9 March 1999 Budget
Income tax allowances and relief
| 1999/2000 | 1998/1999 | |
|---|---|---|
| £ | £ | |
| Personal allowance | 4,335 | 4,195 |
| Personal allowance (age 65-74) | 5,720 | 5,410 |
| Personal allowance (age 75 and over) | 5,980 | 5,600 |
| Additional allowance for single parent families etc* | 1,970 | 1,900 |
| Widow's bereavement allowance, and maintenance* | 1,970 | 1,900 |
| Married couple's allowance* | 1,970 | 1,900 |
| Married couple's allowance (age 65-74)* | 5,125 | 3,305 |
| Married couple's allowance (age 75 and over)* | 5195 | 3,345 |
| *Relief restricted to | 10% | 15% |
| Age allowance income limit | ||
| Extra allowance reduced by £1 for every £2 of income over | 16,800 | 16,200 |
| Blind person's allowance | 1,380 | 1,330 |
| Mortgage relief on interest on home loans up to | 30,000 | 30,000 |
| Mortgage interest relief at | 10% | 10% |
| Golden handshake exemption | 30,000 | 30,000 |
| Rent-a-room tax-free income | 4,250 | 4,250 |
| Pensions earnings cap | 90,600 | 87,600 |
| 1999/2000* | £ | 1998/1999 | £ | |
|---|---|---|---|---|
| Starting rate 10% | 0-1,500 | Lower Rate 20% | 0-4,300 | |
| Basic rate 23% | 1,501-28,000 | Basic Rate 23% | 4,301-27,100 | |
| Higher rate 40% | over 28,000 | Higher Rate 40% | over 27,100 | |
| Certain trusts (e.g. discretionary) dividends | 25% | Certain trusts (e.g. discretionary) dividends | 34% | |
| Other Income | 34% | Other Income | 34% | |
| *For 1999/2000, the rates of tax applicable to savings income, other than dividends, remain at 20% for income below the higher rate threshold and at 40% above that. The rates applicable to dividends will be 10% for income below the higher rate tax threshold and 32.5% above that. | ||||
From 6 April 2000, the following allowances will be abolished: the married couple's allowance (MCA) for people aged under 65, the additional personal allowance, the widows bereavement allowance and certain reliefs for maintenance payments. Where one of the spouses is aged at least 65 on 5 April 2000, couples will keep the MCA. A spouse who reaches the age of 65 after that date will not be able to make a new claim for the MCA. However when a person who was born before 6 April 1935 newly marries, he or she will be able to claim the MCA.
From 6 April 2001, a new children's tax credit will be introduced in the form of an allowance of £4,160 on which relief of 10% will be given. The allowance will be given where a family has one or more children under the age of 16 living with them. The credit will be gradually withdrawn where the person who claims it is a higher rate taxpayer.
The basic rate of income tax in 2000/01 will be 22%.
Mortgage interest relief for home purchase (MIRAS) will be withdrawn from 6 April 2000.
Interest on existing loans used to purchase annuities under home income plans will continue to receive basic rate relief. No relief will be available for new loans on or after 9 March 1999, unless the lender had agreed to the loan in writing before that date.
Individual Learning Accounts and Vocational Training Relief
Contributions by employers to individual learning accounts (ILAs) held by employees will qualify for a deduction from profits and be free of income tax and NICs. Vocational training relief will be abolished from 2000/01 and higher rate relief will no longer be available for payments made after 5 April 1999.
From 6 April 2002, the existing income tax charge based on a car's price, business mileage and age will be abolished. It will be replaced by a charge on a percentage of the car's price, graduated according to the level of the car's carbon dioxide emissions.
For 1999/2000, 2000/01 and 2001/02, the basic tax charge on cars will be as follows:
| 1999/2002 | 1998/1999 | |||||||
| Business Miles pa | % list price | Max | % list price | Max | ||||
|---|---|---|---|---|---|---|---|---|
| Below 2,500 or 2nd car | 35 | 28,000 | 35 | 28,000 | ||||
| 2,500 - 17,999 | 25 | 20,000 | 231/3 | 18,667 | ||||
| 18,000 and over | 15 | 12,000 | 11 2/3 | 9,333 | ||||
The fuel scale benefits for 1999/2000 are as follows:
| 1999/2002 | 1998/1999 | ||||||||
| Cylinder Capacity | Petrol | Diesel | Petrol | Diesel | |||||
|---|---|---|---|---|---|---|---|---|---|
| £ | £ | £ | £ | ||||||
| Up to 1,400 cc | 1,210 | 1,540 | 1,010 | 1,280 | |||||
| 1,401 - 2,000 cc | 1,540 | 1,540 | 1,280 | 1,280 | |||||
| over 2,000 cc | 2,270 | 2,270 | 1,890 | 1,890 | |||||
From 6 April 1999, the employee benefits tax charge on works buses, subsidies to public bus services, birycles, cycling safety equipment and cycle parking will be abolished. Employees using bicycles for business travel will be able to claim capital allowances. An employer will also be able to pay a tax-free mileage allowance of 12p to cyclists.
Computers and mobile telephones
The tax charge will be removed from 6 April 1999 on the loan of a computer worth up to £2,000 by an employer to an employee. The tax charge of £200 on the provision of mobile telephones for employees will be abolished from 6 April 1999.
The Inland Revenue has issued a technical note proposing a new share scheme which will allow employees to buy shares from their pre-tax salary and to receive free shares, with further incentives for long-term shareholding. The new scheme will be introduced in next year's Budget.
All income from assets held in a bare trust set up on or after 9 March 1999 by parents for their minor unmarried children will be taxable on the parent. The parental tax charge will also apply to the income of funds added on or after 9 March to trusts in existence before that date.
From April 2000, child benefit will be increased to f15 per week for the first child and f10 per week for subsequent children. Child benefit will continue to be tax-free.