Budget 2013 Update

Sunday, May 19, 2013
Belsize Accountancy in Corporation tax rate, Help to Buy Scheme, National Insurance Contributions, PPersonal Allowance, budget

After the announcement of Budget 2013 by Treasury Chancellor George Osborne on 20 March, we summarise the key points in the Budget: 

• An increased income tax allowance from £9,440 in 2013 to £10,000 from April 2014, an increase which is one year earlier than expected. Basic and higher rates of income tax stay the same, which are 20% and 40% respectively. The Chancellor maintained his decision to cut the top rate of tax on pay over £150,000 from 50% to 45% from April 2013. The following table shows the comparison of income tax allowance, tax rate limit and the threshold between 2012 and 2015.

Year	2012/2013	2013/14	2014/2015
Personal allowance	£8,105	£9,440	£10,000
Basic rate of tax limit	£34,370	£32,010	£31,865
Higher rate of tax threshold	£42,475	£41,450	£41,865

 

• From April 2013 anyone wanting to buy a new-build property will be able to access a 20% government loan as long as they have a 5% deposit. The Government will support people who can put down a 5% deposit to buy a home through two schemes to increase the supply of low-deposit mortgages and new housing. These two schemes are a Help to Buy- equity loan and a Help to Buy- mortgage guarantee.  Each scheme will help you to purchase a home valued up to £600,000.
  
• A pledge to cut the main rate of corporation tax from 24% in 2013 down to 21% in 2014, then down to 20% from April 2015. The cut to 20% is the third in a row by George Osborne, with the rate dropping from 28% to 24% in April 2013, and from 24% to 21% in 2014. The reductions in the main corporation tax rate are part of a co-ordinated strategy to improve UK tax competitiveness in the EU and make UK more open for business.

 

• Around 450,000 small businesses will pay no Employer National Insurance Contributions from next year after the introduction of a new Employment Allowance. This employment allowance will remove the first £2,000 off the employers' national insurance contribution on the small businesses. A person who has set up their own business, and is thinking about taking on their first employee will benefit from this allowance. They can hire someone on £22,400 per annum, or four people on the minimum wage, and pay no employment tax from next year.

Article originally appeared on Belsize Accountancy (https://belsizeaccountancy.co.uk/).