The Budget
2005 - Pensions & Employment Taxation
Simplification of
pensions
Technical changes will be made to the simplified pension regime that will
operate from 6 April 2006. There is also to be fresh consultation on the
anomalies arising from the different treatment of scheme pensions and
lifetime annuities in the calculation of pension commencement lump sums.
Outplacement counselling
The current income tax exemption for outplacement counselling and retraining
expenses for full-time employees who lose their jobs will be extended
to part-time employees with effect from 6 April 2005.
Company car and fuel
benefit
The CO2 emissions level qualifying for the minimum petrol percentage charge
(15%) will be 140g/km for 2005/06, 2006/07 and 2007/08.
The figure for the company car fuel benefit
charge will remain unchanged at £14,400 for 2005/06.
Computer and bicycle
exemptions
From 6 April 2005, there will be no income tax charge if an employee pays
the market value to buy computers or bicycles previously loaned to them
by their employer. The change reverses existing legislation that can give
rise to a tax charge where assets are transferred to an employee and have
previously been provided as benefits in kind.
Payments to employees
at universities and technical colleges
From 1 September 2005, payments of up to £15,000 (previously £7,000)
for an academic year can be made free of tax to employees for periods
of attendance on full-time educational courses at recognised educational
establishments. From the same date, such payments will also be free of
Class 1 national insurance contributions regardless of whether they have
been made under a training contract or an employment contract. The changes
relate to the 2005-06 and subsequent academic years.
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