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The Budget
2004
Gordon
Brown’s eighth Budget turned out to be a very technical one with many
measures and proposals outlined. In particular the government revealed its
plans for small company dividends.
Following an
announcement in the December 2003 Pre-Budget Report there had been much
speculation that the government was planning to introduce a national insurance
charge on small company dividends. Thankfully this has not happened. Instead a
minimum 19% corporation tax rate will apply to distributed profits from 1 April
2004. As with many of the provisions announced in the Budget the detail is
decidedly sketchy and we need to wait for the Finance Bill to be able to put
more flesh on the bones.
This summary
focuses on the issues likely to affect you, your family and your business. To
help you decipher what was said we have included comment and suggested action
points throughout the summary.
If you have any
questions then please do not hesitate to contact us for advice or to discuss
any action you may need to take.
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Main budget proposals
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- New pensions regime to be introduced but not until April
2006
- Minimum corporation tax rate of 19% on distributed
profits
- Inland Revenue and
Customs & Excise to merge
- Announcement of
the proposed new regime for company vans
- More detail on the proposed changes for childcare costs
- Confirmation of the tax regime for pre-owned assets
- Marketed tax schemes to be registered with the Inland
Revenue
- Enhanced capital allowances for small businesses
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Previous announcements
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Some of the changes detailed in this summary have been the subject of earlier announcements.
Here is a reminder of some of the more important ones:
- Increases in personal allowances
- Increases in national insurance thresholds
- Increases in rates of tax applicable to trusts
- Increases in small and medium-sized company thresholds
- Improvements to the research and development tax credit
regime
- Changes to the rules on transfer pricing and management
expenses
- Improvements to Venture Capital Trusts and the
Enterprise Investment Scheme
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