The Chancellor's Autumn 2000 Statement

Gordon Brown, the Chancellor of the Exchequer, presented his Autumn Statement on the 8th November, no doubt with the hope that he could appease the recent protests from Hauliers and Farmers over fuel prices, and the Pensioners lobby looking for a more meaningful increase in the basic weekly pensions. Whether his hopes will be fulfilled only time will tell. Some of the main details from his announced proposals are shown below

INCOME TAX PERSONAL ALLOWANCES TO INCREASE FROM APRIL 2001

• Under 65's increase by £150 to £4535
• Between 65 & 74 increase by £200 to £5990
• Aged 75 & over increase by £210 to £6260
• Married Couple's Allowance increase by £180 to £5365 (under 75)
• · Married Couple's Allowance increase by £180 to £5435 (over 75)
• From April 2002 further increases have been announced with the promise to increase allowances for the over 65's by amounts of £240 over and above indexation.

NATIONAL INSURANCE

• From April 2001 employees paying Primary National Insurance will have a much higher upper threshold. This is increased by £40 per week (although the lower-limit is itself increased by £9 per week). The effect is to increase the National Insurance contributions of an Employee earning £30,000 by over £150 a year
• The Self-Employed also suffer from increases in National Insurance Contributions. The Class 4 NIC Upper Profit threshold is increased to £29,900, making the maximum Class 4 Contributions increase from £1640 to £1775 per year.

FROM APRIL 2001

• Lower Earnings Limit (Primary Class 1) £72 per week
• Upper Earnings Limit (Primary Class 1) £575 per week
• Primary threshold £87 per week · Secondary threshold £87 per week
• Employees primary Class 1 Rate 10% of £87.01 to £575 per week
• Employers secondary Class 1 Rate 11.9% on earnings over £87 per week
• Class 4 NIC rate 7% · Class 4 NIC Lower Profit Limit £4535 p.a
• Class 4 NIC Upper Profit Limit £29,900 p.a.

STATE RETIREMENT PENSIONS

These will increase from April 2001 by

• Single pensioners £5 per week to £ 72.50 (to be increased by a further £3 per week from April 2002)
• Couples ---------- £8 per week to £115.90 (to be increased by a further £4.80 per week from April 2002)
• Winter Fuel Allowances to increase to £200
• The savings threshold, before Benefits are affected, has also been raised from £3000 to £6000 with the upper ceilings increasing from £8000 to £12000. Half a million pensioners are said to benefit from these increases.

TRANSPORT & VEHICLE EXCISE DUTY (VED)

• Road Fund Tax is to be cut by £55 for cars up to 1500c.c. Although this takes immediate effect it will be introduced in the March Budget but. backdated, with the benefits coming by way of rebates to be posted to drivers next March
• A freeze on the expected increases in fuel duties from March 2001 to last until April 2002 (and possibly beyond)
• Further reductions from 2001 in duties on ultra low sulphur fuels.
• Changes in the Excise Duties for heavy vehicles with potential savings of up to £2000
• Abolition of VED for tractors & agricultural vehicles.

V.A.T. FOR SMALL/ MEDIUM ENTERPRISES

• The Cash Accounting Scheme, said to extend the benefit to a further 40000 traders, has been amended to allow for the qualifying annual turnover to be £600,000 (up from £350,000).
• The Annual Accounting Scheme, which allows businesses to file VAT returns annually rather than quarterly, has also been amended to allow a new turnover limit of £600,000. This measure is said to benefit 100,000 traders.

Both of the above measures are to take effect from April 2000.

• Individual Savings Accounts have been particularly popular with savers, allowing up to £7000 to be saved via Cash, Equities & Unit Trusts and Insurance Policies. Particularly popular has been the £3000 per annum cash "allowance". Savers enjoy the interest from such ISA savings accounts tax-free. That figure was to be reduced to £1000. The Chancellor has now extended the period for savings at this level by a further 5 years.
• A couple can now, under the changed regime, have up to £14,000 per annum invested within ISA's This equates to a potential maximum of £70,000 invested over the next 5 years, the income from which can be tax free.