| Budget 2013 | |
|---|---|
_(St_Edwards_Crown).svg) | |
| Presented | Wednesday 20 March 2013 |
| Parliament | 55th |
| Party | Coalition government |
| Chancellor | George Osborne |
| Total revenue | £612 billion ($930 billion) (39% of 2012 GDP) |
| Total expenditures | £720 billion ($1.1 trillion) (45% of 2012 GDP) |
| Deficit | £108 billion (6% of 2012 GDP) |
| Website | Budget 2013 documents |
‹ 2012 2014› | |
The2013 United Kingdom budget was delivered byGeorge Osborne, theChancellor of the Exchequer, to theHouse of Commons on Wednesday 20 March 2013.[1]
It was the fourthbudget of theConservative-Liberal Democrat coalition government that was formed after the2010 general election, and also the fourth to be delivered by Osborne.
Its key points included an increase in thepersonal allowance, a reduction of the rate ofcorporation tax, a freeze of the rate offuel duty, and the cancellation of the duty escalator on beer.[2]
Thepersonal allowance each UK employee is entitled to earn beforeincome tax is levied was increased for the third consecutive budget, to £10,000, from 2014. The increase had been planned to become effective in 2015 but was brought forward one year.
Before the 2012 budget, the rate ofcorporation tax in the UK was 26%. In his 2013 budget, Osborne announced another reduction in the rate in 2015 to 20%. The reductions would be offset by the bank levy.
New employment allowances will cutNational Insurance bills for all UK firms, and 450,000 small businesses should pay no employer NI. Tax reliefs were also announced for investment in social enterprises, and Osborne axed astamp duty on shares traded on growth markets such as theAlternative Investment Market.[3]
Osborne cancelled an increase infuel duty that had been planned for September 2013,[4] and also cancelled a 3p increase in duty on beer planned for April 2013, instead cutting the beer duty by 1p from 24 March 2013. The duty escalator on beer was also cancelled, but remains in place for wine, spirits and cider.[5] Duties on cigarettes were unchanged.
Tax incentives were announced for ultra low-emission vehicles and for investment inshale gas.
TheStaffordshire Potteries industry will be exempt from theClimate Change Levy.
| Receipts | 2013-14 Revenues (£bn) |
|---|---|
| Income Tax | 155 |
| National Insurance | 107 |
| Value Added Tax (VAT) | 103 |
| Corporate Tax | 39 |
| Excise duties | 47 |
| Council Tax | 27 |
| Business rates | 27 |
| Other | 107 |
| Total Government revenue | 612 |
An additional £15 billion of investment was announced for infrastructure such as roads, railways, power stations, and major construction projects by 2020.[6]
Cuts of around 1% were announced to many government departments' budgets, except theDepartment for Health andDepartment for Education.
The income from fines arising out of theLibor scandal shall be given to soldiers' charities. Military wages would also be exempt from limits on progression pay rises imposed on thepublic sector.
| Department | 2013-14 Expenditure (£bn) |
|---|---|
| Social protection | 220 |
| Health | 137 |
| Education | 97 |
| Debt interest | 51 |
| Defence | 40 |
| Public order and safety | 31 |
| Personal social services | 31 |
| Housing and Environment | 23 |
| Transport | 21 |
| Industry, agriculture and employment | 16 |
| Other | 53 |
| Total Government spending | 720 |
Osborne stated that theOffice for Budget Responsibility (OBR) predicted that the UK would not enter recession again in 2013. The OBR cut its forecast for economic growth in 2013 to 0.6% from 1.2%. It forecast growth to be 1.8% in 2014, 2.3% in 2015, 2.7% in 2016, and 2.8% in 2017.
The OBR predicted government borrowing of £121 billion in 2013 and £120 billion for 2014.Government debt as a share ofgross domestic product was forecast to increase from 75.9% in 2013 to 85.6% in 2016.[7]
The majority of the other business tax changes announced impact small businesses, now receiving the benefits of the National Insurance Contribution.SMEs will also benefit from a certain number of reliefs such ascapital gains relief on Seed Enterprise Investment Schemes andstamp duty relief from trading AIM-listed shares, which will help them raise capital. As for larger companies, the advantages of the new budget and incentives will be focused onResearch and Development.[8]
The budget announced the government's intention to use theprocurement process to promote suppliers'tax compliance.[9]
