up to £1,000 2000 VED for 38 tonne class and 41 tonne class lorries cut by £500; 40 tonne class lorries rate cut by £1,800; all other heavy lorry rates frozen 2001 50% reduction in VED for lorries and VED abolished for tractors. | Proposals announced for a lorry road user charge to replace lorry VED in due course. VED reduced by £55 for the least polluting trucks. | Frozen for lorries. | VED frozen for lorries | - |
| Public transport investment | ||||
| 1998 An investment of at least £500m additional money into public transport, introduction of £50 annual rural transport fund 1999 Increase for rural transport fund of 20% over the next two years bringing funding total to £120m Company car taxation to be recast from 2002 2001 - | No change | - | - | - |
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Environmental measures | ||||
| Landfill charges | ||||
| 2000 Increase of £1 per tonne to £11 per tonne, from April 1 2000 2001 Increase of £1 per tonne to £12 per tonne, from April 1 2001 | Increase of £1 per tonne to £13 per tonne, from April 1 2002 | Increased to £14 per tonne to increase by £1 from April 2004. Then £3 per year thereafter towards medium term rate of £35. The lower rate of tax is £2 per tonne. | Continuation of previous measures | - |
| Climate change levy | ||||
| 1999 Climate levy introduced on business use of energy from April 1 2001. This measure introduced on a neutral revenue basis as employers' national insurance contributions cut from 12.2% to 11.7% 2000 NIC reduction to 11.9% because of climate change levy reliefs 2001 - | Green power stations exempted from levy. | No change | Rates frozen | Rates frozen again |
| Property | ||||
| Stamp duty | ||||
| 1999 Duty increased by half of 1% to 2.5% for properties costing over £250,000 and by half of 1% to 3.5% on properties over £500,000 2000 Duty increased by half of 1% to 3% on properties costing over £250,000 and by half of 1% to 4% on properties over £500,000 2001 - | Stamp duty abolished in certain designated deprived areas for properties up to £150,000. | Exemption increased to £150,000 from December for non-residential property. Abolished on enterprise areas. From December 1, stamp duty restricted to land, shares and interest in partnerships. New lease duty introduced from December 1 subject to consultation. | No change | Starting threshold doubled to £120,000 for residential deals Stamp duty land tax exemption for deprived areas Corporate tax disclosure for stamp land tax |
| 1999 - 2001 | 2002 | 2003 | 2004 | 2005 |
| Business measures | ||||
| Corporation tax | ||||
| 2000 Double tax regime recast from April 2001 Improved R&D allowances for small/medium sized companies 2001 New tax relief promised for intellectual property and goodwill. Various consultations on corporate capital gains on shareholdings | New reliefs introduced for Intellectual Property, Corporate Capital Gains on shareholding and R&D, both further North Sea oil taxation. The starting rate for Corporation Tax (profits under £10,000) cut from 10% to 0 and the main small companies rate (profits under £300,000) to 19% | Some extension of R&D tax credit. Further consultation on reform of corporation tax expected, in the summer. | Minimum tax rate of 19% to apply to profits of companies distributed to non-corporate shareholders. | Rates frozen Detailed anti-avoidance measures impacting intellectual property, cross border transactions and financial products Simplified compliance for small businesses |
| VAT | ||||
| - | Flat rate of VAT for businesses with turnover of up to £100,000 a year, and later for businesses with turnover of up to £150,000. | Flat rate of VAT for business with turnover of up to £150,000 a year. Exemption threshold increased to £56,000 a year. | Exemption threshold increased by £2,000 to £58,000 a year. | Simplified compliance combined with direct tax for small businesses Some anti-avoidance measures |
| Capital gains | ||||
| 2000 Capital gains rates for business assets cut by 5% to 35% after one year. Rates drop to 30% after two years, 20% after three years and 10% after four years 2001 The business assets taper relief has been extended to include part- and full-time employees of non-trading companies, back dated to April 2000. | Further cuts to capital gains tax from April to 20% on business assets held for more than one year and to 10 per cent for business assets held for two years. | Extension in the definition of business assets for capital gains purposes. | No changes | Some targetted anti-avoidance measures |
