You may recall Michael referred to last year’s budget as the most significant since Nigel Lawson’s epic reform of 1986. This year, the changes are relatively minor, with many of the new measures for 2013/14 and beyond having been previously announced.
Nevertheless, we have compiled our usual ‘Budget Top Ten’, setting out our pick of the key changes happening in the forthcoming tax year. We’ve even managed to compile this without needing to mention the most important budget change – the reduction of 1p duty on beer!
One of the most significant changes taking place in April 2013 was in fact introduced in the previous budget. The 5% cut in the highest rates of income tax offers a substantial tax saving for high earners; the higher the income, the greater the saving. Conversely, the increase in the personal allowance from £8,105 to £10,000 for non-high earners offers a significant tax saving.
The current theme of the budget, as in previous years, remains focussed on encouraging growth in new businesses. Clearly the government appreciate something needs to be done in light of the reduction in the forecast for growth, from 1.2% to 0.6%. You will see within the top ten, the extension of the relief for investment in start-up companies and the introduction of the new Patent Box 10% tax rate for those companies undertaking innovation. There is also a welcome reduction in the corporation tax rates to 20% from 1 April 2015.
As the world seems to get smaller, we are pleased the government has been forced to comply with EU rules to allow businesses to trade in low tax jurisdictions without penal taxes being imposed in the UK. As many of our clients undertake some level of international business, this is a very welcome announcement.
I hope you find the top ten budget highlights of interest and would welcome the opportunity to discuss how we can ensure you take advantage of the various reliefs and structure your affairs in the optimum manner.
On behalf of all the team at Forbes Dawson, best wishes for 2013/14.
Forbes Dawson LLP
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