Part 1Charges, rates, allowances, reliefs etc

Income tax

1Charge and main rates for 2008-09

1

Income tax is charged for the tax year 2008-09.

2

For that tax year—

a

the basic rate is 20%, and

b

the higher rate is 40%.

2Personal allowance for those aged under 65

1

For the tax year 2008-09 the amount specified in—

a

section 35 of ITA 2007, F1...

F1b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(personal allowance for those aged under 65) is replaced with “ £6,035 ”.

2

Accordingly—

a

section 57 of ITA 2007, so far as relating to the amount specified in section 35 of that Act, F2...

F2b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(indexation) do not apply for the tax year 2008-09.

3

This section does not require a change to be made in the amounts deductible or repayable under PAYE regulations before 7 September 2008.

3Personal allowances for those aged 65 and over

1

For the tax year 2008-09—

a

the amount specified in section 36(1) of ITA 2007 F3... (personal allowance for those aged 65 to 74) is replaced with “ £9,030 ”, and

b

the amount specified in section 37(1) of ITA 2007 F3... (personal allowance for those aged 75 and over) is replaced with “ £9,180 ”.

2

Accordingly—

a

section 57 of ITA 2007, so far as relating to the amounts specified in sections 36(1) and 37(1) of that Act, F4...

F4b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(indexation) do not apply for the tax year 2008-09.

4Basic rate limit

1

In section 10 of ITA 2007 (income charged at main rates: individuals), for subsection (5) substitute—

5

The basic rate limit is £34,800.

2

The amendment made by subsection (1) has effect for the tax year 2008-09 and subsequent tax years.

3

But until 7 September 2008 for the purpose of ascertaining the amounts deductible or repayable under PAYE regulations it may be assumed that the figure specified in section 10(5) of ITA 2007 for the tax year 2008-09 is £36,000.

5Abolition of starting and savings rates and creation of starting rate for savings

1

Section 6 of ITA 2007 (rates at which income tax is charged) is amended as follows.

2

In subsection (1), omit paragraph (a).

3

In subsection (2), omit “starting rate,”.

4

In subsection (3), for paragraph (a) substitute—

a

section 7 (starting rate for savings),

5

Accordingly, in the heading omit “starting rate,”.

6

The amendments made by this section have effect for the tax year 2008-09 and subsequent tax years.

7

Schedule 1 contains provision in connection with—

a

the abolition of the starting rate and the savings rate, and

b

the creation of the starting rate for savings.

Corporation tax

6Charge and main rates for financial year 2009

1

Corporation tax is charged for the financial year 2009.

2

For that year the rate of corporation tax is—

a

28% on profits of companies other than ring fence profits, and

b

30% on ring fence profits of companies.

3

In subsection (2) “ring fence profits” has the F5meaning given by section 276 of CTA 2010.

F67Small companies' rates and fractions for financial year 2008 etc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital gains tax

8Rate etc

1

In TCGA 1992, for section 4 substitute—

4Rate of capital gains tax

The rate of capital gains tax is 18%.

2

Schedule 2 contains further provision for and in connection with the reform of capital gains tax.

3

The amendment made by subsection (1) has effect for the tax year 2008-09 and subsequent tax years.

9Entrepreneurs' relief

Schedule 3 contains provision for and in connection with entrepreneurs' relief.

Inheritance tax

10Transfer of unused nil-rate band etc

Schedule 4 contains provisions about the transfer of unused nil-rate band between spouses and civil partners for the purposes of the charge to inheritance tax etc.

Alcohol and tobacco

11Rates of alcoholic liquor duty

1

ALDA 1979 is amended as follows.

2

In section 5 (rate of duty on spirits), for “£19.56” substitute “ £21.35 ”.

3

In section 36(1AA)(a) (standard rate of duty on beer), for “£13.71” substitute “ £14.96 ”.

4

In section 62(1A) (rates of duty on cider)—

a

in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£172.33” substitute “ £188.10 ”,

b

in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£39.73” substitute “ £43.37 ”, and

c

in paragraph (c) (rate of duty per hectolitre in any other case), for “£26.48” substitute “ £28.90 ”.

5

For the table in Schedule 1 substitute—

Table of rates of duty on wine and made-wine

Part 1Wine or made-wine of a strength not exceeding 22 per cent

Description of wine or made-wine

Rates of duty per hectolitre

£

Wine or made-wine of a strength not exceeding 4 per cent

59.87

Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent

82.32

Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not being sparkling

194.28

Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent

188.10

Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent

248.85

Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent

259.02

Part 2Wine or made-wine of a strength exceeding 22 per cent

Description of wine or made-wine

Rates of duty per litre of alcohol in the wine or made-wine

£

Wine or made-wine of a strength exceeding 22 per cent

21.35

6

The amendments made by this section are treated as having come into force on 17 March 2008.

12Rates of tobacco products duty

1

For the table in Schedule 1 to TPDA 1979 substitute—

Table

1. Cigarettes

An amount equal to 22 per cent of the retail price plus £112.07 per thousand cigarettes

2. Cigars

£163.22 per kilogram

3. Hand-rolling tobacco

£117.32 per kilogram

4. Other smoking tobacco and chewing tobacco

£71.76 per kilogram

2

The amendment made by subsection (1) is treated as having come into force at 6pm on 12 March 2008.

