The 2013 United Kingdom budget was delivered by

George Osborne George Gideon Oliver Osborne (born Gideon Oliver Osborne; 23 May 1971) is a former British politician and newspaper editor who served as Chancellor of the Exchequer from 2010 to 2016 and as First Secretary of State from 2015 to 2016 in the ...

, the Chancellor of the Exchequer, to the

House of Commons The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. T ...

on Wednesday 20 March 2013. It was the fourth budget of the Conservative-Liberal Democrat coalition government that was formed after the 2010 general election, and also the fourth to be delivered by Osborne. Its key points included an increase in the

personal allowance In the UK tax system, personal allowance is the threshold above which income tax is levied on an individual's income. A person who receives less than their own personal allowance in taxable income (such as earnings and some benefits) in a give ...

, a reduction of the rate of

corporation tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...

, a freeze of the rate of fuel duty, and the cancellation of the duty escalator on beer.

Key measures

Taxes and revenue

The

each UK employee is entitled to earn before

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

is levied was increased for the third consecutive budget, to £10,000, from 2014. The increase had been planned to become effective in 2015 but was brought forward one year. Before the 2012 budget, the rate of

in the UK was 26%. In his 2013 budget, Osborne announced another reduction in the rate in 2015 to 20%. The reductions would be offset by the bank levy. New employment allowances will cut

National Insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their fami ...

bills for all UK firms, and 450,000 small businesses should pay no employer NI. Tax reliefs were also announced for investment in social enterprises, and Osborne axed a stamp duty on shares traded on growth markets such as the

Alternative Investment Market AIM (formerly the Alternative Investment Market) is a sub-market of the London Stock Exchange that was launched on 19 June 1995 as a replacement to the previous Unlisted Securities Market (USM) that had been in operation since 1980. It allows ...

. Osborne cancelled an increase in fuel duty that had been planned for September 2013, and also cancelled a 3p increase in duty on beer planned for April 2013, instead cutting the beer duty by 1p from 24 March 2013. The duty escalator on beer was also cancelled, but remains in place for wine, spirits and cider. Duties on cigarettes were unchanged. Tax incentives were announced for ultra low- emission vehicles and for investment in

shale gas Shale gas is an unconventional natural gas that is found trapped within shale formations. Since the 1990s a combination of horizontal drilling and hydraulic fracturing has made large volumes of shale gas more economical to produce, and some ...

. The

Staffordshire Potteries The Staffordshire Potteries is the industrial area encompassing the six towns Burslem, Fenton, Hanley, Longton, Stoke and Tunstall, which is now the city of Stoke-on-Trent in Staffordshire, England. North Staffordshire became a centre of ...

industry will be exempt from the

Climate Change Levy The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom. Scope and purpose Introduced on 1 April 2001 under the Finance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes ...

Taxes

Benefits and expenditure

An additional £15 billion of investment was announced for infrastructure such as roads, railways, power stations, and major construction projects by 2020. Cuts of around 1% were announced to many government departments' budgets, except the

Department for Health A health department or health ministry is a part of government which focuses on issues related to the general health of the citizenry. Subnational entities, such as states, counties and cities, often also operate a health department of their o ...

and

Department for Education The Department for Education (DfE) is a department of His Majesty's Government responsible for child protection, child services, education (compulsory, further and higher education), apprenticeships and wider skills in England. A Department ...

. The income from fines arising out of the Libor scandal shall be given to soldiers' charities. Military wages would also be exempt from limits on progression pay rises imposed on the

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, inf ...

Spending

Economy

Osborne stated that the

Office for Budget Responsibility The Office for Budget Responsibility (OBR) is a non-departmental public body funded by the UK Treasury, that the UK government established to provide independent economic forecasts and independent analysis of the public finances. It was formally ...

(OBR) predicted that the UK would not enter recession again in 2013. The OBR cut its forecast for economic growth in 2013 to 0.6% from 1.2%. It forecast growth to be 1.8% in 2014, 2.3% in 2015, 2.7% in 2016, and 2.8% in 2017. The OBR predicted government borrowing of £121 billion in 2013 and £120 billion for 2014.

Government debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...

as a share of

gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...

was forecast to increase from 75.9% in 2013 to 85.6% in 2016. The majority of the other business tax changes announced impact small businesses, now receiving the benefits of the National Insurance Contribution. SMEs will also benefit from a certain number of reliefs such as

capital gains Capital gain is an economic concept defined as the profit earned on the sale of an asset which has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares ...

relief on Seed Enterprise Investment Schemes and stamp duty relief from trading AIM-listed shares, which will help them raise capital. As for larger companies, the advantages of the new budget and incentives will be focused on Research and Development.

Public procurement

The budget announced the government's intention to use the procurement process to promote suppliers' tax compliance.Cabinet Office
Procurement policy note 06/13: promoting tax compliance
published 25 July 2013, retrieved 31 January 2022

References

External links

2013 Budget coverage
at the BBC
2013 Budget coverage
at ''The Guardian''
2013 Budget coverage
at ''The Telegraph'' {{United Kingdom budget

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

Budget

2013 File:2013 Events Collage V2.png, From left, clockwise: Edward Snowden becomes internationally famous for leaking classified NSA wiretapping information; Typhoon Haiyan kills over 6,000 in the Philippines and Southeast Asia; The Dhaka garment fa ...

budget George Osborne