Aside from the changes in the income tax banding there were no other policies that seem to directly affect contractors.
The income tax banding will take effect from 6th April 2008. The 10% banding has been removed and the 22% banding has been reduced to 20% for income earned up to £36,000.
The other main themes of this budget can be utilised through our different benefits and schemes we run.
The budget promises to encourage more parents back to work by making it more financially viable through family credits. For Tarpon contractors they can also pay their child carers by using childcare vouchers making it all the more tax efficient for parents to return back to work.
Those contractors wishing to do their bit by travelling greener have a variety of tax saving options. If you decide to cycle to work you can purchase a bike with our Mii Bike Salary Sacrifice scheme and further by travelling to and from work by bicycle, contractors can claim 20p per mile. Also those sharing a lift to work can claim 5p per mile per passenger. Further contractors who already use public transport for business can claim 100% of their travel costs back. So not only are you doing your bit for the environment but it's also helping to increase your net take home as well.
Also charities will continue to be able to claim gift aid back at 22% despite the tax band change. For Tarpon contractors they can donate directly through our Give as you Earn scheme saving the charity precious time and money. Our Give as you earn scheme means you can nominate a monthly amount to donate and it will be donated to the charity of your choice pre tax, boosting what you give by at least 20% or even a huge 40% if you are a higher rate tax payer.
Another of the chancellors' objective is to encourage saving for the future. For Tarpon contractors we've provided access to a market leading Salary Sacrifice Group personal pension plan, which will also reduce your tax bill as well as encouraging contractors to save and plan for those well-earned days of retirement.
So although the budget may appear quite ordinary, through the many employee benefits, contractors can continue to make it work in their favour.
If you would like any more information on any of the schemes, allowances or other employee benefits we operate then please contact us here at Tarpon on our details that will follow.