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Walker Thompson are one of Coventry's leading accountancy firms, offering a wide range of advice on business matters including accounts, tax, audit and planning for acquisitions and disposals.
The Chancellor George Osborne pressed ahead with an austerity-first programme in his 2013 Budget delivered 20 March 2013. He conceded that growth will be lower than earlier predictions and government debts higher this year than he expected, he maintained however that the government must finish what it started in order to maintain the credibility of the international money markets and keep interest rates low. Interestingly perhaps he referred to a Budget for Aspiration, but for who?
Growth next year is forecast to be 1.8% rising to 2.8% by 2017 but some scepticism must remain after forecasts have been reviewed downwards for some time
For some the Chancellor is seen as a magician able to pull another rabbit out of the hat whilst for others the question is whether he still has the hat at all
Lets consider the key issues announced today
He remains convinced that measures will not put the UK into a “triple dip recession”
Reductions in the main rate of Corporation Tax 1% lower from April will be competitive with rates around the globe and will be funded in part by adjustments in Bank Levy Rate
Capital Gains Tax reliefs are to be extended and assistance with further reliefs will be available to shareholders involved in Management Buy Out arrangements
Personal tax allowances will rise by £560 to £10,000 in April 2014 in line with targets
The Chancellor then announced a package of measures relating to tax anti avoidance including targeted overseas disclosure agreements. This follows hard on the heels of Swiss & Liechtenstein Agreements and is expected to raise £3 billion
A welcome bit of news for business is the introduction of a new Employment Allowance equivalent to £2,000 per year of Employers National Insurance where new employees are engaged and there is assistance for returning employees following sickness. For employees who require season tickets for commuting a tax free loan up to £10,000 will be possible from employers
Social & Welfare
The Help-to-Buy scheme for those house buyers that are struggling to get a mortgage will be expanded for shared equity properties. This will be augmented by an introduction of interest free loans up to 20% of a new build property valuation up to £600,000
There will be Tax free child care vouchers worth £1,200 per child and further support for families who are eligible for universal credit
The overall cap-on social care costs due to come in in 2017 will protect savings over £72,000. Means tested threshold for assistance will rise substantially from £23,000 to £118,000
The Flat rate pension worth £144 a week is to be brought forward to 2016
September's planned fuel duty increase has been scrapped as has the beer price escalator. Beer will now benefit from a 1p cut in duty. All other duties previously announced in 2012 will remain so wines, spirits and tobacco prices will continue to rise in the short term
Education and spending on Health will be ring fenced but other Government budgets will be cut by 1%
Public sector staff pay will be capped at 1 per cent and extended into 2015/16
Serving military in our armed forces are exempted from changes to progression pay
New limits on “annually managed expenditure” will be introduced including welfare debt interest and payments to the EU
The Government will fund an escalating programme of infrastructure spending starting at £3 billion in 2015/16
As with any Budget, the devil will be in the detail and we would strongly advise anyone to contact their professional advisor if they feel that any of the Budget reforms are likely to affect them especially with regard to tax planning
For a more detailed analysis click here
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- Walker Thompson is a trading name of Walker Thompson Ltd registered in England and Wales. Company registration number 06574838
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