A summary of key points from the chancellor's Budget speech.
NEW measures from Budget 2013 and those announced in the 2012 Autumn Statement.
Income tax
NEW from 2014/15
- Personal allowance raised to £10,000
- Basic rate limit £31,385
- The 10% band to drops to 0%
- See Tax rates and allowances
NEW tax-free childcare
From Autumn 2015
- Relief of up to 20% of childcare costs, with a limit of £1,200 towards child care costs for working parents whether self-employed or employees.
- See Tax-free Childcare scheme
NEW Home ownership support
- Help-to-buy scheme put down 5% and government adds in 20% interest free for first period
- Mortgage guarantee scheme to be available to all home owners to support 130 billion of mortgages from 2014 for three years
Pensions
- Ex-gratia payments to Equitable Life with profits policy holders who held policies in 1992
- From 6 April 2012 abolishion of contracting out.
From 2014/15
- Reduction in annual allowance and lifetime allowance
- See Pensions: tax planning guides
Sole traders and partnerships
From 2013/14
- Simpler Income Tax Scheme - unincorporated business cash accounting and fixed rate expense claims
- NEW consultation on bringing Class 2 NICs collection into Self Assessment
- NEW the Office of Tax Simplification will carry out a scoping exercise on ways to simplify the taxation of partnerships.
NEW partnership anti-avoidance
- NEW measures to tax loans from close companies to partnerships using the s455 CTA 2010 tax charge.
The Government has now announced that it will consult on measures to:
- Remove the presumption of self-employment for limited liability partnership (LLP) partners, to tackle the disguising of employment relationships through LLPs.
- Counter the manipulation of profit/loss allocations (by both LLPs and other partnerships) to secure tax advantages.
A consultation document will be published with proposals to address both issues in the spring, with legislation to be introduced in Finance Bill 2014.
Seed Investment scheme
For 2013/14
- Gains accruing in 2013/14 may be reinvested in SEIS schemes in 2013/14 and 2014/15
- A correction to the legislation to ensure that company will not be disqualified from SEIS where established by a corporate formation agent
- See Seed Enterprise Investment Scheme (SEIS)
Corporation tax
- Main rate falls to 21% in April 2014
- NEW main rate falls to 20% in April 2015
- NEW from 20 March 2013 rules clarified on corporation tax deduction for share awards, see Employment related securities (share scheme basics)
- Bank levy rate to increase in 2014
- Annual Residential Property Tax (ARPT) owned by companies from 1 April 2013
- CGT: UK residential property & non-natural persons on gains attributable to ownership after April 2013.
Corporation tax anti-avoidance
NEW measures to tackle:
- Corporate loss buying
- Close company loans: avoidance of s455 tax by making loans via intermediaries, see Running an LLP in tandem with a company
- Trade and property business deductions: a rule to govern relationship between corporation tax and income tax deduction.
Capital allowances
- R & D - increase in above the line tax credits
- Shale gas exploration allowances
- Low emission vehicles, from 2015/16 extension of the 100% allowance until 2018
Employers and employees
From 2014/15
- NEW employment allowance: £2,000 allowance on employers NICs designed to help small firms
- NEW: Tax free employment beneficial loans increases to £10,000
- NEW: RTI - HMRC relax filing requirements for smaller employers until 5 October 2013
- NEW: employers to expect NICs increases when the contracted out pension is abolished
- NEW: collection of tax debt via PAYE: limits to be increased
- NEW consultation to combat PAYE avoidance by use of offshore intermediaries.
2015/16
- 2 new percentage bands for company car tax
- see C02 emissions: appropriate percentages
- Cars and car and van fuel benefit to increase by RRI figures
Inheritance tax
- NEW anti-avoidance rules which may limit a deduction for liabilities against an individual's estate on death to the extent that it is repaid the creditor, or when a liability exceeds the value of the exempt assets that it was incurred to acquire.
Gift Aid
- Introduction of a single Gift Aid declaration online in Finance Act 2014.
Stamp duty
- NEW stampt duty abolished on share transactions on UK companies quoted on Small Company Growth Markets.
VAT
- Registration and de-registration VAT thresholds increase on 1 April 2013
- Place of supply telecoms, broadcasting and e-services at customer location.
Tax avoidance
- NEW avoidance measures include agreements with Isle of Man, Jersey and Guernsey.
- NEW consultation to combat PAYE avoidance by use of offshore intermediaries.
- The introduction of a General Anti-Abuse Rule (GAAR) from July 2013 (the date of Royal Assent to the 2013 Finance Bill)
- NEW SDLT sub-sale schemes additional measures "to put beyond doubt" that sub-sale/transfer for rights schemes are ineffective. Purchasers to notify HMRC by 30 September 2013.
- Tax and procurement: goverment suppliers will have to self certify tax compliance, see Tax-avoiders to be excluded from government contracts
Other
- 1p off the price of a pint of beer
- The fuel escalator has been scrapped
- Fuel duty frozen for two years
Economic
- The economy is expected to grow by 0.6% this year not 1.2% as expected. Followed by growth of 1.8% in 2014, and 2.3% in 2015
- The national debt will hit 85% of GDP, and will not start falling until 2017-18 (a year later than expected)
- Whitehall spending cuts will reach £3bn, not £2.5bn as expected, to fund a capital expenditure programme