Budget 2013: How It Affects You

The latest budget has a little bit of something for everyone

Alanna Petroff 20 March, 2013 | 3:44PM
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Chancellor George Osborne revealed his latest Budget in a statement on Wednesday, saying "this is a Budget for people who aspire to work hard and get on."

The following are some key points from the Budget, which may affect you, your finances and your investments:

- The personal tax allowance will rise to £10,000 in the 2014-15 tax year. This means that you will not pay tax on the first £10,000 that you earn in income each year. As previously announced, the allowance for the 2013-2014 year will rise from £8,105 to £9,440.

- A new £5.4 billion package is being put in place to help people get onto the property ladder, as well as climb up the ladder. The new package includes the Help to Buy programme, which offers two schemes to help individuals buy homes. The first scheme, a three-year programme that will start on April 1, 2013, will see the government provide equity loans to people looking to buy new homes. The loans will be worth up to 20% of the value of new-build homes, provided the homes are priced at £600,000 or lower. "This expands the existing First Buy scheme and is now available to all buyers, not just first-time buyers," stated a government pamphlet

 - The main rate of corporation tax will be reduced by an additional one percentage point to 20% in April 2015.

- Starting in April 2014, all businesses and charities will be given a £2,000 Employment Allowance per year, which they can put towards their employer National Insurance contributions (NICs) bill. The Chancellor says this allowance was specifically designed to help small businesses who are looking to hire their first employee or expand their workforce.

- Stamp duty will be scrapped for shares traded on growth markets like AIM starting in April 2014.

- The fuel duty rise that was set for September 2013 has been axed. "This will mean that fuel duty will have been frozen for nearly three and a half years, the longest duty freeze for over 20 years," stated the government in its Budget document.

- The government plans to launch a new Tax-Free Childcare Scheme in the autumn of 2015 to support working families. The government says it will pay for 20% of the first £6,000 in childcare costs per child per year. That works out to as much as £1,200 per child per year. This scheme was designed to replace the current system of Employer Supported Childcare (ESC). 

- The government plans to introduce a single-tier State Pension in 2016-2017. This will end the State Second Pension, which means that everyone will pay the same rate of NICs and build up access to the same single-tier State Pension.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.