Happy Budget Day! Well happy for some anyway.
Today Cowgill Holloways invited a number of financial professionals and business owners to attend a live Budget 2016 event at AJ Bell Stadium, with a panel discussion afterwards.
A lot of pre-budget predictions came true, such as the transition of the school system as it stands into what some would suggest is a more privatised system.
The talk pre speech was about how often George Osborne might laud his “Long Term Economic Plan” and true to form this was indeed mentioned several times. I lost count after 10 but let’s just say the term “Long Term” was a key feature of the speech.
Being the finance manager of recruitment agency Forward Role, I was obviously incredibly interested in some of the Chancellors early employment related comments, such as;
· there being over 150,000 more jobs than OBR anticipated
· lowest amount of people claiming out of work benefits since November 1974
· employment growing at the fastest rate in the North West
Which is great news for the job market and the North West in particular!
It also looks like good news for employees with the personal tax allowance increasing to £11,500, meaning you will only be taxed on anything over that amount. This will really make a difference for lower income employees and high income employees were also looked after with the higher tax threshold increased to £45,000.
SME’s are also set to benefit, with stamp duty reductions on commercial property and business rates reducing, with relief increasing from a rateable value of £6,000 to £15,000.
The Chancellor noted how businesses such as Amazon and Ebay have had a positive impact on the UK economy by helping small businesses digitalise and reach a wider market, however he also vowed to remove the unfair advantages that foreign multinational businesses with warehouses in the UK benefit from being able to distribute from, whilst not paying UK VAT. The tackling of this will be a key focus, along with a general crackdown on large organisations avoiding tax and tax evasion. Osborne announced that they plan to raise £12 billion by 2020 through this embargo.
Other things that are of note are the sugar levy which will be put on those companies make sugary drinks and will raise £520 million. Also a further cut to corporation tax to 17% by 2020, which was a surprise to most as this had not seemed to be an issue after it recently reduced.
Something that I felt was particularly interesting was the Lifetime ISA where by those under 40 years old can open an ISA and put up to £4,000 a year, with an annual bonus of up to £1,000 paid until the age of 50. With it becoming increasingly obvious that by the time I am ready to retire, there won’t be a state pension to rely on having an ISA named after me (LISA) was an unexpected bonus!
All in all a fairly positive budget, although I will now be buying multi-multipacks of Coke for the Forward Role fridge to keep us going ahead of the expected price increase!