BUDGET 2007 Some of the key points that arose out of the Chancellor's statement are: BUSINESS TAX: SMALL INCORPORATED BUSINESSES With effect from 1st April 2007, the starting rate of corporation tax will be 20% on all taxable profits up to £300,000.The rate will increase again to 21% in 2008 and 22% in 2009. CONSTRUCTION INDUSTRY SCHEME  The Construction Industry Scheme takes effect from 6th April 2007. All those involved in the industry should be aware of the changes and be taking advice. The new system has severe consequences for non compliance. Penalties will be levied for failing to make the required returns. CAPITAL ALLOWANCES The first year allowances for small businesses of 50% continues for another year, With effect from April 2008 a new 100% capital allowance on the first £50,000 for plant and machinery, is being proposed. Exisiting writing down allowances on plant and machinery will be reduced down from the current rate of 25% to 20% effective from April 2008 . EMPLOYEES COMPANY VEHICLES With effect from 6th April 2007 the taxable benefit assessed on an employee who takes a company van home and is allowed non business use of the vehicle will increase from £500 to £3,000, a new charge of £500 for the provision of fuel for private use will also be introduced. PERSONAL INCOME TAX TAX RATES AND ALLOWANCES The tax rate bands were increased in line with inflation, however from April 2008 the Chancellor will make major changes with the abolition of the 10% band, a cut in the basic rate from 22% to 20%, and a significant increase in the upper earnings limit for NIC aligning it with the 40% income tax threshold. This will lead to simplication of tax calculations, although dividends will continue to have their special rates of 10% & 32.5%, the overall effect will mean an increase in the overall tax collected. VALUE ADDED TAX REGISTRATION THRESHOLD From 1 April 2007, the level of taxable turnover at which a business is required to register for VAT will be increased from £61,000 to £64,000. The level at which a business can deregister also increased from £59,000 to £62,000. FUEL SCALE CHARGES The vat charge on a business changes completely from 1st May 2007 onwards. The new charge will depend on CO2 emissions rating of the car, it will be necessary to look up the exact figure in a table, information with regards to this can be obtained on the HM Revenue & Customs website. INHERITANCE TAX The Inheritance Tax threshold is increased from 6 April 2007 to £300,000. The Chancellor has announced that the thresholds will increase over the next 3 years to £312,000, £325,000 and £350,000. If you wish to discuss the impact of any of these changes on your business or personal tax affairs, please contact us on  01908 583800 Or email Christopher Lowe at cdl@camfieldchapmanlowe.co.uk