Below is a summary of the budget released 20 March 2013
For the complete statement see
www.hm-treasury.gov.uk/budget2013_statement.htm
The link for more detail about the new schemes mentioned in the speech, are as below:-
www.hm-treasury.gov.uk/budget2013.htm
Budget 2013 statement Budget 2013 Statement to the House of Commons by the Rt Hon George Osborne, MP, Chancellor of the Exchequer
We’ve now cut the deficit not by a quarter, but by a third.
We’ve helped business create not a million new jobs, but one and a quarter million new jobs.
Today, I’m going to level with people about the difficult economic circumstances we still face and the hard decisions required to deal with them.
Our nation is in a global race – competing alongside new centres of enterprise around the world for investment and jobs that can move anywhere.
Building a modern reformed state we can afford. Bringing businesses to our shores with competitive taxes.
Fixing the banks. Improving our schools, our skills, our infrastructure, and our industry.
This is a Budget for those who aspire to own their own home; who aspire to get their first job; or start their own business;
A Budget for those who want to save for their retirement and provide for their children.
I can confirm that people sent to Cyprus to serve our country, in our military or government, will be protected in full from any tax on their deposits.
40 per cent of all we export, we export to the eurozone.
There is a huge effort across this government to grow Britain’s trade with the fast growing parts of the world – and exports to Brazil, India and China are up almost two thirds.
UK firms now export more goods to non-EU countries than to EU countries: the first time this has happened in over two decades.
GDP for last year has turned out to be a little higher than the OBR forecast in December, but this year, their output forecast is reduced to 0.6 per cent growth.
While less than we would like, our growth this year and next year is forecast by the IMF to be higher than France and Germany.
The OBR then expect the recovery to pick up to 1.8 per cent in 2014, 2.3 per cent in 2015, 2.7 per cent in 2016 and 2.8 per cent in 2017.
Crucially, jobs are being created.
Mr Deputy Speaker, when we started the unavoidable task of reducing the size of the public sector workforce, some in this House expressed doubts that the private sector would be able to make up the difference. I’m glad to report to the House, that their lack of confidence in British businesses has proved misplaced.
It is a tribute to the energy and enterprise of British companies that for every one job lost in the public sector in the last year, six jobs have been created in the private sector. Compared to this time last year, the OBR now expect 600,000 more jobs in 2013 – and there will be 60,000 fewer people claiming unemployment benefit.
The deficit has fallen from 11.2 per cent of GDP in 2009-10, to a forecast of 7.4 per cent this year. That is a fall of a third. It then falls further to 6.8 per cent next year, 5.9 per cent in 2014-15.
Our judgement has since been supported by the IMF, the OECD and the Governor of the Bank of England. I don’t propose to change that judgement three months later. Mr Deputy Speaker,
I’ve also had representations at this Budget for measures that would add £33 billion a year extra to borrowing on top of the figures I’ve announced. Recovering from the financial crisis has exposed the shortcomings of conventional monetary tools.
We in Britain have had to innovate and develop new tools.
We are now actively considering with the Bank of England whether there are potential extensions to the successful Funding for Lending Scheme that will boost lending still further. And we are also setting out our plans for lending from our new Business Bank.
We also need supply side reform – to throw the full weight of our efforts behind the entrepreneurial forces in our society. Our fundamental overhaul of the planning laws are now helping homes to be built and businesses to expand. Our reform of schools, universities and apprenticeships is probably the single most important long-term economic policy we’re pursuing.
Our support for European free trade agreements with India, Japan and the US is a priority of our foreign policy.
So I accept Michael Heseltine’s excellent idea of a single competitive pot of funding for local enterprise.
I also fully endorse the report of Doug Richard to make the most our apprenticeships.
We have the second largest aerospace industry in the world. For the first time in forty years we manufacture for export more cars than we import.
We’re backing international successes like these with £1.6 billion of long-term funding for the industrial strategy the Business Secretary launched this week. And today we build on our new tax reliefs coming in this year for the creative industries like high-end television and animation with new support for our world-class visual effects sector.
To help small firms, we’ll increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative. We will fund the proposal to make growth vouchers available to small firms seeking advice on how to expand.
We’ll support the manufacture of ultra low emission vehicles in Britain with new tax incentives. The HM for Stoke on Trent Central has argued passionately and in a non-partisan way about the damage energy costs are doing to his city’s famous ceramics industry – and he’s persuaded me. So we will exempt from next year the industrial processes for that industry and some others from the Climate Change Levy.
But I also want Britain to tap into new sources of low cost energy like shale gas. So I am introducing a generous new tax regime, including a shale gas field allowance, to promote early investment. Shale gas is part of the future.
