22nd March 2013 By Simon Misiewicz
Would you like to know how the budget will affect you?
Would you like to know how to make more money from the budget
announcement?
Individuals &
Personal Tax
·
Personal allowance will be:
o
2010-11 = £6,475
o
2011-12 = £7,475 (increased by £1,000)
o
2012-13 = £8,105 (increased by £630)
o
2013-14 = £9,440 (increased by £1,335)
o
2014-15 = £10,000 (increased by £560)
·
20% tax on earnings up to:
o
2010-11 = £37,400
o
2011-12 = £35,000 (reduced by £2,400)
o
2012-13 = £34,370 (reduced by £60)
o
2013-14 = £32,010 (reduced by £2,360)
o
2014-15 = £31,865 (reduced by £145)
The above is great for people that are earning
less than the higher tax rate for example:
John earns £25,000
·
in 2012-13 he would pay £3,379 in tax ((£25,000 –
£8,105) X 20%)) this is before the National Insurance deductions
·
In 2013-14 he would pay £3,312 in tax ((£25,000
- £9,440) X 20%) this is before National Insurance deductions
·
In 2014-15 he would pay £3,000 in tax ((£25,000
- £10,000) X 20%) this is before National Insurance deductions
John not earning above the high
tax bracket is much better off to spend money on personal items for himself and
the family.
Sarah earns £55,000
·
In 2012-13 she would pay £11,884 in tax ((£34,370
– £8,105) X 20%) + (£12,525 X 40%)) this is before the National Insurance
deductions
·
In 2013-14 she would pay £11,822 in tax ((£32,010
– £9,440) X 20%) + (£13,550 X 40%)) this is before the National Insurance
deductions
·
In 2013-14 she would pay £11,627 in tax ((£31,865
– £10,000) X 20%) + (£13,135 X 40%)) this is before the National Insurance
deductions
Fuel
duty
The fuel duty increase that was due to take
effect on 1 September 2013 will be cancelled. Legislation will be introduced in
Finance Bill 2013 to reflect the cancellation of the 1 January 2013 fuel duty
increases and to amend fuel duty rates to reflect the current effective rates
of duty.
Tobacco
duty
The duty rates for all tobacco products
will be increased by two per cent above
the rate of inflation (based on RPI) from 6pm on 20 March 2013.
Alcohol
duty
The duty rates for spirits, wine and
made-wine, cider and perry will increase by two per cent above the rate of
inflation (based on RPI) with effect from 25 March 2013. This will add 2 pence
to the price of a litre of cider, 10 pence to the price of a bottle of wine and
38 pence to the price of a bottle of spirits.
The duty rates on beer will decrease by 6
per cent for low strength beer (less than 2.8 per cent abv), 2 per cent for the
standard rate of beer duty (between 2.8 per cent and 7.5 per cent abv) with
effect from 25 March 2013. This will reduce the price of an average strength
pint of beer by 1 penny.
New
Childcare Scheme from Autumn 2015
A new childcare scheme will be introduced
to support working families with their childcare costs.
For childcare costs of up to £6,000 per
year per child, support of 20% will be available worth up to £1,200. From the
first year of operation, all children under 5 will be eligible and the scheme
will build up over time to include children under 12.
The scheme will provide support for
families where all parents are in work and not receiving support through the
Childcare Element of Working Tax Credits/Universal Credit, or where one has an
income over £150,000. Support will be provided through a childcare account
redeemable at any registered childcare provider.
The new scheme offer will be phased in from
Autumn 2015 as the current system of Employer Supported Childcare is phased
out. The Government will shortly consult on the detail of delivery.
Business main points
·
Corporate tax to be reduced from 21% to 20%.
This is a great saving and another good reason why people should consider
setting up as a limited company.
o
21% from 1st April 2014
o
20% from 1st April 2015
·
National insurance will be cut by £2,000 per
employee. This is a great incentivise businesses to recruit new workers. This
will be applicable from April 2014.
·
VAT
o
the taxable turnover threshold which determines
whether a person must be registered for VAT, will be increase from £77,000 to
£79,000;
o
the taxable turnover threshold which determines
whether a person may apply for deregistration will be increased from £75,000 to
£77,000; and
o
the registration and deregistration threshold
for relevant acquisitions from other EU Member States will also be increased
from £77,000 to £79,000.
Property Main Points:
·
The government will fund 20% of the cost of a
new house through an interest free loan. This is great news for first time
buyers and people looking to upgrade. What will the impact be on older homes?
More to follow.
The NLA Said “However, more targeted measures are needed to
address the chronic shortage of housing across all tenures. We are disappointed
that the Government has decided against Capital Gains Tax Rollover Relief for
landlords as enabling capital gains reinvestment could have provided more
housing for rent in an increasingly pressured market.
The NLA welcomes the significant increase in funding for
Build to Rent. This is an acknowledgement of the evolving and increasingly
important role of the private-rented sector in the UK’s housing market and we
look forward to this initiative providing more good quality affordable
accommodation for rent.”
The public guarantee for £130bn of mortgage lending was part
of the centrepiece Help to Buy scheme announced on Wednesday as part of George
Osborne's "aspiration" budget. On Thursday the opposition made the
scheme the centrepiece of its attacks on the package of measures, with the
shadow chancellor, Ed Balls, contrasting it with a separate policy to withdraw
some housing benefit from families in social housing considered to have surplus
rooms.
"From what I can see, the government is basically
saying that if you've got a spare room in a social home, you will be paying a
bedroom tax," said Balls. "But if you want a spare home and you can
afford it, we'll help you buy one."
The Royal Institution of Chartered Surveyors said that the
Government "needs to be careful this doesn't create another housing
bubble- pushing prices up at the expense of buyers".
The scheme will have two strands, the first - Help to Buy -
offering a loan to top up the deposits of people with a 5pc deposit, adding an
extra 20pc. The first five years of the loan will be interest free, and it will
then attract a 1.75pc payment, which will rise annually by RPI (retail prices
index) inflation plus 1pc.
Borrowers can repay the loan at any time. The loans will be
available on new build homes costing up to £600,000.
A second strand of the scheme called "Mortgage
Guarantee", available from January next year, will incentivise lenders to
give those with smaller deposits better mortgages, because the Government will
guarantee 20pc of the loan. Again, it will only be usable on properties worth
up to £600,000. If a borrower's property is repossessed, the Government will
cover a proportion of the losses suffered by lenders.
Finally
We have been watching the budgets over a number of years and
we can help people save money on their tax through HMRC approved tax avoidance
schemes to ensure people keep more of what they earn
Contact us before 30th June 2013 to get your free
tax planning consultation
For more information please contact us on 0115 946 1991 or
contact Simon on simon@optimiseaccountants.co.uk
or visit our website to see what we do www.optimiseaccountants.co.uk
