Income Tax

The personal allowance will be increased to £9,440 for the tax year 2013/2014.

There will be a further increase in the personal allowance to £10,000 for the tax year 2014/2015.

The higher rate threshold will be reduced to £32,010 in the tax year 2013/2014 and to £31,865 in the tax year 2014/2015.

As previously announced, the highest rate of income tax will be reduced from 50% to 45% for taxpayers with taxable income over £150,000 for the tax year 2013/2014.

Corporation Tax

The small companies rate of Corporation Tax will remain at 20%.

The main rate of Corporation Tax will be reduced by 1% to 21% in April 2014.

There will be a further 1% cut in the main rate of Corporation Tax to 20% in April 2015 so that it coincides with the current small companies rate of Corporation Tax.

 Employment

The Government is to introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer Class 1 secondary NICs liability from April 2014.The allowance will be claimed as part of the normal payroll process through Real Time Information (RTI).

The threshold for employment-related taxable cheap loans to be treated as earnings of the employment, will increase from the current threshold of £5,000 to £10,000 for 2014/15 and subsequent tax years.

A new childcare scheme will be introduced from Autumn 2015 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.

Pensions

Legislation will be introduced in Finance Bill 2013 to reduce the annual allowance to £40,000 and to reduce the standard lifetime allowance to £1.25 million for the 2014-15 tax year onwards.

Legislation will be introduced in Finance Bill 2013 to increase the capped drawdown limit for pensioners of all ages from 100 per cent to 120 per cent of the value of an equivalent annuity.

VAT

The VAT registration and deregistration thresholds will be increased in line with inflation so that with effect from 1 April 2013: –

  • the taxable turnover threshold which determines whether a person must be registered for VAT, will be increased from £77,000 to £79,000;
  •  The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £75,000 to £77,000; and
  •  The registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £77,000 to £79,000.

 Capital Gains Tax

The capital gains tax annual exemption will be increased to £10,900 for the tax year 2013/2014.

Legislation will be introduced to extend the CGT relief for reinvesting capital gains into SEIS shares.

There will be a new exemption introduced in Finance Bill 2014 on the sale of a controlling interest in a business into an employee ownership structure.

Inheritance Tax

The Inheritance Tax nil rate band will be frozen at £325,000 until 5 April 2018.

Fuel Duty

The fuel duty increase that was due to take place on 1 September 2013 will be cancelled.