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Finance Bill


Finance Bill
Part 1 — Charges, rates, allowances, reliefs etc

1

 

A

Bill

To

Grant certain duties, to alter other duties, and to amend the law relating to the

National Debt and the Public Revenue, and to make further provision in

connection with finance. 

Most Gracious Sovereign

WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the

United Kingdom in Parliament assembled, towards raising the necessary

supplies to defray Your Majesty’s public expenses, and making an addition to the

public revenue, have freely and voluntarily resolved to give and to grant unto Your

Majesty the several duties hereinafter mentioned; and do therefore most humbly

beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most

Excellent Majesty, by and with the advice and consent of the Lords Spiritual and

Temporal, and Commons, in this present Parliament assembled, and by the authority

of the same, as follows:—

Part 1

Charges, rates, allowances, reliefs etc

Income tax

1       

Charge and main rates for 2008-09

(1)   

Income tax is charged for the tax year 2008-09.

5

(2)   

For that tax year—

(a)   

the basic rate is 20%, and

(b)   

the higher rate is 40%.

2       

Personal allowances for those aged 65 and over

(1)   

For the tax year 2008-09—

10

 

Bill 89                                                                                                 

54/3

 
 

Finance Bill
Part 1 — Charges, rates, allowances, reliefs etc

2

 

(a)   

the amount specified in section 36(1) of ITA 2007 and section 257(2) of

ICTA (personal allowance for those aged 65 to 74) is replaced with

“£9,030”, and

(b)   

the amount specified in section 37(1) of ITA 2007 and section 257(3) of

ICTA (personal allowance for those aged 75 and over) is replaced with

5

“£9,180”.

(2)   

Accordingly—

(a)   

section 57 of ITA 2007 (indexation), so far as relating to the amounts

specified in sections 36(1) and 37(1) of that Act, and

(b)   

section 257C of ICTA, so far as relating to the amounts specified in

10

section 257(2) and (3) of that Act,

   

(indexation) do not apply for the tax year 2008-09.

3       

Abolition of starting and savings rates and creation of starting rate for savings

(1)   

Section 6 of ITA 2007 (rates at which income tax is charged) is amended as

follows.

15

(2)   

In subsection (1), omit paragraph (a).

(3)   

In subsection (2), omit “starting rate,”.

(4)   

In subsection (3), for paragraph (a) substitute—

“(a)   

section 7 (starting rate for savings),”.

(5)   

Accordingly, in the heading omit “starting rate,”.

20

(6)   

The amendments made by this section have effect for the tax year 2008-09 and

subsequent tax years.

(7)   

Schedule 1 contains provision in connection with—

(a)   

the abolition of the starting rate and the savings rate, and

(b)   

the creation of the starting rate for savings.

25

Corporation tax

4       

Charge and main rates for financial year 2009

(1)   

Corporation tax is charged for the financial year 2009.

(2)   

For that year the rate of corporation tax is—

(a)   

28% on profits of companies other than ring fence profits, and

30

(b)   

30% on ring fence profits of companies.

(3)   

In subsection (2) “ring fence profits” has the same meaning as in Chapter 5 of

Part 12 of ICTA (see section 502(1) and (1A)).

5       

Small companies’ rates and fractions for financial year 2008 etc

(1)   

For the financial year 2008 the small companies’ rate is—

35

(a)   

21% on profits of companies other than ring fence profits, and

(b)   

19% on ring fence profits of companies.

(2)   

For the financial year 2008 the fraction mentioned in section 13(2) of ICTA is—

 
 

Finance Bill
Part 1 — Charges, rates, allowances, reliefs etc

3

 

(a)   

7/400ths in relation to profits of companies other than ring fence profits

(“the standard fraction”), and

(b)   

11/400ths in relation to ring fence profits of companies (“the ring fence

fraction”).

(3)   

Subsections (3) to (7) of section 3 of FA 2007 (operation of section 13(2) of ICTA

5

in relation to company profits consisting of both ring fence profits and other

profits) apply in relation to profits of a company for an accounting period any

part of which falls in the financial year 2008, or any subsequent financial year,

as in relation to those for an accounting period any part of which falls in the

financial year 2007.

10

(4)   

In this section “ring fence profits” has the same meaning as in Chapter 5 of Part

12 of ICTA (see section 502(1) and (1A)).

Capital gains tax

6       

Rate etc

(1)   

In TCGA 1992, for section 4 substitute—

15

“4      

Rate of capital gains tax

The rate of capital gains tax is 18%.”

(2)   

Schedule 2 contains further provision for and in connection with the reform of

capital gains tax.

(3)   

The amendment made by subsection (1) has effect for the tax year 2008-09 and

20

subsequent tax years.

7       

Entrepreneurs’ relief

Schedule 3 contains provision for and in connection with entrepreneurs’ relief.

Inheritance tax

8       

Transfer of unused nil-rate band etc

25

Schedule 4 contains provisions about the transfer of unused nil-rate band

between spouses and civil partners for the purposes of the charge to

inheritance tax etc.

Alcohol and tobacco

9       

Rates of alcoholic liquor duty

30

(1)   

ALDA 1979 is amended as follows.

(2)   

In section 5 (rate of duty on spirits), for “£19.56” substitute “£21.35”.

(3)   

In section 36(1AA)(a) (standard rate of duty on beer), for “£13.71” substitute

“£14.96”.

(4)   

In section 62(1A) (rates of duty on cider)—

35

 
 

Finance Bill
Part 1 — Charges, rates, allowances, reliefs etc

4

 

(a)   

in paragraph (a) (rate of duty per hectolitre in the case of sparkling

cider of a strength exceeding 5.5 per cent), for “£172.33” substitute

“£188.10”,

(b)   

in paragraph (b) (rate of duty per hectolitre in the case of cider of a

strength exceeding 7.5 per cent which is not sparkling cider), for

5

“£39.73” substitute “£43.37”, and

(c)   

in paragraph (c) (rate of duty per hectolitre in any other case), for

“£26.48” substitute “£28.90”.

(5)   

For the table in Schedule 1 substitute—

                  “Table of rates of duty on wine and made-wine

10

             Part 1

                     Wine or made-wine of a strength not exceeding 22 per cent

 

                                                                           

Rates of duty per

 
 

Description of wine or made-wine

hectolitre

 
  

£

 

15

 

Wine or made-wine of a strength not

59.87

 
 

exceeding 4 per cent

  
 

Wine or made-wine of a strength exceeding

82.32

 
 

4 per cent but not exceeding 5.5 per cent

  
 

Wine or made-wine of a strength exceeding

194.28

 

20

 

5.5 per cent but not exceeding 15 per cent

  
 

and not being sparkling

  
 

Sparkling wine or sparkling made-wine of a

188.10

 
 

strength exceeding 5.5 per cent but less than

  
 

8.5 per cent

  

25

 

Sparkling wine or sparkling made-wine of a

248.85

 
 

strength of 8.5 per cent or of a strength

  
 

exceeding 8.5 per cent but not exceeding 15

  
 

per cent

  
 

Wine or made-wine of a strength exceeding

259.02

 

30

 

15 per cent but not exceeding 22 per cent

  


     Part 2

                          Wine or made-wine of a strength exceeding 22 per cent

 

                                                                           

Rates of duty per litre

 

35

 

Description of wine or made-wine

of alcohol in the wine

 
  

or made-wine

 
  

£

 
 

Wine or made-wine of a strength exceeding

               21.35”.

 
 

22 per cent

  

40

(6)   

The amendments made by this section are treated as having come into force on

17 March 2008.

 
 

 
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