Budget 2013 Highlights
The Chancellor has delivered his message with clear support for entrepreneurs in Britain following recent announcements in the 2013 Budget. We have highlighted the key features as follows:
The main rate of corporation tax will be reduced to 21% from April 2014 with an additional reduction in April 2015 to 20%.
The Chancellor has also introduced a relief for employers national insurance contributions of £2,000 per year from April 2014 in a bid to help smaller businesses.
The Government has announced their ‘Help to Buy’ initiative in order to assist home buyers by providing a loan for 20% of the purchase price of a newly built home. Further, a ‘mortgage guarantee’ may be provided where the borrower meets certain conditions in order to assist those who have insufficient funds for deposits.
It has also been announced that stamp duty on the purchase of shares which are traded on growth share markets such as AIM in support of boosting asset management sectors in the UK.
As announced in December 2011, legislation will be introduced to take effect from 6 April 2013 which will provide a statutory definition of tax residence for individuals. The legislation will eliminate as far as possible the concept of ‘ordinary residence’. Overseas workday relief, will in future be available to non-domiciled individuals who have been non resident for 3 tax years. It will apply for a fixed period of residence in the UK regardless of whether the individual settles or intends to settle in the UK.
Legislation will be introduced to reduce the annual allowance for pensions tax relief to £40,000 for the 2014-15 tax year onwards and to reduce the lifetime allowance to £1.25 million for the 2014-15 tax year onwards.
The government has reiterated its commitment to offshore tax compliance through further agreements with the Isle of Man, Jersey and Guernsey to further enhance the automatic exchange of information.
The income tax rates have not altered significantly, the main changes being as follows:
- Increase in the personal allowance from 2014 to £10,000 (£9,440 from April 2013).
- Tax free childcare vouchers being 20% up to £6,000 of childcare costs for each child when both parents are in work. This will help parents get back to work.
- The basic and higher rates of income tax for 2013 – 14 will remain at the 2012-13 levels (20/40%). The additional rate of income tax will be reduced from 50% to 45% from 2013-14.
The key features of the Chancellors announcement is the support for small businesses and assistance for individuals purchasing homes in the UK. We will post a further detailed review of the key changes included in the 2013 Budget shortly.