|
2002 Budget Comment
Once
again, the main question arising from this Budget is: how
does the Press manage to write so many column inches?
Apart from the dramatic increase to
National Insurance, once you clear away the spending bits,
the political bits, the measures coming in over a year from
now and the technical changes to existing legislation, there
is little to comment on.
Instead we set out:
Rates and Allowances
for 2002 and 2003
Rates and allowances
for income tax, corporation tax, capital gains tax, inheritance
tax and the pension schemes earnings cap are set out below.
|
|
2000-02 (£)
|
2001-03 (£)
|
Increase (£)
|
|
Income tax allowances
|
|
|
|
|
Personal allowance
Personal allowance for people aged 65-74
Personal allowance for people aged 75 and over
|
4,535
5,990
6,260
|
4,615
6,100
6,370
|
80
110
110
|
|
Income limit for age-related
allowances
|
17,600
|
17,900
|
300
|
|
Married couple’s
allowance for people born before 6 April 1935
Married couple’s allowance –aged 75 or more
Minimum amount of married couple’s allowance
|
5,365
5,435
2,070
|
5,465
5,535
2,110
|
100
100
40
|
|
Children’s tax credit
|
5,200
|
5,290
|
90
|
|
Capital gains tax annual
exempt amount:
Individuals etc
Other
trustees
|
7,500
3,750
|
7,700
3,850
|
200
100
|
|
Inheritance tax threshold
|
242,000
|
250,000
|
8,000
|
|
Pension schemes earnings
cap
|
95,400
|
97,200
|
1,800
|
|
Taxable bands 2001-02 (£)
|
Taxable bands 2002-03 (£)
|
|
Starting rate 10%
|
0 –
1,880
|
Starting rate 10%
|
0 –
1,920
|
|
Basic rate 22%
|
1,881 –
29,400
|
Basic rate 22%
|
1,921 –
29,900
|
|
Higher rate 40%
|
Over 29,400
|
Higher rate 40%
|
Over 29,900
|
|
Corporation tax profits
2000-01 and 2001-02 (no change) (£)
|
|
Starting rate Zero %
|
0 –
10,000
|
|
Marginal relief
|
10,001 – 50,000
|
|
Small companies’
rate 19%
|
50,001 – 300,000
|
|
Marginal relief
|
300,001 – 1,500,000
|
|
Main rate 30%
|
1,500,001or more
|
The
main rate of corporation tax for 2003-04 is unchanged at 30
per cent.
National Insurance changes from 6
April 2002
|
|
2001/2002
|
2002/2003
|
|
Class 1 Employees
|
|
On first
|
£87 pw
|
Nil
|
£89 pw
|
Nil
|
|
Between
|
£87 - £575
pw
|
10%
|
£89 - £585
pw
|
10%
|
|
Over
|
£575 pw
|
Nil
|
£585 pw
|
Nil
|
|
Class 1 Employers
|
|
On first
|
£87 pw
|
Nil
|
£87 pw
|
Nil
|
|
Between
|
£87 - £575
pw
|
12.2%
|
£87 - £585
pw
|
11.8%
|
|
Over
|
£575 pw
|
12.2%
|
£585 pw
|
11.8%
|
|
Class 2 Self employed
|
|
Flat rate
|
|
£2 pw
|
|
£2 pw
|
|
Class 3 Voluntary
|
|
Flat rate
|
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£6.75 pw
|
|
£6.85 pw
|
|
|
|
|
|
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Class 4 Self
employed
|
|
On profits between
|
£4,535 - £29,900
pa
|
7%
|
£4,615 - £30,420
pa
|
7%
|
|
(maximum annual contribution)
|
£1,776
|
|
£1,806
|
National Insurance Rates 2003-04
For the year 2003/04 there will be an
additional 1% contribution on all earnings above the threshold
of £89 per week. This
1% applies to employees, employers and the self-employed.
This is in addition
to existing rates of contribution below the upper earnings
limit for employees and the upper profits limit for the self-employed.
This means that the starting point for both employers’ and employees’
NICs in 2003-04 will be £89 per week and no employee will
pay NICs on earnings below this amount. Rates
and thresholds are set out below.
|
|
2002-03
|
2003-04
|
|
Primary
threshold
|
£89
per week
|
£89
per week
|
| Secondary
threshold |
£89
per week
|
£89
per week
|
|
Employees’
primary class 1 rate on earnings between primary threshold
and upper earnings limit
|
10%
|
11%
|
|
Employees’
primary class 1 rate on earnings above upper earnings
limit
|
|
1%
|
|
Employers’
secondary class 1 rate on earnings above secondary threshold
|
11.8%
|
12.8%
|
|
Lower
profits limit (for self-employed Class 4 contribution)
|
£4,615
|
£4,615
|
| Class
4 rate on profits between lower and upper profits limit |
7%
|
8%
|
| Class
4 rate on profits above upper profits limit |
-
|
1%
|
|
