Introduction
The Chancellor of the Exchequer, Hugh Dalton, leaked key points from his 1947 Budget to a journalist on the way into the House of Commons to make his speech. The London Evening Standard published the details before he had finished, and he had to resign. The most surprising feature of the March 2013 Budget was history repeating itself: the press had received a briefing in advance, and someone posted the Standard’s front page on Twitter while it was still embargoed. It is unlikely that Mr Osborne will have to follow Dalton’s example.
The Standard picked a supposed crowd-pleaser for its headline: a 1p cut in the rate of beer duty, instead of an increase. Mr Osborne expressed the wish that this generosity should be passed on to customers in pubs, although it may be hard to notice an extra penny in the change from the price of a round.
Apart from that, the Chancellor had very little good news to share: borrowing is up, growth is down, and rectifying the country’s fiscal deficit will take longer than anyone had hoped. These themes have recurred in each of his Budget speeches – we can only hope that at some point the trend will change and the actual results will be better than the forecasts.
Housebuilders, housebuyers and estate agents will have approved of the ‘help to buy’ announcement, promising interest-free shared equity loans to assist with the purchase of newly built homes. There will also be a mortgage guarantee scheme for buyers who cannot afford the deposit required by a lender. The housing market has not recovered from the boom and bust of the last decade: Mr Osborne hopes that this encouragement will lead to steady growth and not another bubble.
As has become the custom, the Budget speech was much shorter than it used to be – under an hour – but the volume of paper setting out the detail gets longer and longer. There is confirmation of changes that have already been announced, new announcements of changes to take effect now, changes to come in future years, and proposals and consultations which may lead to new policies or to nothing.
We have gone through the papers and tried to sort out the important information from the rest – ‘this year and next year’ from ‘sometime and never’. We have summarised the most significant changes and outlined their likely impact on the average taxpayer.
Significant points
- 2013/14 allowances and rates: more people taken out of income tax, more paying at 40%
- Personal allowance for 2014/15 to be £10,000
- £2,000 relief from employer’s NIC introduced for 2014/15
- More detail of proposed ‘employee shareholder’ scheme
- CGT exemption for Seed Enterprise Investment Scheme extended
- Closure of some specific tax avoidance schemes, and ‘General Anti-Abuse Rule’ to come into effect this year
- Further details of ‘cash basis’ for small business profit computations
- Confirmation of annual tax on valuable houses owned in ‘envelopes’
- Statutory test of UK residence introduced from 6 April 2013