Tag: HM Treasury

The UK 2013 Budget – Some things you might need to know….

Big Ben with city bus and flag of England, London

First the Good News……

Income tax

The personal allowance for under-65s will rise by £560 to £10,000 in 2014/15.

Housing

From 1 April, the Help-to-Buy scheme will give people who have a 5% deposit a 20% interest-free loan on homes worth up to £600,000. The qualifying period for people looking to purchase their home under the Right-to-Buy scheme has gone down to three years.

Childcare

Working families will benefit from a 20% tax relief on childcare costs, offering an annual saving of £1,200 per child under 12. The scheme will be phased in from autumn 2015.

An additional £200 million will be provided to increase childcare support in Universal Credit, with the commitment being introduced from April 2016.

Corporation Tax

Corporation tax will be reduced by a 1% to 20% in April 2015.

Employers National Insurance

Employers’ national insurance payments will be cut by £2,000 from April 2014

To take advance of the allowance, firms will simply have to inform HM Revenue & Customs, and the Treasury says it will be “delivered through standard payroll software”.

Mr Osborne added: “For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed.”

“They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.”

450,000 small firms will pay no employer National Insurance.

So who are the overall winners and losers – overall we are losers!

Budget 2013

Based on Treasury analysis, the middle income families have done better than the bottom quartile and top quartile, but overall we are all worse off (based on all households).

The Economy and Borrowing are in worse shape than previously predicted

Growth forecast for 2013 halved to 0.6% from 1.2% in December

Office for Budget Responsibility (OBR) watchdog predicts UK will escape recession this year

Growth predicted to be 1.8% in 2014; 2.3% in 2015; 2.7% in 2016 and 2.8% in 2017.

The OBR predicts borrowing of £121bn this year, the same as last year, and £120bn for 2014-5

George Osborne says borrowing as a share of GDP will fall from 7.4% in 2013-14 to 5% in 2015-16

Debt as a share of GDP to increase from 75.9% in 2012-13 to 85.6% in 2016-17

http://www.bbc.co.uk/news/uk-politics-21851965

You can read the full Budget Report by clicking on this link http://cdn.hm-treasury.gov.uk/budget2013_complete.pdf

steve@bicknells.net

Will employees give away their rights in return for shares?

Its an interesting concept and tax advantages sound good too.

The Chancellor of the Exchequer, the Right Honourable George Osborne MP, has today announced plans for a new kind of employment contract called an owner-employee. New employee-owners will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for, any gains on which will be exempt from capital gains tax.

Companies of any size will be able to use this new kind of contract, but it is principally intended for fast growing small and medium sized companies that want to create a flexible workforce.

Under the new type of contract, employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8.

Employee-owner status will be optional for existing employees, but both established companies and new start-ups can choose to offer only this new type of contract for new hires. Companies recruiting employee-owners will continue to have the option of inserting more generous employment conditions into the employment contract if they want to.

Legislation to bring in the new employee-owner contract will come later this year so that companies can use the new type of contract from April 2013. The Government will consult on some details of the contract later this month.. Employee-owners receiving full capital gains tax relief on the shares awarded as part of their contract will still be eligible for existing employee share ownership schemes such as the Enterprise Management Incentive.

http://news.bis.gov.uk/Press-Releases/No-capital-gains-tax-on-employee-share-ownership-for-new-employee-owners-68152.aspx

steve@bicknells.net