Commenting on today’s Budget, Karen Barrett, founder and CEO of Unbiased, said: “We were warned that this would not be a ‘giveaway’ Budget, meaning that all spending announcements are being balanced by cuts or tax increases elsewhere. Nevertheless, the Chancellor is keen to stimulate the economy pre-Brexit and ease the potential impact on small businesses and individuals alike.
On tax and National Insurance announcements:
“Our tax-free personal allowances are rising for the seventh year in a row to £11,500, while the higher-rate tax threshold is rising by even more, from £43,000 to £45,000. This is a measure clearly aimed at what has been described as the ‘squeezed middle’ class of earners. But there’s also good news for lower earners, as the national Living Wage will rise to £7.50 an hour.
“But the news is not so good if you’re self-employed. The main rate of Class 4 National Insurance contributions for self-employed people will increase from 1 per cent to 10 per cent in April 2018, then to 11 per cent in April 2019 – though admittedly the average cost for those affected will be just 60p a week!
“There will, however, also be a reduction in the tax-free dividend allowance for shareholders, from £5,000 to £2,000 from April 2018 – another change that could affect many business owners.
On the announcement on business rates
“It is good that the Chancellor has listened to the concerns of small businesses regarding the increases in business rates. He announced £435m set aside for firms affected by these increases, including a £300m ‘hardship fund’ for those worst affected, and a pledge that any business losing the existing relief would not see an increase of more than £50 per month. Furthermore, pubs with a rateable value of less than £100,000 will receive a £1,000 discount on their rates. Despite these measures, small businesses would be wise to take financial advice on their future cash flows now ‘while the sun is shining’, as such measures are unlikely to be permanent ones.
“The Chancellor confirmed that the ISA tax-free allowance will rise in April to £20,000, covering both cash and stocks & shares ISAs. Although cash ISAs are considered less good value now, due both to low interest rates and the personal savings allowance, the rise is good news for more adventurous savers and investors who wish to shelter higher-risk assets such as equities.
“Some more crumbs of comfort for savers came with the confirmation of the new NS&I bond, available from April, which will pay 2.2 per cent on deposits of up to £3,000.
On the ‘returnships’ announcement:
“Few will have missed the small but significant measure Philip Hammond announced, apparently in honour of International Women’s Day. He has set aside funding of £5m to promote ‘returnships’ in the public and private sectors, to help people back into employment after a career break (who in the majority of such cases are women). This was a timely reminder of the issues many women face when they take a career break – not just a loss of immediate earnings, but of NI payments and private pension savings too. A career break can lead to a major shortfall in one’s pension savings, so anyone in this position should seriously consider taking financial advice to help mitigate the long-term effects.
“The overall message of Philip Hammond’s Budget was one of ‘optimistic caution’. We saw a Chancellor planning for uncertain times, and this is a good example to follow. Individuals who seek financial advice now will be better prepared for whatever the coming few years may bring. Both individuals and businesses can search for independent financial and legal professionals at unbiased.co.uk.’
For more information contact:
Frederica Saunders, Lansons: 020 7294 3620
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