Welcome to the 2008 Budget Newsletter from Connolly Accountants Ltd

Billed as a ‘responsible’ and ‘green’ Budget, the environment found its way to the top of the agenda in Chancellor Alistair Darling’s debut Budget speech.

Darling used his first Budget statement to introduce a series of measures aimed at reducing the UK’s carbon emissions, including a new zero rate of car tax to be levied in the first year for new, low polluting vehicles – a measure that was part of a wider reform of vehicle excise duty.

Despite attempts to prove his ‘green’ credentials, the Chancellor declared that a 2p increase on fuel duty will be postponed from April to October this year to help the country through the current ‘credit crunch’.

The Chancellor told MPs that the credit crunch posed a ‘major risk to the world’s economy’. As a consequence, Darling has revised the economic growth predictions that were made in his Pre-Budget Report last October.

Growth forecasts have been cut for 2008 to 1.75%-2.25%, a substantial reduction on the original 2.5%-3%. Darling has also advised that public borrowing will increase to £43 billion next year, rather than fall to the £36bn he had anticipated.

Darling’s brief reign as Chancellor has already been dogged by controversy. He confirmed the much-criticised changes to capital gains tax and the taxation of non-domiciliaries.

He also confirmed the changes to corporation tax.

Richard Lambert, CBI Director-General, said: ‘The Government has much to do if it is to win back its enterprise credentials, but the measures announced today are a credible first step on the road.’

For a detailed overview of the Budget Report and what it means for you and your business, visit our Report summary by clicking here


WHAT THEY SAID

‘This is a responsible Budget to secure Britain’s stability in the face of global uncertainty’ - Chancellor Alistair Darling

‘What we need is a Government that helps people when times are tough, instead it kicks them when they are down’ – David Cameron, Conservative Leader

‘This is not a green Budget, this is not a people's Budget. This is a tinkering con-trick Budget that protects the rich and abandons the poor’ - Nick Clegg, Liberal Democrat Leader.

‘The Government has much to do if it is to win back its enterprise credentials, but the measures announced today are a credible first step on the road’ - Richard Lambert, CBI Director-General

‘Business will be relieved by the apparently low key tone of this Budget, which is welcome after the recent ill considered and damaging announcements on CGT and non-doms’ – Miles Templeman, Institute of Directors

‘Finally it seems we may have an announcement from the Chancellor that doesn’t spring any nasty surprises on small businesses’ - John Wright, Federation of Small Businesses


FULL BUDGET RELEASES

For the full Budget announcements and press releases visit: http://www.hm-treasury.gov.uk/budget/budget_08/bud_bud08_index.cfm


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2008 Budget Report: Darling downgrades economic growth forecasts
The Chancellor has lowered the UK's economic growth forecasts amid growing concerns over the global credit squeeze.
Click here for the full story

2008 Budget Report: the business reaction
The business community has cautiously welcomed the 'lack of surprises' in Darling's debut Budget.
Click here for the full story

2008 Budget Report: the political reaction
'The cost of living is going up and Labour is making it worse,' Conservative leader David Cameron has claimed in the wake of the Chancellor's Budget statement.
Click here for the full story