Budget 2016: Can Britain Face The Challenges Ahead?
Mr Osborne certainly seems to think so ...
It is all well and good that Mr Osborne thinks we are in a strong position to face the future, but according to the Office for National Statistics, the average UK taxpayer would have to work for two and half years and give all of their income to the taxman to pay off the nation's debt ...
Will Budget 2016 help Britain to face the challenges ahead?
copyright: speedo101 / 123rf stock photo (licensee)
We all know about tax freedom day in May each year. The average worker pays 21 out of their 52 weeks' worth of income to the taxman and this statistic is in a similar vein.
"Frightening isn't it? But what can you do?"
Well, if you run a business, the onus is on you to create a better business for yourself, your family, your employees and your community.
If you would like help in doing that then we stand ready and willing with our '2016 Business Builder' initiative to help our region's businesses generate the growth and prosperity the country needs in order to make paying all those extra taxes easier and less painful. Using leading-edge software, systems and thinking, it will help local businesses discover new ways to create more jobs, profits and wealth.
As to what Mr Osborne said, well (yawn), having read through all of the 148 pages that is the budget summary, there is a lot of tinkering around the edges. Equally, no doubt, a lot of detail that we have yet to see and, of course, there will be the usual devil in the detail. But a quick canter through the changes reveals a lot.
Things that change from April 2016:
Personal allowances to be £11,000 and the 40% tax band to start at £43,000.
Tobacco duty up by 2%, beer, cider and whisky frozen, but other spirits and wines go up a bit.
Fuel Duty is frozen again (hurrah! Mind you, 75% of what we already pay for fuel is tax!).
Capital Gains Tax to be reduced from 18% to 10% or 28% to 20%, except for residential houses.
A £1,000 allowance for micro-entrepreneurs from property income and trading income.
A £1,000 personal savings allowance (£500 for 40% taxpayers and £nil for 45% taxpayers).
Small business rate relief increased from £6,000 to £15,000.
Changes to tax relief for offshore property companies.
VAT threshold increased to £83,000.
New minimum wage for 25year old and older of £7.20/hr.
Things that change from April 2017:
End of using of personal service companies for government jobs (which will be awkward to enforce).
Lifetime ISA with government contributions to help you save.
Corporation Tax loss relief.
Things that change in 2018, 2019 or 2020:
And, of course, lots of anti-avoidance plans to tax people in the hidden economy or tax multi-national companies. There is even a proposal to move all civil servants out of Whitehall and into the London suburbs!
"But remember, it's not how much tax you pay, but what you get to keep that is important!"
If the thought of making more profit and keeping more in your pocket resonates with you, then do call me at JVCA on 0333 335 0422 or click here to send me an email enquiry and let's arrange a meeting to see how I can help you.
Until next time ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.