With the General Election a less than 40 days away now and the main party leaders Cameron and Miliband having already completed the first televised discussion, Chancellor George Osborne’s Budget has been very much part of Stage 1 of the campaign.
Osborne’s 6th Budget speech revealed a raft of crowd-pleasing measures and now the hyperbole and headlines have died down a bit, the Acumen team has taken the opportunity to take a cool look at some of the key points likely to affect you and your business looking ahead.
Support for careful savers.
Careful savers are being rewarded with further increases in the personal tax allowance, new measures to make ISAs more flexible, and the introduction of a new Personal Savings Allowance for basic and higher rate tax payers.
Annual tax returns are scrapped.
A rather surprising – but extremely welcome – development for SME business owners has been the announcement that the dreaded annual January tax return will be scrapped in favour of a new digital version. It could be that this will usher in a new era of greater clarity and flexibility.
Not so grim up north!
Northern businesses have been given a welcome shot in the arm, with the Chancellor’s announcement that he was “ready to commit new money, new infrastructure, new transport and new science” to support the region with annual investment to the tune of £7bn. He also called Greater Manchester’s plan to introduce an elected mayor “the most exciting development in civic leadership” for a generation. The Northern Powerhouse is gathering pace and substance and we are delighted that at last the Westminster telescope is being focused beyond Birmingham.
Pension funds and Lifetime Allowance limits in the spotlight again.
The good news we’ve welcomed for pensions saving and unlocked annuities was slightly dampened when it was announced that the Lifetime Allowance is to be cut again, this time to £1M. Admittedly it still sounds like a generous level and Mr Osborne is adding in some index linking so it will gradually increase. Many people will feel that it is beyond their reach for example many company owners and the self employed may have spent years building up their business with little or no pension savings so for them it is the annual contribution limit, now set at £40,000, that represents the greater problem. Whatever the position, there’s more reason than ever to get specialised, independent advice as soon as possible.