Budget 2013

On Wednesday 20th March 2013, Chancellor George Osbourne gave his 2013 Budget speech, announcing several new tax and economic measures.  The main points of the budget are summarised below:

Personal Tax
• An increase in the personal allowance for 2014/15 from £9,440 to £10,000, which will increase in line with inflation
• An increase in the higher rate tax band for 2014/15 from £41,450 to £41,865
• New scheme for tax free childcare – the relief will be 20% of the costs of childcare up to a total childcare cost of £6,000 per child, meaning a saving of £1,200 per child, which is being phased in from Autumn 2015

Employment Tax
• The Government is to introduce an employment allowance of up to £2,000 for all business and charities to offset against their employer Class 1 National Insurance Liability from April 2014
• An increase in the tax free loan allowance to employees/directors from £5,000 to £10,000

Business Tax
• The main rate of corporation tax is to reduce to 20% from 1 April 2015, with the small company rate remaining at 20%
• Flat rate expenses for business use of a home

Other Taxes & Benefits
• The VAT registration threshold is to increase to £79,000 from £77,000, with the deregistration threshold increasing to £77,000 from 1st April 2013
• The IHT nil rate band will be frozen at £325,000 until 5th April 2018

These changes are in addition to the announcements already made in the Autumn Statement, details of which can be found here.

Please contact us for further information on how both the 2013 Budget and the 2012 Autumn Statement will affect you and your business.

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