March 26, 2013

Budget 2013: What to expect

This post was written by: Aston Bond Law Firm

On the day Osborne was delivering the Budget 2013 before the House of Commons he tweeted this “Today I’ll present a Budget that tackles the economy’s problems head on helping those who want to work hard & get on delivered”. While I leave  discussions whether the budget in any way helps  to tackle economic problems the UK has been facing for the last few years to economics I aim to summarise changes in tax world (not a  full list) which might affect our clients on a daily basis;

  • Income Tax Personal Allowance will be increased to £9,440 from April 2013.
  • Additional income tax rate of 50% which applies to taxpayers earning over £150,000 per annum will be reduced to 45% for the tax year of 2013/2014.
  • Unlimited income tax relief will be capped at the greater of £50,000 or 25% of an individuals’ income. Charitable reliefs or share loss relief applying to EIS or SEIS will be exempt.
  • UK income tax on any income arising to non-resident athletes who will compete in the London Anniversary Games in 2013 or the Glasgow Commonwealth Games in 2014 will be exempt.
  • £2,000 Employer National Insurance Allowance will be introduced.
  • Statutory residence test for taxpayers will be introduced from 6 April 2013. Please see my previous blog on this matter.
  • Entrepreneur’s Relief will be extended to include gains made on shares acquired via the exercise of EMI options.
  • IHT nil rate band (£325,000) is frozen until 2017-2018.
  • Small profit rate of corporation tax will remain at 20% from April 2013. The main rate will be reduced to 21% from April 2014.
  • Annual Investment Allowance will be increased £250,000 for two years for   investments in plant and machinery made on or after 1 January 2013.
  • Annual Exempt Amount for CGT will be £11,000 in April 2014.

Tulin Kiranoglu, Solicitor, Tax Advisor