Chancellor George Osborne introduced Budget 2013 as one for an ‘aspiration nation’; for those who aspire to ‘own their own home, get their first job, or start their own business.’
As always, the Budget was delivered alongside the latest economic forecasts from the Office for Budget Responsibility, and the outlook looks decidedly tough. It revised down its UK GDP growth forecast for 2013 from 1.2 per cent to 0.6 per cent. It now expects 1.8 per cent growth in 2014, 2.3 per cent in 2015, 2.7per cent in 2016 and 2.8 per cent in 2017.
Key announcements affecting businesses include:
- New Employment Allowance– will take the first £2,000 off the national insurance bill of every employer, from April 2014
- Corporation tax – reduced by one per cent to 20 per cent from 2015. The small and main rates of corporation tax will also be merged
- Stamp Duty – abolished on shares traded in growth markets, such as the AIM
- Research and development (R&D) – the rate of above the line R&D credit increases to 10 per cent from April 2013
- Capital gains tax – the 50 per cent relief on chargeable Seed Enterprise Investment Scheme (SEIS) gains which are reinvested back into the SEIS will be extended.
Key announcements affecting individual finances include:
- New childcare scheme – for working families, the Government will contribute 20 per cent towards the first £6,000 of childcare costs for each child, from Autumn 2015
- Help to Buy – will invest £3.5 billion in shared equity homes. The Government will provide equity loans of up to 20 per cent – providing individuals can put down a five per cent deposit – towards the cost of buying a new build home worth less than £600,000
- Tax free personal allowance – increases to £10,000 from April 2014
- Single-tier state pension – worth £144 per week, implementation will be brought forward to 2016
- Social care costs – capped at £72,000 from 2016
- Fuel duty – planned September 2013 increase scrapped
- Beer duty – escalator scrapped and beer duty cut by one pence per pint from 25 March 2013.
We can advise you about how the measures contained in Budget 2013 affect your personal or business finances.