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Finance Bill


Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

1

 

A

Bill

[AS AMENDED IN THE COMMITTEE AND IN PUBLIC BILL COMMITTEE]

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%.

 

Bill 124 – I                                                                                            

54/3

 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

2

 

2       

Personal allowances for those aged 65 and over

(1)   

For the tax year 2008-09—

(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

5

(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

“£9,180”.

(2)   

Accordingly—

(a)   

section 57 of ITA 2007, so far as relating to the amounts specified in

10

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

(b)   

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

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

15

(1)   

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

follows.

(2)   

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

(3)   

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

(4)   

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

20

“(a)   

section 7 (starting rate for savings),”.

(5)   

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

(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—

25

(a)   

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

(b)   

the creation of the starting rate for savings.

Corporation tax

4       

Charge and main rates for financial year 2009

(1)   

Corporation tax is charged for the financial year 2009.

30

(2)   

For that year the rate of corporation tax is—

(a)   

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

(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)).

35

5       

Small companies’ rates and fractions for financial year 2008 etc

(1)   

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

(a)   

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

 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

3

 

(b)   

19% on ring fence profits of companies.

(2)   

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

(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

5

fraction”).

(3)   

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

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,

10

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

financial year 2007.

(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

15

6       

Rate etc

(1)   

In TCGA 1992, for section 4 substitute—

“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

20

capital gains tax.

(3)   

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

subsequent tax years.

7       

Entrepreneurs’ relief

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

25

Inheritance tax

8       

Transfer of unused nil-rate band etc

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.

30

Alcohol and tobacco

9       

Rates of alcoholic liquor duty

(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

35

“£14.96”.

 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

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(4)   

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

(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

5

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

“£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—

10

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

             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

  

20

 

Wine or made-wine of a strength exceeding

194.28

 
 

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

  

25

 

8.5 per cent

  
 

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

  

30

 

Wine or made-wine of a strength exceeding

259.02

 
 

15 per cent but not exceeding 22 per cent

  


     Part 2

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

35

 

                                                                           

Rates of duty per litre

 
 

Description of wine or made-wine

of alcohol in the wine

 
  

or made-wine

 
  

£

 
 

Wine or made-wine of a strength exceeding

               21.35”.

 

40

 

22 per cent

  
 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

5

 

(6)   

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

17 March 2008.

10      

Rates of tobacco products duty

(1)   

For the table in Schedule 1 to TPDA 1979 substitute—


5

“Table

 

1.  Cigarettes

An amount equal to 22 per cent of

 
  

the retail price plus £112.07 per

 
  

thousand cigarettes

 
 

2.  Cigars

£163.22 per kilogram

 

10

 

3.  Hand-rolling tobacco

£117.32 per kilogram

 
 

4.  Other smoking tobacco

£71.76 per kilogram”.

 
 

and chewing tobacco

  

(2)   

The amendment made by subsection (1) is treated as having come into force at

6pm on 12 March 2008.

15

Fuel duties

11      

Rates and rebates: simplification

(1)   

HODA 1979 is amended as follows.

(2)   

In section 1 (hydrocarbon oil), omit—

(a)   

subsections (3A) and (3B),

20

(b)   

in subsection (3C), “; and petrol is “leaded petrol” if it is not unleaded

petrol”, and

(c)   

subsections (6) and (7).

(3)   

In section 6 (hydrocarbon oil: rates of duty), for subsection (1A) substitute—

“(1A)   

The rates are—

25

(a)   

£0.5035 a litre in the case of unleaded petrol,

(b)   

£0.6007 a litre in the case of light oil other than unleaded petrol,

and

(c)   

£0.5035 a litre in the case of heavy oil.”

(4)   

In section 6AB(5) (duty on bioblend), omit the words from “of the description”

30

to the end.

(5)   

In section 11(1) (rebate on heavy oil), omit—

(a)   

in paragraph (b), “which is not ultra low sulphur diesel”, and

(b)   

paragraph (ba).

(6)   

In section 13AA(6) (restrictions on use of rebated kerosene), omit “which is not

35

ultra low sulphur diesel or sulphur-free diesel”.

(7)   

Omit section 13A (rebate on unleaded petrol).

 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

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(8)   

In section 20AAA(4)(a) (mixing of rebated oil), for “section 6(1A)(d)” substitute

“section 6A(1A)(c)”.

