Budget 2013

The budget day letter from HMRC for the financial services sector is here.

https://docs.google.com/file/d/0B2l-XIOPFJ-2cFJwN1d0T1lORUE/edit?usp=sharing

Trying to get a top down feel for what was going on I found this table quite useful.

http://www.hm-treasury.gov.uk/budget2013_policy_decisions.htm

As it shows there are sixty five separate measures but few if any with large impacts on revenues or spending.  It’s also interesting to note that from 2014 - 2015 the government is hoping to raise a billion pounds a year from anti avoidance measures and the pressure will be on HMRC to deliver the expected savings.

For life assurance companies the most significant move is the introduction of a twenty per cent tax rate from 1 April 2015 is welcome.  For companies with accounting periods ending on 31 December corporation tax rates will be as follows for 2013  - 2016.

 https://docs.google.com/file/d/0B2l-XIOPFJ-2c2tfR0tsVk1ibGM/edit?usp=sharing

 As per the HMRC press release legislation will be introduced in Finance Bill 2013 both for the 21% rate applying from 1 April 2014 and the 20% rate applying from 1 April 2015.  Accordingly when the Finance Bill receives its 3rd reading in the House of Commons the rate changes will have been substantively enacted and applicable for deferred tax calculations for periods ending after that date.

In 2012 the Finance Bill received its 3rd reading in the House of Commons on the 3rd July so it is not clear whether the reduced rates will be used in deferred tax calculations for the six months ended 30 June 2013.

For accounting periods ended 31 December 2016 onwards the rate of tax on both the shareholder and policyholder share of I-E profits will be 20%, assuming of course that income tax rates remain unchanged.