BUDGET 2005 - Duties

Vehicle excise duty (VED) and road fuel duty

With effect from 1 April 2005 VED rates are generally increased by £5 for most cars and light goods vehicles, while VED rates for cars that are least polluting remain frozen.

Road fuel duties will increase from 1 September 2005 by 1.22p per litre.

Other duties or levies

From 16 March 2005 tobacco duty rates rise in line with inflation and a similar rate of increase applies to duties on beer and wine with effect from midnight on 20 March 2005. There is no increase in duty on spirits, cider and sparkling wine.

Stamp taxes and duty

While the rates for Stamp Duty Land Tax remain unchanged, the threshold for the zero per cent rate is increased from £60,000 to £120,000 from 17 March 2005. Tax payable for transactions in residential property remains at 1% where consideration exceeds £120,000 but does not exceed £250,000.

The zero per cent band for residential property in 'designated disadvantaged areas' remains at £150,000. The previous exemption for non-residential transactions in 'designated disadvantaged areas' ends on 16 March 2005.

A series of Stamp Duty Land Tax anti-avoidance measures with an effective date of 17 March 2005 were announced. These include:

• Use of Group relief
• Use of acquisition relief
• Grants of leases by bare trustees to their principal
• Certain variations of leases to remove restrictive covenants
• Use of repayable loans or deposits as consideration
• Reduction of market value by encumbrance
• Use of 'sub-sale relief' in alternative finance transactions
• Use of partnerships

Other budget information pages:

• Introduction
• Budget Highlights
• Business Tax & Investment Incentives
• Capital Taxes
• Duties
• Income Tax & Personal Savings
• Value Added Tax
• Company Cars
• National Insurance
• Other Measures Announced