Mr Deputy Speaker, we can help companies grow and succeed by building infrastructure, backing local enterprise and supporting successful sectors. Our Seed Enterprise Investment Scheme offers generous incentives to investors in start ups.
They have asked me to extend the CGT holiday – and I will.
Employee ownership helps create an enterprise culture. So we’re making our new employee shareholder status more generous, with NICs and income tax relief. And we’re introducing capital gains tax relief for sales of businesses to their employees. Companies that look after their employees, and help them return to work after periods of sickness, will get new help through the tax system too. And we’re going to double to £10,000 the size of the loans that employers can offer tax free to pay for items such as season tickets for commuters.
My HR for Enfield North and others have put forward proposals to help investment in social enterprises. I have listened and we will introduce a new tax relief to encourage private investment in these social enterprises.
Research and development is absolutely central to Britain’s economic future. So today I’m increasing the rate of the above the line R & D credit to 10 per cent. Along with our new 10 per cent corporation tax rate on profits from patents coming in next month, this will help make us one of the most internationally attractive places to innovate.
Here in Britain we’ve cut corporation tax from the 28 per cent we inherited to 21 per cent next year. So in April 2015 we will reduce the main rate of corporation tax by another 1 per cent.
Britain will have a 20 per cent rate of corporation tax – the lowest business tax of any major economy in the world. By merging the small company and main rates at 20p, we will abolish the complex marginal relief calculations between them, and give Britain a single rate of corporation tax for the first time since 1973. Today,
I am unveiling one of the largest ever packages of tax avoidance and evasion measures presented at a Budget. They include agreements with the Isle of Man, Guernsey, and Jersey to bring in over a billion pounds of unpaid taxes.
So to the working parents struggling with the costs of childcare, and the mother wondering whether it makes financial sense to get a job, we offer this: Tax free childcare. New tax-free childcare vouchers for working families: 20 per cent off the first £6,000 of your childcare costs for each child. And increased childcare support for those low income working families on universal credit.
A simple, flat rate pension accessible to everyone and worth £144 a week. Any one pound you save, will be a pound you can keep. For employers that means paying the same employer national insurance as those without defined benefit schemes.
Private sector employers can adjust their pension benefits to accommodate the extra cost; Helping with aspiration also means helping those who want to keep their homes instead of having to sell it to pay for the costs of social care. It’ll also come in in 2016. It will be set to protect savings above £72,000, and we’ll raise the threshold for the means test on residential care from just over £23,000 to £118,000 that year too.
For decades politicians have talked of doing something for savers and those who have to sell their homes to pay for care; and yet nothing has been done. And what symbolises that more than the desire to own your own home. Today I can announce Help to Buy. Help to Buy has two components. First, we’re going to commit £3.5 billion of capital spending over the next three years to shared equity loans. From the beginning of next month, we will offer an equity loan worth up to 20 per cent of the value of a new build home – to anyone looking to move up the housing ladder. You put down a five per cent deposit from your savings, and the government will loan you a further 20 per cent. The loan is interest free for the first five years. It is repaid when the home is sold. Previous help was only available to those who were first time buyers, and who had family incomes below £60,000. Now help is available to all buyers of newly built homes on all incomes. The only constraint will be that the home can’t be worth more than £600,000 – but this covers well over 90 per cent of all homes.
The second part of Help to Buy is even bolder – and has not been seen before in this country. We’re going to help families who want a mortgage for any home they’re buying, old or new, but who cannot begin to afford the kind of deposits being demanded today. We will offer a new Mortgage Guarantee. This will be available to lenders to help them provide more mortgages to people who can’t afford a big deposit. These guaranteed mortgages will be available to all homeowners, subject to the usual checks on responsible lending. Using the government’s balance sheet to back these higher loan to value mortgages will dramatically increase their availability. We’ve worked with some of the biggest mortgage lenders to get this right. And we’re offering guarantees sufficient to support £130 billion of mortgages. It will be available from start of 2014 – and run for three years.
Today, I am cancelling this September’s fuel duty increase altogether. Petrol will now be 13 pence per litre cheaper than if we had not acted over these last two years to freeze fuel duty.
We’re taking a penny off a pint.
In two weeks time, the allowance will reach £9,440 with the single largest cash increase in its history. 24 million taxpayers will see their income tax bill cut by an extra £200. Over 2 million of the lowest paid will be taken out of tax altogether.
The cost of employing people is a burden on small firms. And it is a real barrier to taking an extra person on. To help create jobs and back small businesses in this country I am today creating the Employment Allowance. The Employment Allowance will work by taking the first two thousand pounds off the employer National Insurance bill of every company. It’s worth up to £2,000 to every business in the country. It will become available in April next year once the legislation is passed.
This blog is intended for information purposes only. It is not intended to be used to make all of your business decisions but as a guide only.