Osborne confirmed that the public sector will once again have pay restrictions to no more than 1% but it is good news for our armed services who will not feel this restriction and instead the government accepted the Armed Forces Pay Review recommendations. Not surprisingly the Chancellor has made some deals with tax advantageous countries to tackle further tax avoidance; naming and shaming with no safe havens! Tax advisors who help individuals and or businesses to find tax avoidance schemes will not escape he said!
Confirmation of the penalty regime in respect of real time information is also included in the Budget documentation.
The key areas affecting the payroll industry can be found below, but until then if you would like many hours of light, bed-time reading click here for the full suite of Budget papers.
Main Budget Summary
Employment Allowance for businesses
The government will introduce for all businesses and charities a £2000 allowance per year from April 2014. This will be offset against the employer National Insurance liability. It will be reclaimed via the payroll returns submitted via real time information.
CIPP comment: The government confirmed they intend to discuss how this will work and any implications for payroll with stakeholders after the budget announcement. The CIPP will of course be involved with this consultation work and will advise the profession on the changes required as soon as possible. This will of course have a major impact for payroll software developers and the RTI specifications!
Company Car Tax
Two new bands to be introduced in the 2013 Finance Bill, for emissions up to 75g effective from 6 April 2015.
The rate of fuel benefit charge for company cars, vans and the vans benefit charge will all increase in line with inflation (RPI) for 2014/15.
New Childcare Scheme from 2015
As reported by the CIPP on 19 March 2013, the Chancellor confirmed tax relief of up to £1200 per annum, per child in his Budget speech. HM Treasury has confirmed the CIPP will be involved in the consultation as to how this new scheme will work in practice.
Income Tax Personal Allowance
For those born after 5 April 1948, the Personal Allowance will increase to £10,000 from 2014. This increase has been brought forward by one year as it was originally expected to be in 2015. However the budget also states after this major increase in 2014, the allowance will then increase each year by the rate of inflation (CPI).
Also from April 2014 the basic rate threshold will be set at £31,865 and the higher rate will increase by 1 percent to £41,865.
CIPP Policy News Journal
12/04/2013, Page 149 of 362
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