22 March 2006 Budget Report
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Budget Highlights
Brown hails Britain’s ‘new economic stability’
Chancellor Gordon Brown delivered his tenth consecutive Budget to the House of Commons, amid growing speculation that it could be his last before he embarks on a political leadership campaign.
In a Budget focused largely on education, sport and the environment, the Chancellor presented a picture of economic stability for the UK, reporting that both inflation and economic growth are on target, at 2% and 2 - 2.5% respectively.
The Chancellor announced a number of measures aimed at encouraging innovation and enterprise. These include an extension of R&D tax credits so that companies with 500 employees can claim higher credit, and a major enhancement of the Enterprise Investment Scheme relief. The Chancellor also announced plans to increase employer involvement in education, in a bid to match skills with the needs of businesses.
For the most part tax thresholds are increased in line with inflation. The Chancellor announced a nominal rise in the stamp duty land tax threshold to £125,000, and the inheritance tax threshold will also see a further increase to £325,000 by 2009/10.
One of the more radical announcements related to Vehicle Excise Duty, with the Chancellor revealing that the duty will rise to £210 for the most polluting vehicles, and will be phased out entirely for those producing the lowest emissions.
Other measures announced include the legislation for Real Estate Investment Trusts (REITs), and
training to boost the careers of working women.
Budget Highlights
- Additional first year allowances for small businesses
- Extension of R&D tax credit
- Enhancement of venture capital schemes
Economic forecasts for 2006/07
| Health Spending £96billion |
Growth (Gross Domestic Product) 2-2.5% |
| Government Spending £552billion |
Public Sector Year End Net Debt £493billion |
| Net Borrowing £37billion |
Social Protection Spending £151billion |
| Government Receipts £516billion |
Inflation 2% |
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