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(See the full text of the 2002 Chancellor's speech here!)

Post Budget Overview 2002 - 2003

Growth Predictions

• Britain grew by 2.2% in 2001
• UK growth will be between 2 and 2.5% this year
• Growth rising in 2003 to between 3% and 3.5%
• Growth in 2004 from 2.5% to 3%
• Extra £4bn for public spending next year

Business

• One per cent extra on national insurance contributions (NICs) paid by employers, employees and the self-employed on all earnings above the NICs threshold of £89 a week from April 2003

• New R&D tax credit set at 25% - £400m a year

• Small companies tax cut by 20p to 19p with immediate effect

• A cut in the starting rate of corporation tax from 10 per cent to zero and a cut in the small companies' rate to 19 per cent

• From April Capital Gains Tax to be cut from 20% to 10% for business assets held for one year or more and to 10% for assets held for more than two years

• Plan to extend flat rate VAT to more small firms from next April

• Abolish automatic fines for late VAT payment for small firms (with T/O up to £150,000)

• Automatic relief for VAT on bad debts for small firms

• VAT 'mandatory registration threshold' increased to £55,000. The changes will come into effect on 25 April 2002

• New system to enable 'approved firms' to defer paying VAT on imports until they submit their VAT returns - details to be specified later. (To reduce costs of upfront VAT payments on imported goods before sale to customers).

• Direct cash help (total £40 million in this year, £120 million / year for the next 2 years) to give direct help to small firms going online - encouraging "Universal E-Filing".

• Extra £30m for small firms training needs

• Abolish stamp duty relief for business transactions in poor areas

• Exempt green electricity from climate change levy

• Cut of £55 in licence fee for least polluting vans

• Road tax cut for least polluting cars and motorbikes

• Abolish royalty on North Sea Oil

• Exempting bingo players from tax

• Small breweries duty paid on own beer halved, a cut worth 14p off each pint in time for World Cup

• Close tax avoidance loopholes on stamp duty

• Review tax rules on foreign domiciled individuals

• Extending "step up" scheme for unemployed

• New measures to help long-term unemployed

Tax

• "Higher earners will pay more lower earners will pay less"
• 1p in the pound increase in National Insurance contributions on earnings above £4,615
• Freeze on road tax
• Freeze on fuel duty
• 6p on a packet of cigarettes
• Freeze on beer, spirits and wine duty
• Duty halved for small brewers - equivalent of 14p off a pint in time for this summer's World Cup
• Bingo players exempt from tax

Non-Business

Go somewhere else to find out about this stuff!

Timing of Tax Changes

Employers and pension providers will be asked to put into effect any consequent changes to codes and tax tables on the first pay day after 17 June 2002, backdated to the start of the tax year....more