The income tax rates and bands for 2003/04 were not announced in the Pre-Budget Report. Details of these are normally made available in the main March Budget.
The Chancellor confirmed the level of income tax allowances for 2003/04. The personal allowance for those aged under 65 is frozen at its 2002/03 level for 2003/04. Personal allowances for those aged 65 and over will be increased and are summarised below together with the other proposed allowances announced in the Pre-Budget Report.
| 2003/04 £ |
2002/03 £ |
|
| Personal allowance | ||
| - under 65 | 4,615 | 4,615 |
| - 65 – 74** | 6,610 | 6,100 |
| - 75 and over** | 6,720 | 6,370 |
| Married couple’s allowance* | ||
| - aged less than 75 and born before 6.4.35** | 5,565 | 5,465 |
| - 75 and over** | 5,635 | 5,535 |
| - minimum amount | 2,150 | 2,110 |
| Age allowance income limit** |
18,300 | 17,900 |
| Notes *Qualifies for relief at 10% **Reduce age allowance by £1 for every £2 of excess income over £18,300 |
||
In 2000 a measure was introduced whereby the government add a 10% supplement to all donations made to charities through the Payroll Giving Scheme for three years from 6 April 2000. The supplement was expected to run out on 5 April 2003 but has been extended for one further year to April 2004.
In December 2002 a Green Paper on pensions will be published. Alongside this the government will consult on proposals to simplify the taxation of pensions and deliver greater flexibility and choice to individuals, businesses and the pensions industry.
In his Pre-Budget Report speech the Chancellor made it clear, to the relief of many people, that tax relief on pension contributions would continue. He also confirmed the government’s plans to introduce a Pension Credit from October 2003 to reward pensioners with low and modest incomes.
The government is seeking to develop a series of savings products suitable for each stage in the life cycle. The Chancellor announced further consultation on the detailed implementation of the ‘Child Trust Fund’ (CTF). The CTF would be a universal account, opened for all children at birth, with an endowment paid by the government. He also made reference to the ‘Saving Gateway’ and in particular the pilot projects that were launched in August. The Saving Gateway is an account targeted at individuals from low-income groups.