A summary of the key business tax announcements made in the Chancellor’s Budget on 21st March 2013

A summary of the key business tax announcements made in the Chancellor’s Budget on 21st March 2013

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Budget 2013 analysis


This summary of the key business tax announcements made in the Chancellor’s Budget on 21st March 2013 has been put together by the LexisPSL Tax team, to provide a single source for all key business tax announcements. Alongside these announcements, the team provide analysis of what this means to your practice and your clients, and provide links to relevant external sources (including the HMRC website), and further practical guidance in LexisPSL Tax.

After taking the brave step of joining twitter earlier in the day, the Chancellor of the Exchequer, George Osborne (@George_Osborne), delivered his fourth Budget on Wednesday 20 March 2013.

The economic climate facing the Chancellor continues to be challenging.


  • three years of austerity
  • cutting the UK’s level of borrowing by a little over one quarter (from approximately £167bn in 2009-10 to £121bn in 2012-13 and 2013-14)
  • a general consensus that the economy is showing some signs of recovery, and
  • growing confidence for the medium and longer term

the economy is showing little, if any, signs of growth. The result is that the overall deficit is actually widely expected to remain at its current level (or even rise) in 2012-13 meaning that predictions on the time it will take to clear now stretch into the next Parliament (ie post-2015).

Add to this the loss of the UK’s Moody’s ‘AAA’ credit rating in late February, Mr Osborne has been facing intense pressure to (among other things):

  • move away from his austerity programme
  • abandon cuts in the welfare budget
  • temporarily cut the rate of VAT, and
  • borrow more money

all in order to kick-start economic growth—in short, he has been urged to adopt a ‘Plan B’.

Nonetheless, the Chancellor appears determined to stay the course he has set for himself. He has resisted the temptation to borrow more and continues to focus on reducing existing budgets. For example, in a measure expected to raise approximately £3bn per year from 2015-16, he is seeking additional cuts in governmental department budgets (other than the NHS and, interestingly, HM Revenue and Customs (HMRC)) in each of the next two years prior to the 2015 general election.

The money saved is set to be reinvested in large-scale infrastructure projects (including, for example, the HS2 high-speed rail link) in an effort to stimulate the economy—not quite Plan B perhaps, but maybe Plan A1.

Set against the economic challenges the government faces, the UK’s tax system (and, indeed the international tax system as a whole) continues to find itself under sharp scrutiny.

In what follows, references to:

  • OOTLAR means the Budget document called the Overview of Tax Legislation and Rates published on 20 March 2013
  • FB 2013 means Finance Bill 2013, and
  • TIIN means Tax Information and Impact Notes (which can be found in Annex A to the OOTLAR)


Our analysis falls under the following headings:

  • Business and enterprise
  • Real estate taxes
  • Investment management
  • Personal taxation
  • Employment taxes
  • Indirect taxes, and
  • Tax avoidance and evasion

Download the full report here [PDF]

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