One week on from the budget which plunged the Tories into civil war, it can be easy to forget that beneath the headlines Chancellor George Osborne’s announcement could have a real impact on your finances. Adam Hignett spoke to some of the professionals about what they make of the budget now they have had time to study the detail and how it will affect you and your business.
Managing Director at AV Trinity, Tunbridge Wells
It has been a while since we had a budget statement with so little substance; window dressing is probably the best description, and with the economic outlook as it is, there was always going to be little room for manoeuvre.
So who will be most affected? The elderly and others on low incomes will be hit by the 10% increase on car, house and pet insurance premiums.
The under 40’s could have their heads turned by the Lifetime ISA. The difference is the ‘bonus’ of 25% – but you have to retain it until aged 60 to benefit and is viewed by many as an alternative to pensions.
Capital Gains Tax for many categories has improved,Â particularly for those willing to invest in smaller companies, accepting the risks therein.
Not a lot was on the agenda, hence the somewhat odd schools announcement. But look at the detail and there are some points worthÂ investigating.
Tax Partner at RSM, Tunbridge Wells
LOOK AT THE DETAIL
The budget contained lots of good news for the party faithful. However, there were some important revenue raising announcements which weren’t immediately apparent that will affect individuals and businesses in Kent.
During his speech, the Chancellor talked about the positive impact of the introduction of the new commercial stamp duty regime.
Yes, the new system will mean a tax cut for small companies buying low cost properties but the charge will begin to bite for companies purchasing commercial properties costing more than around £1million.
Another big revenue raiser is the plan to tackle loans made by Employee Benefit Trusts – an attack on both historic andÂ new schemes used by employers to avoid tax. Essentially, the Chancellor’s message was ‘settle now, or expectÂ significant penalties onÂ all outstandingÂ loans’.
Partner at Robinson Jackson Estate Agents, Tonbridge
The Chancellor’s latest Budget didn’t contain many property shocks but ? rst-time buyers do have a new way to save for a deposit.
The Lifetime ISA will add £1 for every £4 saved by the ISA owner. Savers must be under 40, with a maximum of £4,000 allowed annually earning the saver a £1,000 cash bonus.
The Government’s contribution is designed to get first-time buyers to their deposit goal more quickly. Once they have found a property to buy, they can withdraw the cash to put down as a deposit. Any initiative designed to help first-timeÂ buyers is welcomed and we urge people to sign up when they are young to benefit from the maximum amountÂ of Government ‘top ups’.
Tax specialist at Perrys Chartered Accountants, Tunbridge Wells
The budget was good news for low and middle income taxpayers with the tax free personal allowance set to rise to £11,500 and the higher rate threshold to increase to £45,000 from April 2017.
Small businesses look to be the other big winners from the budget with the corporation tax rate set to fall to 17% by 1 April 2020 and an increase in the small business rate relief thresholds.
However, it did mean further bad news for landlords with the higher stamp duty land tax rates to go ahead as planned.
After consultation, the government have decidedÂ not to include an exemption from the higher rates for significant investorsÂ owning more than 15 properties.
Chartered Financial Planner at Panoramic Wealth Management
SAVE FOR THE FUTURE AND RENT A ROOM
All the 2016 pre-Budget rhetoric in the financial services world had been in respect of dramatic changes to pensions post 6th April 2016. The suggestions had included ceasing the 25% taxÂ free lump and an overall reduction ofÂ pension tax relief neither of whichÂ have materialised.
The 2016 budget will however be remembered for the sea change toÂ ISAs with an emphasis on assisting the next generation to save and plan for their future.
As well as the introducing the Lifetime ISA, the annual general ISA limit is being increased to £20,000 from 6th April 2017 up from £15,240.
However, the reduction now of the current rate of Pension Lifetime Allowance from £1,250,000 to £1,000,000 means many individuals will be they will pay a significantly higher level of tax when they retire than they would have expected.
Given current low Interest rates one area that people may be worth condensing is use of the Rent a Room Relief Scheme.
From 6th April 2016 the level of Rent a Room relief, allows tax-free income that can be received from renting out a room or rooms in an individual’s only or main residence of up to £7,500 per year.