2005 Budget summary cards by McCabes.
»Introduction
»Personal Income Tax
»Tax Credits
»National Insurance
Contributions
»Employees
»Pensioners
»Savings
»Trusts
»Capital Gains Tax
»Stamp Duty Land Tax
»Inheritance Tax
»Corporation Tax
»Business Tax
»Value Added Tax
»Other Measures
»Tax Tables
»National Insurance
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Personal Income Tax
Tax rates and allowances (Table A)
Personal allowances and higher rate thresholds were increased in line with inflation. The rates of tax for individuals are unchanged. The benefit is in the region of £250 for a higher-rate taxpayer. This benefit is much smaller for a person on a low income, but is likely to represent a larger share of that person's tax bill.
The overall effect is complicated by the different rates which continue to apply for general income, interest and dividends, and the possibility that a separate claim may be made for tax credits to be paid by the Revenue to individuals. The calculation of the tax position remains as complex as ever.
Income split between husband and wife
The last year has seen the Inland Revenue arguing that many businesses which are jointly owned between husband and wife are in fact tax avoidance devices, and the income of a non-working owner should be taxed on the working spouse. A court case was under appeal as the Budget speech was being delivered. The Chancellor might have changed the rules to put the matter beyond doubt, but there were no announcements at this point. If the appeal goes against the Revenue, there could be late amendments to the Finance Bill to reverse the effect of the decision.
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