By Lyndsey Hall
So, this year’s Budget was not without drama! The Evening Standard published details of the Budget in advance of the Chancellor’s announcement, and it turned out that the majority of the leaked information was correct. Below is a summary of the key points of Osborne’s Budget 2013; and you can view the full document here.
- Osborne announced that we are “building a modern, reformed state, bringing business to our shores with competitive taxes and fixing the banks”.
- He called it a budget for our “Aspiration Nation”.
Economy
- The Office for Budget Responsibility (OBR) forecast growth of 0.6% for this year, half the figure that was announced in December.
- OBR predict UK will escape recession this year, with growth predicted at 1.8% in 2014 and 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017.
- OBR says Government is on course to meet fiscal targets one year early.
- EU budget deal has saved Britain £3.6bn.
Help for Business
- Corporation tax to be cut by 1% in 2015.
- New employment allowance to cut NI bills by £2k for every firm.
- 450,000 small firms will pay no employer NI.
- Government procurement from small firms to rise fivefold.
- Tax relief for investment in social enterprises.
- Stamp duty axed on shares traded on growth markets like Aim.
- Tax avoidance and evasion measures, including agreements with Isle of Man, Guernsey and Jersey, aimed at recouping £3bn in unpaid taxes.
Income Tax
- Income tax limit to be raised to £10,000 in 2014, a year earlier than previously planned.
Jobs
- 600,000 more jobs expected this year than same time last year.
- Claimant count to fall by 60,000.
- According to Osborne, for every 1 public sector job loss, private sector creates 6.
Housing
- Shared equity schemes ended, with interest-free loans of up to 20% of value of new-build properties.
Borrowing
- Borrowing of £114bn this year, up from previous £108bn forecast.
- Borrowing set to fall to £108bn next year, and £97bn, £61bn, and £42bn in subsequent years.
Inflation
- 2% Bank of England target to stay in place.
- Bank remit to be changed to focus on growth as well as inflation.
Transport and Infrastructure
- £3bn extra for new projects every year from 2015/16 until 2020, total of £15bn.
Spending and Pay
- Most government departments to see budgets cut by 1% in each of next two years.
- Schools and NHS protected.
- £11.5bn in further cuts earmarked in 2015/16 Spending Review.
- 1% cap on public sector pay extended to 2015/16 and limits on “progression” pay rises in the sector.
- Military exempt from “progression” pay limits.
- Proceeds of Libor banking fines to be given to military causes, such as Combat Stress charity.
Pensioners
- Single flat-rate pension of £144 a week brought forward a year to 2016.
- Cap on social care costs confirmed.
Families
- 20% tax relief on childcare up to £6k per child from 2015.
- £5k payments for those who lost money on Equitable Life policies bought before 1992. Extra money for those on low incomes.
Fuel/Alcohol/Cigarettes
- September’s 3p fuel duty rise has been scrapped.
- April’s 3p rise in beer duty has been scrapped. Beer duty is due to be cut by 1p.
- Annual inflation+2% rise in beer duty ended, but “duty escalator” for wine, cider and spirits to remain in place.
Energy and Environment
- Tax incentives for ultra low-emission cars.
- Pottery industry in Midlands exempt from climate change levy.
- Tax allowances for investment in shale gas.
What do you think of the Budget? Did it meet your expectations? Let us know in the Comments whether this year’s budget is set to have a positive or negative effect on your business.
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