The Budget 2003

For the second year in succession, Gordon Brown delivered his Budget after the start of the new tax year. The change in House of Commons hours meant that the speech was made at 12.30pm, three hours earlier than normal.

In the run up to the Budget there was much speculation as to the extent to which taxes would be raised to generate funds to meet the costs of the war in Iraq. Mr Brown announced that £3bn had been set aside to cover the costs of military action.

Overall the Budget was declared to be tax neutral. It may have seemed that little of consequence was announced but there is plenty of food for thought. This summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included comment and suggested action points throughout the summary.

If you have any questions then please do not hesitate to contact us for advice or to discuss any action you may need to take.

Main budget proposals

  • New Child Trust Fund
  • Changes to employee share schemes
  • Extended period for 100% capital allowances on computer equipment
  • Intended increase in thresholds for ‘small’ and ‘medium-sized’ businesses
  • Changes to promote research and development activity
  • Improvements to capital gains tax taper relief
  • Extension of VAT flat rate and annual accounting schemes
  • Stamp duty reform

Previous announcements


Some of the changes detailed in this summary have been the subject of earlier announcements. Here is a reminder of some of the more important ones:

  • Freezing of the personal allowance
  • New Child Tax Credit
  • New Working Tax Credit
  • National insurance increases
  • New fuel scale charge regime
  • Payroll giving: 10% supplement extended
  • Changes to Employee Benefit Trust rules
  • Extension to VAT flat rate scheme.

In the pipeline
Several important developments are in the pipeline but are still at the consultation stage:
  • Reform of pensions
  • Changes to the rules on domicile and residence
  • Company vans
  • Corporation tax reform
  • Reform of the Construction Industry Scheme
  • Stamp duty reform.

The Budget proposals may be subject to amendment in the Finance Bill which is due to be published on 16 April 2003 and receive Royal Assent during the summer. You are therefore advised to contact us before taking any action as a result of the contents of this summary.