The 2013 Budget will be delivered by Chancellor George Osborne this Wednesday, but with the political struggle at the moment for moving to cut austerity and stoke growth, what will he do?
The Chancellor had always planned to cut spending in order to plug the deficit and reduce borrowing, but must do this whilst creating new jobs and allowing the economy to grow from it's current stagnation, the longest stagnant growth period for over 100 years.
Will he change his plans and attempt to please the public and critics by announcing headline tax cuts? Well, his motto is to help the people who 'work hard, own their own home and are saving for retirement', so let's see how his plans may pan out.
- We already know that 'Top rate tax', currently 50%, is being reduced to 45% from April 2013.
- Personal allowances, for under 65's, are being sharply increased from £8,105 to £9,440 - however age related allowances are frozen at previous levels. Timescale to raise the allowance to £10,000 the long term goal, should be announced.
- Further cuts to corporation tax are possible, with the Autumn Statement signalling the plan to reduce the main rate from 28% to 21%.
- Tax Avoidance will be a hot issue, with all the press over the last year of large companies evading practices in order to pay little tax on large profits.
- Bringing forward the £144/week flat rate pension to 2016 (previously planned for a 2017 launch).
- Recent press of Prime Minister David Cameron's desire to impose a minimum alcohol price, signals a possible above inflation rise in alcohol duties from April. Alcohol duties already rise by 2% over inflation, but this may be increased. The provision here may allow some change in the treasury to ease off on Motorists, who could suffer a number of increases from VED, Company Car Tax to Fuel Duty.
How to keep up to date with Budget 2013 Announcements
There are a number of ways in which you can keep track of how the announcements made for Budget 2013 will affect you:
- We will blog the full Budget 2013 Announcement on Wednesday 20th March 2013 here at TaxPenny.
- We have already produced and updated a Budget 2013 Calculator with details provided from the Autumn Statement and will be updated as rates, allowances and duties are announced. You will be able to see whether you are better or worse off with this tool.
- The new Universal Credit, which replaces Tax Credits, Housing Benefits, Income Support and Job Seekers Allowances is due to launch next month in parts of Manchester and then launch nationwide from October 2013 for new applicants. We have produced a Universal Credit Calculator, with which you can see how much you can claim under the proposed new scheme. This will also be updated with any amendments on Budget Day.