How will the budget affect you in 2014
PUBLISHED: 10:14 25 March 2014 | UPDATED: 10:14 25 March 2014
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Over 100 leading local business people watched the 2014 Budget and gave their feedback at Randall & Payne's Annual Budget event hosted at Gloucester Rugby Club.
Tim Watkins, Tax Partner at Randall & Payne said: “‘We weren’t expecting a great deal but the Budget turned out to be, whilst not a ‘give-away’ Budget, a Budget to help confidence for both businesses and individuals. We haven’t got the detail yet but there was some good news for businesses looking to invest, there was encouragement for companies exporting and good news for individuals with increases in personal tax allowances, widening of the basic rate band and freezing a range of duties.”
For individuals the main headlines were the raising of the personal tax allowance to £10,500 from 2015 and the rise in the threshold for 40p income tax, first to £41,865 from next month, then to £42,285 next year. The freeze on duty on cider and spirits and 1p per pint cut on beer duty will probably be welcomed by many.
Trish Clements, Private Client Tax Manager commented: “The budget was really positive for our private clients and will hopefully encourage individuals to spend their increased disposable income. This increased confidence should have a positive effect on the economy, both locally and nationally.”
For businesses, the increase in lending for exporters, together with the interest on that lending being cut by a third and an increase in the Annual Investment Allowance to £500,000 from April 2014 to the end of 2015 will be a help. For local manufacturers, the £7 billion package to cut their energy bills will also be welcome.
David Owen, the CEO of GFirst LEP, said: “Finance support for exporters is really good for businesses generally and particularly for those in Gloucestershire as potential to export here is very high. The £1000 reduction in business rates for some high street retailers was unexpected and is very positive for smaller businesses in the county’s towns and villages. The doubling of the investment allowance will hopefully get some of our manufacturing businesses investing and therefore growing.”
Savers and pensioners had some good news too with cash and shares ISAs being merged and the annual limit increased to £15000. There is also greater flexibility being introduced in respect of taking benefits from pension pots and an increase in the limits for taking the whole of a pension pot in one go under the trivial amounts rules to £30000. The greater flexibility and the removal of restrictions on pensioners access to their pension pots has raised discussion, but also some concerns.
John Moss, Chartered Financial Planner from IFS Cotswold Financial Planning thought that: “People being able to take responsibility for their own pensions is great. Bearing in mind that over the next five years every employee in the country will be enrolled in a pension scheme under the Auto Enrolment Regulations giving them more freedom in what they do with their retirement savings eventually makes it much more attractive. In the end this will benefit pension companies as well because pension saving will become less unpopular. At the moment most people do not understand the benefits of saving into a pension because of the complicated tax rules which have been introduced over 40 years to remove the risk of abuse, as things become simpler so the barriers to saving tax efficiently will be removed. Increasing the ISA allowance to £15,000 per year with freedom to choose whether its cash or investments will also encourage tax efficient savings.”
Immediately after the Budget speech, a survey of the business people present found that:
• 98% felt the Budget would help their business
• 100% thought the Budget supported economic growth
• 77% thought the Budget would make it easier to recruit new employees
• 88% thought the Budget was better than expected for them
• 98% were pleased with the proposed business tax changes
• 79% thought the Budget measures would improve access to finance for their business
• 93% thought the outlook for the economy would be better after this Budget.
In summing up, Tim Watkins said: “The comments made by individuals indicate that this is a Budget that has gone down well. If there’s anything coming out of this year’s Budget that you would like to talk about then please call us on 01242 776000, we’d be delighted to hear from you.”