· Personal allowances to £10,000 by April 2014 - No income tax to pay on the first £9,440 earned from 5 April 2013 & rising to £10,000 from 5 April 2014. This places cash back into the hands of the lower paid in society and so will help disposable income.
· Reduction in top rate of income tax down to 45% – From April 2013 the highest rate of tax will fall from 50% to 45%, this was one of the government’s policy promises.
· Small Employer Allowance - From 1 April 2014 employers will have not have to pay employers tax for the first £2,000. This means that a business can employ either 1 employee on £22,000 or 4 staff on minimum wage and not pay any additional tax. This should help start up businesses and those wishing to take on that extra member of senior staff.
· Helping hand for the house market – There is a raft of measures to encourage people to buy new homes including a government backed guarantee so home owners puts 5% in and then the government pays 20%. This makes financing the purchase of new homes more affordable and achievable.
· No rise in fuel duty – The expected rise in fuel duty of 1.89p has been scrapped, fuel is a large cost for employers and employees and so not to having to find this rise is good but not a real term saving for our clients.
· Single rate of Corporation tax – In April 2015 the rate of corporation tax will reduce to 20% making it the joint lowest in Europe. This continues to make it potentially tax advantageous to be a company rather than trading in other business vehicles.
· Tax free child care – This is to be phased in from Autumn 2015 and will give a tax credit for up to 20% or £1,200 of childcare costs per child. This is trying to make it pay for people to return to work and cover the ever increasing cost of childcare.
· Access to finance – Extension of the Enterprise Finance and Enterprise capital fund should bring further access to business angel lending.
I see this as a mixed budget with growth being downgraded but with some ideas on how to try to get the local economy going. In North Devon we need more people with disposable income to help our retail sectors which have faced a tough few years, plus the additional shot in the arm for house building could help kick start our local economy.
If you want to know what the budget may mean to you please do just give me a call in the office.
Matthew Melksham
Senior Manager Direct Dial: 01237 428 213
Mobile: 07775 921 702
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