Fuel duties

13Rates and rebates: simplification

1

HODA 1979 is amended as follows.

2

In section 1 (hydrocarbon oil), omit—

a

subsections (3A) and (3B),

b

in subsection (3C), “; and petrol is “leaded petrol” if it is not unleaded petrol”, and

c

subsections (6) and (7).

3

In section 6 (hydrocarbon oil: rates of duty), for subsection (1A) substitute—

1A

The rates are—

a

£0.5035 a litre in the case of unleaded petrol,

b

£0.6007 a litre in the case of light oil other than unleaded petrol, and

c

£0.5035 a litre in the case of heavy oil.

4

In section 6AB(5) (duty on bioblend), omit the words from “of the description” to the end.

5

In section 11(1) (rebate on heavy oil), omit—

a

in paragraph (b), “which is not ultra low sulphur diesel”, and

b

paragraph (ba).

6

In section 13AA(6) (restrictions on use of rebated kerosene), omit “which is not ultra low sulphur diesel or sulphur-free diesel”.

7

Omit section 13A (rebate on unleaded petrol).

8

In section 20AAA(4)(a) (mixing of rebated oil), for “section 6(1A)(d)” substitute “ section 6A(1A)(c) ”.

9

In section 27(1) (interpretation)—

a

in the definition of “rebate”, omit “13A,”,

b

omit the definitions of “sulphur-free diesel”, “sulphur-free petrol”, “ultra low sulphur diesel” and “ultra low sulphur petrol”, and

c

for “and “leaded petrol” have” substitute “ has ”.

10

In Article 21(7) of the Renewable Transport Fuel Obligations Order 2007 (S.I.2007/3072), for “sulphur-free petrol” substitute “ unleaded petrol ”.

11

In consequence of this section, omit—

a

in FA 1987, section 1(2) and (3),

b

in FA 1997, section 7(5)(a) and (b) and (8)(b),

c

in FA 2000, section 5(3),

d

in FA 2001, section 2(1), and

e

in FA 2004, section 7(2), (5) to (7) and (8)(a).

12

The amendments made by this section are treated as having come into force on 1 April 2008.

14Biodiesel and bioblend

Schedule 5 contains provision about biodiesel and bioblend.

15Rates and rebates: increase from 1 October 2008

1

HODA 1979 is amended as follows.

2

In section 6(1A) (main rates)—

a

in paragraph (a) (unleaded petrol), for “£0.5035” substitute “ £0.5235 ”,

b

in paragraph (b) (light oil other than unleaded petrol), for “£0.6007” substitute “ £0.6207 ”, and

c

in paragraph (c), (heavy oil), for “£0.5035” substitute “ £0.5235 ”.

3

In section 6AA(3) (rate of duty on biodiesel), for “£0.3035” substitute “ £0.3235 ”.

4

In section 6AD(3) (rate of duty on bioethanol), for “£0.3035” substitute “ £0.3235 ”.

5

In section 8(3) (road fuel gas)—

a

in paragraph (a) (natural road fuel gas), for “£0.1370” substitute “ £0.1660 ”, and

b

in paragraph (b) (other road fuel gas), for “£0.1649” substitute “ £0.2077 ”.

6

In section 11(1) (rebate on heavy oil)—

a

in paragraph (a) (fuel oil), for “£0.0929” substitute “ £0.0966 ”, and

b

in paragraph (b) (gas oil), for “£0.0969” substitute “ £0.1007 ”.

7

In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.0929” substitute “ £0.0966 ”.

8

In section 14A(2) (rebate on certain biodiesel), for “£0.0969” substitute “ £0.1007 ”.

9

The amendments made by this section come into force on 1 October 2008.

16Fuel for aircraft and boats, heating oil and fuel for certain engines

1

In section 6(1A) of HODA 1979 (main rates)—

a

after paragraph (a) insert—

aa

£0.3103 a litre in the case of aviation gasoline,

b

in paragraph (b), after “petrol” insert “ or aviation gasoline ”.

2

The amendments made by subsection (1) come into force on 1 November 2008.

3

Schedule 6 contains—

a

in Part 1, provision consequential on subsection (1) and provision about fuel used for private pleasure-flying or private pleasure craft, and

b

in Part 2, provision about certain heavy oil used for heating or as fuel for certain engines.

Environmental taxes and duties

17Rates of vehicle excise duty

1

Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

2

In paragraph 1 (general)—

a

in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding 1,549cc), for “£180” substitute “ £185 ”, and

b

in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£115” substitute “ £120 ”.

3

In paragraph 1B (graduated rates for light passenger vehicles), for the table substitute—

Table

CO2 emissions figure

Rate

(1)

(2)

(3)

(4)

Exceeding

Not exceeding

Reduced rate

Standard rate

g/km

g/km

£

£

100

120

15

35

120

150

100

120

150

165

125

45

165

185

150

170

185

225

195

210

225

385

400

The table has effect in relation to vehicles first registered before 23 March 2006 as if—

a

in column (3), in the last row, “ 195 ” were substituted for “385”, and

b

in column (4), in the last row, “ 210 ” were substituted for “400”.

