Q: Budget 2013 – how does it affect you?
A: The chancellor George Osborne has now delivered his March 2013 budget, so what will it mean for you?
Fuel duty – As expected, the planned 3p per litre increase in fuel duty for this September has been scrapped, meaning motorists can breathe a little easier.
Personal tax – The chancellor has agreed that the personal tax allowance (the amount you can earn before being taxed) will be raised to £10,000 from April 2014, a year earlier than previously promised. This will leave workers £700 a year better off. The personal allowance currently stands at £8,105 for those under 65, and will rise to £9,440 for the 2013/14 tax year.
Alcohol and cigarettes – If you’re beer drinker, then you’re in luck as the planned 3p rise in beer duty has been scrapped and replaced by a 1p cut in duty on a pint of beer. However, wine will go up by around 15p a bottle and cigarettes will go up by 26p per packet as previously planned.
Business – In order to help kick-start the economy, corporation tax will be cut by 1 per cent to 20 per cent in 2015 and a new Employment Allowance will take the first £2,000 off the employer National Insurance bill of every company in the country to encourage hiring new staff. However, the government will be bringing in a large package of new measures to crack down on large companies avoiding tax, which is hoped will bring in an extra £3 billion.
Mortgages – If, like hundreds of thousands of others, you’re not able to buy your own home due to lenders’ high deposit requirements, you might be in luck. The chancellor has today announced details of a new mortgage guarantee scheme, which will help first-time buyers and families to get help with deposits on any home up to £600,000.
Childcare – From Autumn 2015, parents with children under 12 will receive a 20 per cent tax rebate on childcare costs amounting to up to £1,200 per child. The £1 billion tax-free childcare scheme will be open to all children under five from Autumn 2015, benefitting 1.3 million families, but will build up over time to include children under 12, helping 2.5 million families and can potentially save working parents more than the current childcare voucher scheme.
Public sector pay caps – The capping of public sector pay rises to 1 per cent has been extended by one year in 2015/16. The military, however, will be exempt from these changes.
Pensions and social care – As previously announced, the new flat rate pension worth £144 a week will be brought forward to 2016. And the cap on the amount the elderly pay for social care in England, originally planned to be introduced in 2017 at £75,000, will now also be introduced at a level of £72,000, with the threshold for means tested help raised from £23,000 to £118,000.
Andrea Ventress, Money Expert
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