Budget 2005 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

Employees Company cars and fuel (Table C) The taxable benefit on most company cars will increase again for 2005/06, because the level of CO2 emissions at which the minimum 15% charge starts to increase drops to 140g/km from 145g/km. This means that the charge for most cars will increase by 1% of the original list price - unless they were already on the maximum (35%), or are still below the minimum. The figure will now not change for the next three years - it is confirmed at 140g/km to the end of 2007/08. The same increase will apply to the benefit of free fuel for use in a company car, because that is based on the same percentage applied to a fixed figure of £14,400 (which has not changed since it was introduced in 2003). 3% is added to the CO2-based figure for diesel cars. Some low-emission diesels have been exempted from this addition, but the exemption is removed for cars registered from 1 January 2006 onwards. Company vans Last year it was announced that the £500 flat rate taxable benefit on the provision of a company van would be removed from 6 April 2005 if the only private use of the van is for travel between home and work. If there is more private use than that, the charge remains (and will increase to a figure of £3,000 on 6 April 2007). Tax Trap If you use a van privately for more than commuting, you will pay tax on it Childcare For some years, the provision of childcare by an employer through a 'workplace nursery' has been a tax-exempt benefit in kind. Provision by other means has generally been taxable, although vouchers have been free of NIC. From April 2005, a new £50pw exemption will apply to a wider range of 'employer-contracted' childcare, and existing 'workplace nurseries' will remain exempt. Although in many cases this is an attractive new exemption, it will not always reduce the tax charge. Vouchers of over £50pw will gain by a tax exemption on £50, but lose by a NIC charge on the excess over £50. Bicycles and computers There are special tax exemptions for loans of bicycles and loans of computers by employers to employees. New rules are introduced from 6 April 2005 to reduce a possible tax charge when a loaned bicycle or computer is sold to the employee at the end of the loan. If the market value of the asset at the time of sale is paid by the employee, no tax charge will arise. Other exemptions New exemptions were introduced, with effect from 6 April 2005, for outplacement counselling and retraining of redundant part-time employees and for compensation payments to members of the Armed Forces. The tax advantages of payments by employers to employees who are on full-time study courses will also be enhanced from the beginning of the next academic year, 1 September 2005. Research institution spinout companies Significant tax charges could arise on academics who are given shares in companies set up by their research institution to exploit the commercial potential of intellectual property they have developed. A new relief will be introduced to reduce and defer such tax charges.