Budget 2013 – Annual Tax Rates and Allowances

A look at some of the key business announcements for 2013's budget

Budget 2013 – Annual Tax Rates and Allowances

On 20 March the Chancellor announced his Budget for the coming year. The key announcements covered:

  • A reduction in the corporation tax rate to 20% from April 2015
  • A £2,000 employment allowance from April 2014
  • A new capital gains tax relief on the sale of a controlling interest in a business from 2014
  • Income tax and National Insurance relief on shares for employee shareholders from 1 September 2013
  • An increase in the new above the line research and development tax credit to 10% from 1 April 2013
  • The removal of Stamp Duty on shares traded in growth markets such as AIM and ISDX Growth Market from April 2014

NOTE: The figures contained in this article are subject to amendment as the Finance Bills pass through Parliament. This article is a guide only and advice should be taken before acting on its contents.

Income Tax Rates

Rate (%) 2013/2014 (£) 2012/2013 (£)
1012 1-2,790 1-2,710
203 1-32,010 1-34,370
404 32,011-150,000 34,371-150,000
45/505 over 150,000 over 150,000
  • Savings income (excluding dividends) is taxed at 10% within the savings rate band.
  • Rate applicable to discretionary and accumulation and maintenance trusts for 2013/14 is 45% (50% for 2012/13) above standard rate band of £1,000; within the standard rate band the tax rate is 10% or 20% depending on nature of income.
  • See also Taxation of Dividends.

1 Only available to extent taxable non-savings income is less than savings rate band
2 Savings rate band
3 Basic rate band
4 Higher rate band
5 Additional rate band

Personal Allowances

2013/2014 (£) 2012/2013 (£)
Personal1
Born after 5 April 1948 9,440 n/a
Age under 65 n/a 8,105
Born after 5 April 1938 but before 6 April 1948 10,500 n/a
Age 65-74 n/a 10,500
Born before 6 April 1938 10,660 n/a
Age 75 and over n/a 10,660
Married couples2345
7,915
7,705
Blind person’s 6 2,160 2,100

1Age related personal allowances reduced by £1 for every £2 of income above the limit of £26,100 (£25,400 2012/13) until the basic personal allowance of £9,440 (£8,105 2012/13) is reached. Basic personal allowance reduced by £1 for every £2 of income over £100,000 until completely removed.
2 Relief is restricted to 10%.
3 Part or the full amount of the allowance may be transferred to the spouse (wife for marriages pre 5 December 2005) or civil partner.
4 Available where at least one of the parties was born pre 6 April 1935.
5 Married couples’ allowance reduced by £1 for every £2 income in excess of £26,100 (£25,400 2012/13) until minimum allowance of £3,040 (£2,960 2012/2013) is reached.
6 Any surplus can be transferred to the spouse or civil partner.

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