Your Budget questions

Your Budget questions

Full Budget coverage

The chancellor's seventh Budget contained the usual sprinkling of pre-announced and new measures, while some have called it "boring".

But, will you benefit?

Will your family qualify for the new Child Trust Funds, for example, or will your business be affected by the changes to Capital Gains Tax?

BBC News Online has assembled a panel of experts to help explain the changes, and is inviting readers to submit their questions.

Answers so far:

Q: I have a grandchild 1 year old today, will we be able to use the trust funds for him?
Ralph Elmes, England

A: Unfortunately not. The Chancellor has said Child Trust Funds will apply only to children born since September 2002.

Q: I heard on PM last night that the Chancellor had doubled the tax-free benefit for "office parties", but I couldn't find any reference to this on the Treasury website. Could you enlighten me?
Geoff Leyshon, UK

A: The chancellor said he was intending to increase the tax-free benefit for office parties from £75 to £150 per person. The information was contained in Budget Notes REV BN4, but this does not appear to be available on the Treasury's website.

More cheer for office parties

Q: I am an executor of an estate where the subject died in January this year and the submission for probate is likely to be made in May. Will the new, increased, inheritance tax threshold apply?
Norman Blackburn, England

A: (by Chas Roy-Chowdhury, head of taxation, ACCA). No. It is the threshold at the date of death which applies.

Q: Has the chancellor changed the thresholds for the size of businesses that qualify for 40% capital allowances?
Alan Brinson, United Kingdom

A: (by Chas Roy-Chowdhury, head of taxation, ACCA). The definitions for SME are to be extended. It says in press notice PN06 page 3 that the definitions will be extended once the new maxima are agreed by the EU this summer, but in his speech he said he is increasing it "to the maximum possible under EU law, currently £20 million".

Q: Has the chancellor changed the 40p a mile that ltd companies can claim for the first 10,000 miles of any year?
Steven, England

A: (by Chas Roy-Chowdhury, head of taxation, ACCA). There doesn't seem to be any change in this.

Q: How does the chancellor intend to address the fact that the amount of money put in a Child's Trust Fund is determined at birth even though the circumstances of the parents could change dramatically in the 18 years before the child has access to the funds?
Michael T Farnworth, UK.

A: The government is reviewing whether or not to make additional payments to the Child Trust Fund at key stages during the child's life. This could be an opportunity to do some form of means testing, but we do not know the details yet.

Q: How has the Budget affected first-time buyers?
Aled Jones, Wales,UK

A: (by Ray Boulger of Charcol). The Budget did little, if anything, that will be of much use to first time buyers in the short term. The obvious missed opportunity that could have helped would have been to make Stamp Duty less of a burden by increasing its starting levels, or fairer by avoiding the sharp jump for purchases over £250,000, which is not an uncommon a price for first timer buyers to pay in some areas like London. Better still he should have done both! Stamp Duty has become another stealth tax because despite rapid house price inflation the starting level of £60,000 for most properties hasn't changed for years except on properties worth up to £150,000 in certain "disadvantaged" areas. As some of the designated areas are not immediately recognised as disadvantaged this is certainly worth consideration and more details of which areas qualify, including a post code checker, can be found via the Inland Revenue website.

The Chancellor has acknowledged the volatility of the housing market and has asked research to be undertaken as to how the UK "can develop a market for long term fixes" and a separate report looking onto supply and demand factors. This again is unlikely to be helpful to many first time buyers, as a long term fix would be unsuitable for most unless it had no redemption penalties. The other key driver of housing demand is the lack of supply. There are proposals to look at speeding up the planning process, but I do not see any real action happening anytime soon.

Q: Does the abolition of the "elderly NHS charge" benefit those who are already in hospital and receiving reduced pension? Or will only new hospital admissions benefit from its abolition?
MJJ, UK.

A: (by Sally West, policy officer, Age Concern). The abolition of hospital downrating rules for people in hospital for up to a year will apply to all state pensions and benefits that were previously reduced after six weeks in hospital (including the state pension and income related-benefits such as income support) but not attendance allowances, and Disability Living Allowance and others which are stopped after four weeks. The government will need to ensure that legislation is in place within six weeks so people who go into hospital from today onwards do not get downrated. People already in hospital will still face reductions after six weeks (or may have already had benefits reduced) but the Department for Work and Pensions is looking at legislation allowing restatement of pensions/benefits as long as they have not been in hospital for a year.

Q: Are there any changes to Incapacity Benefits?
William Pearson, England

A: (by Lorna Reith, Chief Executive of Disability Alliance).The long-term rate of Incapacity Benefit went up by £1.20 a week from 6th April but this was part of the annual uprating of benefits and not part of the Chancellor's budget announcement. Unfortunately, there has been some confusion over the Chancellor's statement "One million disabled men and women desperately want jobs. And as a first step for men and women on incapacity benefit who wish to work, there will be an extra £19 a week as we raise the guaranteed minimum income for 35 hours work to £194" which has led some people to believe that Incapacity Benefit was being increased by £19pw. I'm afraid it is not. The Chancellor was talking about the minimum amount someone would be guaranteed to get if they came off Incapacity Benefit and moved into work. The extra £19 pw refers to how much higher the minimum guaranteed income for a disabled person working 35 hours a week is now - compared to April 2002. Previously someone coming off Incapacity Benefit, moving into work and claiming the Disabled Persons Tax Credit was guaranteed an income of £175 pw. From April 2003 someone in the same position would claim the new Working Tax Credit and would be guaranteed an income of £194 a week. I hope this clarifies the position.

Q: I am interested in buying a car that will use LPG (Liquid Petroleum Gas); at present there is a reduced tax on this fuel. Has the chancellor kept the tax on this fuel the same. Has he made any promises about keeping the tax on this fuel the same for another few years or so? Paul Bussey, England

A: (by John Stubbs, head of Technical Policy, the AA). LPG was specifically exempted from any increase - so its fuel duty remains at 9 pence per kilo, that's about 4.5 pence per litre, plus VAT. This level has been promised until 2004.

Q: I notice no mention anywhere about the increase in duty on gas oil,the fuel used by farmers and industry, stealth tax?? D.F.Parker, UK

A: (by John Stubbs, head of Technical Policy, the AA).Gas oil, eg red diesel, goes up by 1.9 pence per litre to 4.22 ppl fuel duty, but this increase is to be held over until the 1st October this year.

The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.