Chancellor Gordon Brown has announced tax breaks for first-time homebuyers and pensioners as well as enhanced tax credits for low-income and lone parent families struggling with childcare costs.
Here is a guide to the main benefit and tax changes that come into force on 6 April.
Income Tax
Many of the tax and benefit changes which will come into force next month were announced in December's pre-Budget report.
These include the thresholds on employees' National Insurance - now 11% of earnings above �94 a week and 1% of earnings above �630 a week.
The chancellor has increased the thresholds at which taxpayers incur income tax at rates of 10%, 22% and 40% in line with inflation. This will come as a relief to those who feared he would freeze the thresholds and so drag more people into higher-rate tax bands.
| Income tax and national insurance |
|
| Personal allowance | 2004-5 | 2005-6 |
| �4,745 | �4,895 |
| Tax bands | | |
| 10% on earnings | �4,746-�6,765 | �4,896-�6,985 |
| 22% on earnings | �6,766-�36,145 | �6,986-37,295 |
| 40% on earnings | �36,146 + | �37,296+ |
| Source: HM Treasury |
Savings and property
The chancellor has confirmed that the current �7,000 tax-free savings limit for Individual Savings Accounts (Isas) will be kept until 2010.
The Budget also offered first-time buyers in many parts of the UK a reprieve from stamp duty.
The chancellor increased the starting threshold for stamp duty from �60,000 to �120,000.
Families, who fear that rising property values could boost their inheritance tax (IHT) bill, may benefit from a rise in the inheritance tax threshold.
From 6 April, the first �275,000 of an estate will be exempt from inheritance tax, levied at 40%.
| Pensions, savings and property |
|
| Inheritance tax threshold | 2004-5 | 2005-6 |
| �263,000 | �275,000 |
| Stamp duty | 2004-5 | 2005-6 |
| Up to �60,000 | 0% | 0% |
| �60,001 to �120,000 | 1% | 0% |
| �120,001 to �250,000 | 1% | 1% |
| �250,001 to �500,000 | 3% | 3% |
| Over �500,000 | 4% | 4% |
| Source: HM Treasury |
'Sin' taxes
Car drivers were given a pre-election sweetener with another freeze in petrol duty. Vehicle Excise Duty on small and medium-sized cars will also remain the same.
Tax increases on booze and fags were broadly in line with the increases seen in the last Budget.
| 'Sin' taxes and transport |
| * Took effect on 1 September 2004 |
| 2004-5 | 2005-6 |
| Spirits | Frozen | Frozen |
| Cigarettes | +8p a packet | +7p a packet |
| Beer | +1p a pint | +1p a pint |
| Wine | +4p a bottle | +4p a bottle |
| Petrol | +1.9p a litre* | +1.22p a litre |
| Diesel | +1.9p a litre* | +1.22p a litre |
| Source: HM Treasury |
Benefits
Pensioners are being offered a �200 council tax rebate, which will be paid in the autumn - but may be a one-off payment.
Pensioners will also receive a �200 winter fuel payment while the over-80s will get �300 - the same as this winter.
Low-income families with childcare needs will receive a significant boost, as an extra �1bn is being given to these families.
Payments for children, under the Child Tax Credit scheme, will rise in line with earnings and over the coming three years by a total of 13%, he said.
| Benefits and tax credits |
|
| State pension | 2004-5 | 2005-6 |
| Single | �79.60 | �82.05 |
| Couple | �127.25 | �131.20 |
| Pension credit (guarantee) | �105.45 | �109.45 |
| Child benefit (first) | �16.50 | �17 |
| Child benefit (other) | �11.05 | �11.40 |
| Child tax credit (family element) | �545 a year | �545 a year |
| Child tax credit (child element) | �1,625 a year | �1,690 a year |
| Source: HM Treasury |
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