The Government will strengthen obligations to ensure the correct income tax and NICs are paid byoffshore employment intermediaries.
Annual Investment Allowance (AIA)
As announced in Autumn Statement 2012, the Government willincrease the AIA limit from £25,000 to £250,000 for two years for all qualifying investments in plant andmachinery made on or after January 1, 2013.
Corporation tax deductions for employee share acquisitions
- Existing legislation has been amended to
clarify a company’s entitleme
nt to corporation tax deductions for accounting expenses in connection withshare options or awards granted to employees. This measure will take effect since March 20, 2013.
Changes to the Individual Tax Regime
Income tax rates
The basic and higher rates of income tax for 2013-14 will remain at their 2012-13levels. The additional rate of income tax will be reduced from 50% to 45% from 2013-14 (applicable toincome over £150,000).UK makes the first £10,000 of income free from income tax (a year ahead of schedule)
The personal allowance will be increased by £560 to £10,000 from April 2014.
The income tax personal allowance will increase by £1,335 to £9,440 in April 2013.
From April 2013, the basic rate limit will be £32,010. The National Insurance upper earnings/profits limitwill also be reduced to align it with the higher rate threshold. Thus, the effective tax rates will be
Income Tax rates and taxable bands
Personal Allowance £8,105 £9,440 £10.000Basic Rate: 20% £0 - £34,370 £0 - £32,010 £0 - £31,865Higher Rate: 40% £34,371
£150,000 £32,011 -£150,000 £31,865- £150,000Additional Rate: 50% Over £150,000 N/A N/A45% from April 6, 2013 N/A Over £150,000 Over £150,000The UK to introduce a new Tax-Free Childcare Scheme.
The Government will support working families with 20% of their childcare costs up to £1,200 per child peryear.
This new system will be phased in from autumn 2015.The Government will introduce a new employee shareholder status that will give staff a stake in their
firms’ future success and give firms greater choice about the contracts they can offer to individuals.
Employee shareholders will have different employee rights and shares worth a minimum of £2,000 in thefirm they work for.
The UK will exempt gains on up to £50,000 of shares acquired by employee shareholders from capitalgains tax.
The first £2,000 of share value that anyone receives under the new status will be free from income taxand NICs.