Regulation and Rate Changes: April 2013

7th May 2013

Regulation and rate changes: April 2013

New business rules and regulations come into effect in April and October each year. Here is our brief summary of some of the changes that may affect you and your business from 2013.

Rates and allowances

Income tax – from April 6th

  • Additional rate reduced to 45% from 50%
  • Personal allowance for people born after 1948 increased to £9,440
  • Basic rate limit reduced to £32,010

VAT
T
axable turnover threshold, which requires a person to register for VAT, increased to £79,000 per annum.

Capital gains tax annual
Changes to the annual exemption limits:

  • For an individual: increased to £10,900
  • For settlements: increased to £5,450

Individual Savings Accounts (ISAs)
Changes to investment limits and maximum cash subscriptions:

  • Overall investment limit increased to £11,520
  • Including cash maximum of £5,760

Research and development (R&D)
A new ‘above the line’ credit – at 10% is introduced for large company R&D investment.

For further details read our factsheet.

Legislation and regulations

The red tape challenge is a Government initiative to reduce the regulatory burden on business and society in general.

Among the changes that came into force in April are:

  • The minimum 90-day consultation period for redundancies involving 100 or more employees is halved to 45 days
  • Simplified rules on how a company may buy back shares from its own employees are introduced, including for the purpose of employee share schemes
  • Simplified rules around the ways firms can use their assets to raise finance

Income tax
The new simpler income tax rules announced for small self-employed businesses or partnerships are in force for the 2013/14 tax year. As planned, the measure will allow small businesses to prepare accounts on ‘cash basis’ rather than on an ‘accruals basis’.

For 2013/14, there are still three main levels of personal allowance but availability depends upon an individual’s date of birth rather than on their age in the tax year.

Other areas to be included in the new rules include:

  • Life insurance - qualifying policies
  • Inheritance tax - spouses and civil partners domiciled overseas
  • National insurance contributions for ‘sleeping’ and inactive limited partners
  • Real time information (RTI)
  • Overseas workday relief

For further details read our factsheet.

We can help you understand how regulatory and legislative changes affect your business or personal finances and planning. Contact us to find out more.

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