The 2013 Budget statement was made yesterday at 12.30pm by the Chancellor of the Exchequer, George Osborne.
About the Budget
The Budget is a report presented each year by the Chancellor of the Exchequer to Parliament and the nation. The primary role of the Budget is to control public finances by setting out how much tax the Government will collect, how much the Government will borrow and how much the Government will spend. The Budget Responsibility and National Audit Act 2011 requires the Government to produce a Budget Report (which is the formal name for the Budget) for each financial year. The Charter for Budget Responsibility sets out what the Budget Report must cover.
The Budget is a report presented each year by the Chancellor of the Exchequer to Parliament and the nation. The primary role of the Budget is to control public finances by setting out how much tax the Government will collect, how much the Government will borrow and how much the Government will spend. The Budget Responsibility and National Audit Act 2011 requires the Government to produce a Budget Report (which is the formal name for the Budget) for each financial year. The Charter for Budget Responsibility sets out what the Budget Report must cover.
When the Government publishes the
Budget, the Chancellor gives a speech to Parliament in which he sets out the
key decisions on tax, borrowing and spending, and his reasons for taking those
decisions. This speech is known as the Budget Statement.
The official forecast on which
the Chancellor bases the Government’s Budget is provided by the Office for
Budget Responsibility (OBR). The Budget Responsibility and National Audit
Act 2011 requires the OBR to publish two economic and fiscal forecasts for each
financial year, including one published at the Budget. The OBR’s duty is to
examine and report on the sustainability of the public finances and it is
required to do so objectively, transparently and impartially.
PLEASE NOTE: This update is
not intended as an in-depth analysis of the Chancellor’s speech but we hope
this brief snapshot helps you gain a quick grasp on the key points delivered by
the Chancellor from the dispatch box.
For full details of the
following headlines (and more) you may wish to visit the HM Treasury website BUDGET 2013
MAIN HEADLINES FROM THE
SPEECH
Forecasts
·
Due to the current economic
climate the Chancellor announced adjustments to previous growth forecasts from
those previously announced.
- Growth forecast for 2013 –
revised down to 0.6%
- Growth forecast for 2014 –
revised down to 1.8%
- Growth forecast for 2015 –
remains unchanged at 2.3%
- Growth forecast for 2016 –
remains unchanged at 2.7%
- OBR expects 600,00 more jobs
in 2013
- Deficit forecast for
2013/2014 is 7.4%
- Borrowing forecast for 2013 -
£114 billion reducing to £97 billion in 2014/2015
- Likelihood of meeting debt
target has deteriorated.
Taxation
- Personal tax allowance – to
increase to £10,000 from April 2014
- Corporation tax to be reduced
by a further 1% in 2015 to 20%
- Schedule 19 tax for UK
domiciled funds to be abolished
- Stamp duty on shares trading on
growth markets (e.g. Alternative Investment Market (AIM)) to be abolished
- Major tax avoidance and evasion
measures to be introduced, including naming and shaming of firms promoting
tax avoidance schemes
- Tax free child care vouchers to
be introduced – 20% off first £6,000 per child
- Beer duty escalator scrapped
altogether and beer duty to be cut on Sunday 24TH March by 1p – all other
alcohol duties to increase as planned
Transport/Fuel/Energy
- Fuel – Car fuel duty rise due
in September 2013 cancelled indefinitely
- Commitment to low carbon energy
via plans to develop major carbon capture and storage projects
- New generous tax regime for
early investment in shale gas
Small Business / Business
in General
- Capital Gains tax relief for
firms sold to employees
- Employment allowance to be
introduced – Worth up to £2000 for every business – effective from
2014 to help small and medium size enterprises
Public Sector
- Schools and health departmental
budgets to remain protected
- Public Sector pay rises limited
to 1% for a further year
Housing
- Help to Buy Scheme introduced -
£3.5 billion given to shared equity loans – loan can be provided up to 20%
of the value of a new build home – 5% deposit required. – interest free
for first 5 years – repaid when home is sold – available to anyone – home
can’t be more than £600,000
- New mortgage guarantee to be
provided to lenders – available to all homeowners subject to responsible
lending requirements being met – This will support £130 billion worth of
mortgages – starts in 2014 – Designed to help support people without large
deposits
- 15,000 more homes to be built
and Right to Buy scheme to be extended further
- Government to accept
recommended pay increases for armed forces
Other Points
- New single tier pension brought
forward to 2016 - worth £144 per week in today's terms
- Equitable Life With Profit
policies sold before 1992 – Government to pay £5000 ex gratia payment to
policyholders
- Cap on social care
costs to be introduced in 2017 and will protect savings above £72,000
- Residential care
threshold for means testing to increase to £118,000 from £23,000 in 2017
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