(9)   

In section 27(1) (interpretation)—

(a)   

in the definition of “rebate”, omit “13A,”,

(b)   

omit the definitions of “sulphur-free diesel”, “sulphur-free petrol”,

5

“ultra low sulphur diesel” and “ultra low sulphur petrol”, and

(c)   

for “and “leaded petrol” have” substitute “has”.

(10)   

In Article 21(7) of the Renewable Transport Fuel Obligations Order 2007

(S.I.2007/3072), for “sulphur-free petrol” substitute “unleaded petrol”.

(11)   

In consequence of this section, omit—

10

(a)   

in FA 1987, section 1(2) and (3),

(b)   

in FA 1997, section 7(5)(a) and (b) and (8)(b),

(c)   

in FA 2000, section 5(3),

(d)   

in FA 2001, section 2(1), and

(e)   

in FA 2004, section 7(2), (5) to (7) and (8)(a).

15

(12)   

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

1 April 2008.

12      

Biodiesel and bioblend

Schedule 5 contains provision about biodiesel and bioblend.

13      

Rates and rebates: increase from 1 October 2008

20

(1)   

HODA 1979 is amended as follows.

(2)   

In section 6(1A) (main rates)—

(a)   

in paragraph (a) (unleaded petrol), for “£0.5035” substitute “£0.5235”,

(b)   

in paragraph (b) (light oil other than unleaded petrol), for “£0.6007”

substitute “£0.6207”, and

25

(c)   

in paragraph (c), (heavy oil), for “£0.5035” substitute “£0.5235”.

(3)   

In section 6AA(3) (rate of duty on biodiesel), for “£0.3035” substitute “£0.3235”.

(4)   

In section 6AD(3) (rate of duty on bioethanol), for “£0.3035” substitute

“£0.3235”.

(5)   

In section 8(3) (road fuel gas)—

30

(a)   

in paragraph (a) (natural road fuel gas), for “£0.1370” substitute

“£0.1660”, and

(b)   

in paragraph (b) (other road fuel gas), for “£0.1649” substitute

“£0.2077”.

(6)   

In section 11(1) (rebate on heavy oil)—

35

(a)   

in paragraph (a) (fuel oil), for “£0.0929” substitute “£0.0966”, and

(b)   

in paragraph (b) (gas oil), for “£0.0969” substitute “£0.1007”.

(7)   

In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.0929”

substitute “£0.0966”.

(8)   

In section 14A(2) (rebate on certain biodiesel), for “£0.0969” substitute

40

“£0.1007”.

 
 

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc

7

 

(9)   

The amendments made by this section come into force on 1 October 2008.

14      

Fuel for aircraft and boats, heating oil and fuel for certain engines

(1)   

In section 6(1A) of HODA 1979 (main rates)—

(a)   

after paragraph (a) insert—

“(aa)   

£0.3103 a litre in the case of aviation gasoline,”, and

5

(b)   

in paragraph (b), after “petrol” insert “or aviation gasoline”.

(2)   

The amendments made by subsection (1) come into force on 1 November 2008.

(3)   

Schedule 6 contains—

(a)   

in Part 1, provision consequential on subsection (1) and provision about

fuel used for private pleasure flying or private pleasure craft, and

10

(b)   

in Part 2, provision about certain heavy oil used for heating or as fuel

for certain engines.

Environmental taxes and duties

15      

Rates of vehicle excise duty

(1)   

Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

15

(2)   

In paragraph 1 (general)—

(a)   

in sub-paragraph (2) (vehicle not covered elsewhere in Schedule

otherwise than with engine cylinder capacity not exceeding 1,549cc),

for “£180” substitute “£185”, and

(b)   

in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with

20

engine cylinder capacity not exceeding 1,549cc), for “£115” substitute

“£120”.

(3)   

In paragraph 1B (graduated rates for light passenger vehicles), for the table

substitute—

“Table

25

 

CO2 emissions figure

Rate

 
 

(1)

(2)

(3)

(4)

 
 

   Exceeding

 Not exceeding

  Reduced rate

 Standard rate

 
 

g/km

g/km

£

£

 
 

           100

          120

            15

             35

 

30

 

           120

          150

           100

           120

 
 

           150

          165

           125

           145

 
 

           165

          185

           150

           170

 
 

           185

          225

           195

           210

 
 
 

 
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