George Osborne presented his third Budget on Wednesday 20th March 2013.
In his opening statement he set the scene for some of the new measures announced, stating 'this is a Budget for people who aspire to work hard and get on'.
Towards the end of last year the Government issued the majority of the clauses, in draft, of Finance Bill 2013 together with updates on consultations. The publication of the draft Finance Bill clauses is now an established way in which tax policy is developed, communicated and legislated.
The Budget updates some of these previous announcements and also proposes further measures. Some of these changes apply from April 2013 and some take effect at a later date, so the timing needs to be carefully considered.
Our summary focuses on the issues likely to affect you, your family and your business. To help you decipher what was said we have included our own comments. If you have any questions please do not hesitate to contact us for advice.
Main Budget proposals
- Date set for increase in the personal allowance to £10,000.
- New scheme for tax free childcare.
- Further reduction in the main rate of corporation tax to 20% from 1 April 2015.
- Employee-shareholder contracts will be exempt from income tax and NIC for the first £2,000 of shares received.
- The introduction of an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 NIC liability from April 2014.
- A capital gains tax re-investment relief for gains made in the tax year 2013/14 where the gain is invested in Seed Enterprise Investment Scheme shares.
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:
- Personal allowance substantially increased for 2013/14
- Restrictions in the higher age related personal allowances and their availability
- An increase in the Annual Investment Allowance limit from £25,000 to £250,000
- Introduction of a cash basis for reporting profit for the smaller unincorporated business.