4

In paragraph 1J (light goods vehicles)—

a

in sub-paragraph (a) (vehicle which is not lower-emission van), for “£175” substitute “ £180 ”, and

b

in sub-paragraph (b) (lower-emission van), for “£115” substitute “ £120 ”.

5

In paragraph 2(1) (motorcycles)—

a

in paragraph (b) (motorbicycle and engine's cylinder capacity more than 150cc but not more than 400cc), for “£32” substitute “ £33 ”,

b

in paragraph (c) (motorbicycle and engine's cylinder capacity more than 400cc but not more than 600cc), for “£47” substitute “ £48 ”, and

c

in paragraph (d) (any other case), for “£64” substitute “ £66 ”.

6

The amendments made by this section have effect in relation to licences taken out on or after 13 March 2008.

18Standard rate of landfill tax

1

In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax), for “£32” substitute “ £40 ”.

2

The amendments made by subsection (1) come into force on 1 April 2009 and have effect in relation to disposals made (or treated as made) on or after that date.

19Rates of climate change levy

1

In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—

Table

Taxable commodity supplied

Rate at which levy payable if supply is not a reduced-rate supply

Electricity

£0.00470 per kilowatt hour

Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility

£0.00164 per kilowatt hour

Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state

£0.01050 per kilogram

Any other taxable commodity

£0.01281 per kilogram

2

The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2009.

20Rate of aggregates levy

1

In section 16(4) of FA 2001 (rate of aggregates levy), for “£1.95” substitute “ £2 ”.

2

The amendment made by subsection (1) has effect in relation to aggregate subjected to commercial exploitation on or after 1 April 2009.

21Carbon reduction trading scheme: charges for allocations

1

The Treasury may impose charges by providing for carbon reduction trading scheme allowances to be allocated in return for payment.

2

The charges may only be imposed by regulations.

3

The regulations may make any other provision about allocations of allowances which the Treasury consider appropriate, including (in particular)—

a

provision as to the imposition of fees, and as to the making and forfeiting of deposits, in connection with participation in the allocations,

b

provision as to the persons by whom allocations are to be conducted,

c

provision for allocations to be overseen by an independent person appointed by the Treasury,

d

provision for the imposition and recovery of penalties for failure to comply with the terms of a scheme made under subsection (4),

e

provision for and in connection with the recovery of payments due in respect of allowances allocated (including provision as to the imposition and recovery of interest and penalties), and

f

provision conferring rights of appeal against decisions made in allocations, the forfeiting of deposits and the imposition of penalties (including provision specifying the person, court or tribunal to hear and determine appeals).

4

The Treasury may make schemes about the conduct and terms of allocations (to have effect subject to any regulations under this section); and schemes may in particular include provision about—

a

who may participate in allocations,

b

the allowances to be allocated, and

c

where and when allocations are to take place.

5

In this section—

  • “carbon reduction trading scheme allowances” means tradeable allowances that—

    1. a

      are provided for in a relevant trading scheme, and

    2. b

      represent the right to carry on a specified amount of activities that consist of the emission of greenhouse gas or that cause or contribute, directly or indirectly, to such emissions;

  • “relevant trading scheme” means a trading scheme that—

    1. a

      is made under Part 3 of the Climate Change Act 2008,

    2. b

      applies to persons by reference to their consumption of electricity (whether or not by reference to other matters as well), and

    3. c

      applies only to persons who consume electricity—

      1. i

        for business or charitable purposes, or

      2. ii

        for the performance of functions of a public nature,

      (whether or not they also consume electricity for other purposes);

  • “specified” means specified in the relevant trading scheme.

6

Regulations under this section are to be made by statutory instrument.

7

A statutory instrument containing the first regulations under this section may not be made unless a draft of the regulations has been laid before, and approved by a resolution of, the House of Commons.

8

Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons unless a draft of the regulations has been laid before, and approved by a resolution of, that House.

Gambling duties

22Rates of gaming duty

1

For the table in section 11(2) of FA 1997 substitute—

Table

Part of gross gaming yield

Rate

The first £1,911,000

15 per cent

The next £1,317,000

20 per cent

The next £2,307,000

30 per cent

The next £4,869,500

40 per cent

The remainder

50 per cent

2

The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 April 2008.

23Amusement machine licence duty

1

In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—

Table

Months for which licence granted

Category A

Category B1

Category B2

Category B3

Category B4

Category C

£

£

£

£

£

£

1

455

230

180

180

165

70

2

905

450

355

355

320

135

3

1355

675

535

535

485

200

4

1805

905

710

710

645

265

5

2260

1130

890

890

805

335

6

2710

1355

1065

1065

965

400

7

3160

1580

1245

1245

1125

465

8

3610

1805

1420

1420

1290

530

9

4065

2030

1600

1600

1450

600

10

4515

2260

1775

1775

1610

665

11

4965

2485

1955

1955

1770

730

12

5160

2580

2030

2030

1840

760

2

The amendment made by subsection (1) has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4pm on 14 March 2008.