Scott Bentley, Winter Rule partner specialising in owner-managed business, had the following comments regarding the budget:
He said: “As widely predicted, the budget was pretty dull in terms of any new radical announcements to the major taxes. With a General Election on the horizon it was unlikely that the Government was going to take any of the more controversial steps that some feared, such as raising the main rate of Value Added Tax.
“Whilst the lack of a large number of tax increases is good news, the difficulty for me is advising my clients with any certainty based upon this budget due to the proximity of a General Election in five or six weeks time. If there is a change of Government it is quite likely that there would be a second finance bill in the summer, and that is the one that concerns me.
“This budget has to be looked at quite differently to others as it serves two purposes, the first being the usual one of the need for there to be a finance bill giving the government the authority to continue to collect taxes etc., but also as drawing the battle lines for how Labour will fight the General Election and how they have sought to differentiate themselves from the other parties as regards economic policy
“The increase to the 10% Capital Gains Tax lifetime allowance for qualifying business disposals is welcome, but does of course only benefit those capable of selling their businesses at the moment and indeed making gains on them rather than a loss. Availability of affordable bank finance remains an issue here and so the level of activity is low. I think that it is the issue of releasing more finance to business at affordable and sensible rates that needs focusing on, new funds form Lloyds and RBS are welcome but more funds are needed to help stimulate growth.
“The increase in the ISA limits was already known and the commitment to increase these in line with RPI will be useful to those with money to save who are currently getting little by way of return on funds invested in savings accounts.
“ The freezing of the IHT Nil rate band at £325,000 for the next four years is a move that will raise taxes but perhaps not cost the Government a great deal of votes with the General Election on the horizon.”
“As has become the norm in recent years we also have to make sure that we remember the other measures announced some time ago that go into force next tax year, such as the new top rate of tax of 50%, the restrictions to tax relief on pension contributions for high earners, and of course the reform of the rules covering the taxation of income from properties used as furnished holiday lets which will have great impact in the south west.”