Budget 2013: why there will be no tax breaks for married couples and the self-employed

Friday 15 March 2013

Fraser Campbell, partner at Campbell Dallas LLP, considers what tax measures the Chancellor is expected to focus upon in the Budget on 20 March, and what we already know is in the Finance Bill 2013.

Fraser Campbell

Business

Following the cut to 21% in the headline corporation tax rate which is to apply from 2014 it may be that we will see a complete reduction of the headline rate to 20%. The Chancellor has previously stated that it is an aspiration to achieve such a rate so as to position the UK as a low tax environment on the international stage.

Despite the continued media interest and focus on the taxation of international groups this is an area where there is a danger that by acting unilaterally the UK may become a less competitive jurisdiction. This area is probably better dealt with by way of international corporation rather than, for example, introducing something such as an alternative minimum tax for offshore entities. Anti Avoidance As ever, Anti Avoidance measures are likely to be introduced to tackle newly drafted avoidance arrangements. We already have the draft general anti-abuse rule (GAAR) which takes effect later this year and this may mean that there is a reduction in the number of specifically targeted measures that are required. That said, expect heavy reference to measures intended to clamp down on tax avoidance or abuse. Employment Taxes There have been calls for cuts to employer National Insurance costs to assist small business in difficult economic times. Such cuts are unlikely and in fact an increase in National Insurance for the self employed could potentially be brought into force. Historically lower National Insurance rates were applicable to the self employed on the basis that they had a lower entitlement to State Pension. On the introduction of the flat rate state pension the self employed would now receive the same as an employed person and therefore an equalisation of National Insurance costs may be expected. Personal Tax The coalition Government's stated aim of a £10,000 personal allowance could result in an announcement that sees a final increase to that amount coming in to effect from 2014/15. Proposals to provide a tax break for married couples however appear to have been shelved altogether. Draft proposals in relation to the changing of income tax reliefs to the greater of £50,000 or 25% of total income may be slightly relaxed in the budget announcement to address concerns that full relief should be available for genuine business losses. Budget 2013 Briefing for business leaders

Contextual targeting label:

Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Budget 2013: why there will be no tax breaks for married couples and the self-employed

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED