Budget cash changes
Page 10
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• Self-employed drivers and small haulage firms face a number of changes to the way they are taxed following last week's Budget.
From next 6 April 1996 selfemployed, Class 4 workers will benefit from a 1.3% drop in National Insurance payments (to 6%), but NI payments will no longer be eligible for tax relief, which is currently 50%.
A driver who declares a return of £20,000 will pay about 1700 less NI; drivers liable for the weekly Class 2 contributions will pay £6.05 a week from next April (up from £5.75).
The Treasury says that although the changes will have little effect on Class 4 contributors, they should simplify tax returns. Other Budget changes include: • Raising the VAT threshold by £1,000 to £47,000; • Giving Customs officers more powers to challenge companies' VAT decisions; • Capping business premises rates rises to 5% (down from 7.5%).
• Allowing owners of small businesses to retire aged 50 (instead of 55): they will be entitled to tax relief on the proceeds of selling the company, up to a value of £625,000.
• Removing the tax burden from payments to private income plans that guarantee the policy holder an income if he or she is unable to work. This is expected to reduce the cost of premiums.