Tax Breaks: How The 2013 Budget Will Affect The Man On The Street
Chancellor George Osborne announced the details of his 2013 Budget today – detailing changes to taxes and investments in a bid to boost the economy and reduce unemployment.
The headline news is the raising of the personal tax free allowance to £10,000 to be introduced a year earlier than anticipated. It will now come into place in April 2014.
This is good news for all but the highest earners – especially those in the basic rate band, who pay 20%. The allowance is currently £8105 and will rise to £9440 from April 6.
Other announcements that will affect individuals include:-
- A planned 3p beer duty rise has been cancelled and replaced with a 1p cut, although planned increases for other alcohol duties remain.
- The proposed fuel duty increase which would have added 3p per litre – initially earmarked for September 2013 – has been scrapped.
How Will The 2013 Budget Affect Home Owners?
Plans for helping would-be home buyers have also been announced. The new Help to Buy scheme expands on a previous scheme known as First Buy.
Aimed at new-build homes, it enables a 5% deposit, along with another 20% of the cost of the home in a ‘shared-equity’ loan, which is interest free for five years.
The acceptance criteria have been made more lenient, with the scheme being open to all buyers of new-build homes up to a value of £600,000.
In addition, a new mortgage guarantee aimed at increasing the availability of loans has been announced.
Up to £130bn of mortgages would be supported, with the idea being that high street lenders would have their loans underwritten by the government.
Employment Allowance: A Helping Hand For Small Businesses
Along with the scrapped fuel duty increase, a major announcement was the new Employment Allowance, which will mean companies get £2000 off their National Insurance bill every year.
That corresponds to hiring someone on £22,000 – or four people on the minimum wage and having no jobs tax to pay.
This measure has widely been seen as a welcome boost to small businesses and is likely to have an impact in decreasing unemployment.