Following the earlier blog on the more major changes in taxation announced in the 2013 Budget, the following (although including some taxation references) are essentially the other announcements made in the 2013 Budget.
Help for home buyers
Two schemes are available.
Help to buy: equity loan
This scheme will run for three years from 1 April 2013 and is proposed to provide £3.5bn of additional investment.
• The scheme will apply to new builds only
• All house buyers can apply – this scheme is not restricted to first-time buyers.
• Buyers will need a minimum deposit of 5%
• Government will lend up to 20% of the value of the property as an equity loan – this can be repaid at any time or when the property is sold. The loan is interest free for the first five years. In year six borrowers will have to pay a 1.75% annual fee which will increase annually by 1% above inflation
• The equity loan arrangement will only apply to home purchases of £600,000 or less.
Help to buy: mortgage guarantee
This scheme will run for three years from 1 January 2014. Buyers will need to secure a mortgage from a lender who should be encouraged to offer better access to low deposit mortgages by the Government guarantee.
• Guarantee will apply to new builds and existing homes
• A minimum 5% deposit will apply
• Available to existing homeowners and first-time buyers
• A maximum home purchase of £600,000 applies
New Childcare Scheme from Autumn 2015
A new Childcare Scheme will be introduced to support working families with their childcare costs and will replace the current salary sacrifice scheme. Unlike its predecessor, the new scheme will be available to the self-employed and those on a minimum wage. Also parents will be able to choose their own voucher provider, as the new system will not be administered by employers.
Claimants will fund 80% of their childcare costs up to £6,000 per child. The remaining 20% will be subsidised by Government. From the first year of operation all children under 5 will be eligible and the scheme will build over time to include children under 12.
The scheme will provide support for families where all parents are in work and not receiving support through the Childcare Element of Working Tax Credits/Universal Credit, or where one has an income over £150,000. Support will be provided through a childcare account redeemable at any registered childcare provider.
The new scheme offer will be phased in from Autumn 2015 as the current system of Employer Supported Childcare is phased out. The Government will shortly consult on the detail of delivery.
From 25 March 2013 duty rates on:
• low strength beer (below 2.8% alcohol by volume (abv)) will be reduced by 6%
• beer between 2.8% and 7.5% abv will be reduced by 2%, and,
• high strength beer (above 7.5% abv) will be reduced by 0.75% in total.
This will reduce the cost of an average strength beer by approximately 1p per pint
Beer duties will then increase by RPI inflation following Budget 2014.
Other alcohol duty increases
The duty rates for spirits, wine and made-wine, cider and perry will increase by 2% above the rate of inflation (based on RPI) with effect from 25 March 2013. This will add 2p to the price of a litre of cider, 10p to the price of a bottle of wine and 38p to the price of a bottle of spirits.
Legislation will be introduced in Finance Bill 2013 to increase the duty rates for all tobacco products by 2% above the rate of inflation (based on RPI) from 6pm on 20 March 2013. This will add 26p to the price of 20 cigarettes, 9p to the price of a pack of five small cigars, 26p to the price of a 25g pouch of hand-rolling tobacco, and 14p to the price of a 25g pouch of pipe tobacco.
Please contact us on 0845 177 5500 or at you local office for more details on all budget changes.