Website of the UK government

Personal taxation

A number of changes announced in last year’s Budget will come into effect from 6 April 2008 (the 2008/9 tax year):

• the basic rate of Income Tax falls from 22 per cent to 20 per cent
• the 10 per cent starting rate of Income Tax is abolished
• the personal allowance increases to £5,435; the age-related personal allowances rise to £9,030 for people aged between 65 and 74, and to £9,180 for those aged 75 and over
  

• Income Tax and National Insurance rates for 2008/09

Child Benefit, Guardian's Allowance and Tax Credits

Child Benefit for the eldest or an only child goes up 70 pence to £18.80 for 2008/09. For other children, the amount rises 45 pence to £12.55. Guardian's Allowance increases 50 pence to £13.45. The 'first child' rate increases to £20 a week from April 2009. Also:

• the child element of Child Tax Credit increases by £150 a year
• the threshold for Working Tax Credit increases by £1,200 to £6,420

• Tax credit and Child Benefit rates 2008/09

Pensioners

The Budget announced an increase of £100 to over-80s households and £50 to over-60s households in 2008/09, via their Winter Fuel Payment.

• Winter Fuel Payment (over 50s section)

Savings

The overall annual investment limit for ISAs rises to £7,200, of which £3,600 can be in cash, from 6 April 2008.

The ten pence starting rate of tax is removed for non savings income and replaced with a new ten pence starting rate for savings income with a rate limit of £2,320.

• Saving and investing with ISAs (money, tax and benefits section)

Alcohol and tobacco

Alcohol duty rates increase from 17 March 2008. The duty increases will add four pence to the price of a typical pint of beer, 14 pence to the price of a typical bottle of wine, and 55 pence to the price of a typical bottle of spirits.

Duty on tobacco rises in line with inflation - 11 pence on a packet of twenty cigarettes.

Full details are given in the link below.

• Budget 2008 - alcohol and tobacco

Motoring and transport

The two pence per litre increase in fuel duty previously announced by the Chancellor has been delayed until 1 October 2008.

Vehicle Excise Duty (VED, or 'car tax') for the most polluting vehicles increases by £100 to £400 (for petrol and diesel cars in the graduated VED band G. Other bands see increases of £5).

There's more on motoring taxes in the article linked below.

• Budget 2008 - motoring taxes

The environment

From 2009, alongside the Budget there will be a five year carbon budget setting carbon emissions; and the long-term target for emissions reductions has been increased to 80 per cent by 2050. 

Specific proposals include the introduction of legislation in 2009 to impose a charge on single-use carrier bags - the money raised would go to environmental charities.

The Stamp Duty Land Tax exemption for zero carbon homes is extended retrospectively to new flats from 1 October 2007.

There's more information on Budget measures for the environment in the article linked below.

• Budget 2008 - protecting the environment

Inheritance Tax and Capital Gains Tax

Previous Budgets announced Inheritance Tax allowances - for 2008/09, the allowance is £312,000 for individuals and £624,000 for married couples and civil partners.

The Capital Gains Tax annual exempt amount is increased to £9,600 for 2008/09 for individuals, personal representatives of deceased persons and trustees of certain settlements for the disabled.

Use the links below for further information. 

• Inheritance Tax (money, tax and benefits section)
• Capital Gains Tax (money, tax and benefits section)

Charities and Gift Aid

The Budget announced a package of measures aimed at increasing the take-up of Gift Aid, including the introduction of a transitional rate of 22 per cent in 2008/09.

Measures were also taken to reduce burdens on charities, including reforms to the audit process and a programme for bringing more smaller charities into Gift Aid.

• Gift Aid (money, tax and benefits section)