Despite a raucous Commons and the speaker saying that pantomime season is not for another 9 months there were not many noteworthy changes announced to elicit this reaction.
The summary of the state of the economy was in brief: inflation target remains at 2%; OBR has said triple dip recession will be avoided; UK growth better than many of our competitors; deficit reducing faster than forecast; so budget changes will be fiscally balanced.
For businesses
While the Chancellor said it was a budget for those who want to start their own businesses, and praised the private sector for creating six jobs for every one lost in the public sector there was not alot offered to business:
- New £2,000 per year Employer Allowance to reduce employer NIC contributions for all businesses – this will most benefit the smallest businesses
- Main corporation tax (company profits > £300k) rate reduced to 20% one year earlier than expected in 2015, this has reduced from 28% over the period of this Parliament and makes our rate lower than many of our competitors.
- Stamp duty on Alternative Investment Market (AIM) shares has been abolished
- First £2,000 of share value received by Employee shareholders to be exempt from income tax and NICs
- 100% first year allowance for low-emission cars extended for a further two years from April 2013
For individuals
- Single flat-rate pension of £144 a week brought forward a year to 2016
- 20% tax relief on childcare vouchers up to £6,000 per child from 2015
- Personal allowances already announced at £9,440 for 2013/14, but the increase to £10,000 is being brought forward a year to 2014
- Help to Buy Mortgage Guarantee: Introduction of Government equity guarantee on 95% mortgages to help across the UK. It will help those struggling with deposits, but that could afford to maintain a mortgage
Cars and vehicles
- Of particular interest to classic car owners, Classic Vehicle VED Exemption is being extended a year to (manufacture before) 1st January 1974 with effect from 1st April. This means that over 30,000 1973 built vehicles (mainly L reg) cars will now be tax exempt.
- 100% first year allowance for low-emission cars extended for a further two years from April 2013
- Further changes in banding for low emission vehicles at 50 and 75g CO2 as efficiency of vehicles improves the benefits in kind will increase
Duties and other announcements
- The planned Fuel Duty increase in September has been scrapped
- Alcohol duty – 10,000 pubs were lost in last decade. Planned rise to continue for all alcohol except beer, which will reduce by 1p
- Introduction of the largest ever package of tax avoidance and evasion measures
This article is only for general information and only relate to announcements made on Budget day which will need to be enacted into the Finance Bill so please seek professional advice before taking any steps based on the information shown. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”