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Budget2000 Tuesday, 21 March, 2000, 20:10 GMT
No change in personal taxes
income tax graph
Little was said about personal taxes in this year's Budget, but then there are enough changes already in the pipeline for the taxpayer to cope with.

Chancellor Gordon Brown announced that most tax allowances would be raised in line with inflation, including the individual personal allowance.

There were similar inflation-linked increases in elderly persons' allowances.

Accountants PricewaterhouseCoopers have calculated that the majority of people are likely to be gainers from the Budget.

From a single parent earning 5,000 from a part time job to a middle-income married couple with two school age children, all of PricewaterhouseCoopers' six imaginary households are winners in the Budget, albeit at a fairly modest level.

CGT indexation

The annual limit for exemption from Capital Gains Tax will rise from 7,100 to 7,200, also in line with indexation.

Mr Parry-Wingfield said: "The chancellor has done nothing about reducing the complications of Capital Gains Tax. It's very difficult for individuals to work out under self-assessment."

Mr Brown also said the maximum amount which could be invested in Individual Savings Accounts (ISAs) will be held at 7,000 for next year, instead of dropping down to 5,000 as previously indicated.

Mr Parry-Winfgfield said the Chancellor had failed to sort out the muddle over the distinction between Maxi and Mini ISAs.

The dog which did not bark, he said, was Inheritance Tax, where accountants had feared there would be a crackdown.

In fact no crackdown was announced.

Instead, all the chancellor did was increase the current threshold where Inheritance Tax starts to bite from 231,000 to 234,000.

Nor did he do anything to insurance premium tax which is levied on motoring, travel and other general insurance premiums.

In the pipeline

Although there were few announcements about personal taxation this time, there are already a variety of changes due to come into effect this year which were announced in previous Budgets.

These include:

  • A cut in the basic rate of income tax from 23% to 22%.

  • The abolition of tax relief on mortgage interest payments.

  • The abolition of the married couples allowance (except for over 65s).

  • An increase in national insurance contributions for employees and the self-employed.

  • The 10p starting rate of income tax is to be extended to non-dividend savings income and capital gains.

See also:

20 Mar 00 | Budget2000
20 Oct 99 | Business
17 Feb 00 | Business
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