2013 Budget - key points


Chancellor George Osborne insisted he would continue to ‘hold to the right track’ as he delivered Wednesday’s budget against a grim economic backdrop of dwindling growth and higher borrowing.

Seen by some as a ‘fiscally neutral’ package of tax increases and public spending cuts, the Chancellor maintained his measures would benefit those who ‘aspire to work hard and get on’.

Winners in this year’s budget included first time home buyers who will be able to get a five year interest free loan from the Government for 20% of the property deposit if they can raise 5%. Basic Rate taxpayers will also benefit from a rise in the personal allowance to £10,000 from April 2014. Parents will also benefit from a new tax break scheme to replace childcare vouchers giving discounts of 20% on nursery costs up to £6,000 a year.

Those who will lose out include public sector workers who will be disappointed with a 1% pay increase extended until 2015/16. Annuity holders will also see their returns remain low due to the Bank of England’s continued Quantitative Easing (QE) programme.

Here are the key points outlined at a glance;

Tax

  • The personal allowance will be raised to £10,000 from next year, not from 2015 as previously planned.
  • A new employment allowance will take the first £2,000 off the employer national insurance bill for every company in the country. Around 450,000 small businesses - one third of all employers - will pay no employer NI at all.

Childcare

  • Tax-free childcare vouchers worth £1,200 per child will be introduced, and there will be increased support for families with children on universal credit.

Pensions

  • The flat-rate pension worth £144 a week will be brought forward to 2016.

Public sector

  • The public sector pay cap of 1% will be extended by one year to 2015-16.

Fuel Duty

  • The planned fuel duty rise expected this September will be scrapped.

Mortgages

  • There will be a new ‘Help-to-Buy’ scheme for those struggling to find mortgage deposits.  This will include £3.5bn for shared equity loans and a Government interest-free loan worth 20% of the value of a newly-built home.
  • There will be a new mortgage guarantee, sufficient for £130bn of loans, to help people who cannot afford a big deposit.

Alcohol

  • The planned 3p rise in beer duty has been scrapped and replaced by a 1p cut in duty on a pint of beer.
  • The beer duty escalator has been scrapped, but planned rises for all other alcohol duties will be maintained.

  • Date posted:
    22/03/2013
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