This week, George Osborne revealed the 2014 Budget. As always, the announcement was met with a flurry of opinions, with the media dubbing it the ‘sun reader’s budget’. David-James Marker highlights some of the key changes made, and the impact they will have in the future.
The 2014 Budget is one for growth.
George Osborne held the red case for us all, the media and the watching world for the 4th time since assuming his position as chancellor in 2010. Chancellor bashing tweets on budget day have become just as much a tradition as the waving of the red case, but as always, it is what happens during and after the presentation of the budget that matters most.
A Sun Reader’s Budget
This year’s budget has been dubbed the ‘sun reader’s’ budget with the reduction in tax on beer and bingo; the aim, consumer spend lifting us out of this recession. One cant help but wonder are these just the headline grabbers being that we are in the build-up to next year’s election?
There are plenty of more meaningful moves that will capture the thoughts of all those affected.
A Maker’s Budget
The government is true to it’s origins, aiming to stimulate growth, jobs, and investment through several changes in the allowances for corporates. Interesting changes include the doubling of the annual allowance for investment in plant and equipment from £250,000 to £500,000, but we are yet to see George follow through on his commitment to reduce rates of corporation tax.
A Doer’s Budget
Commitment to increase the personal allowance has, as always, been provided to reduce the pressure on low earners enabling them to benefit from their efforts to work. This year is no exception with the increase to £10,500, achieving a saving of £800 for the average tax payer. However, it is likely the middle earners have been left with a smaller benefit with the higher band jumping only £415.
Elsewhere, working families will benefit from tax free childcare from next year, with the government paying 20% of the costs – a Liberal Democrats policy delivered by the Conservatives?
A Saver’s Budget
Savers do well. The controversial policy inside the party was that of the pensions policy; the decision to allow pensioners to cash in their pensions and take control of how they spend the money that has been invested over the years. One of the large professional service firms said this morning that this could lead to a large uplift in spending in the pension generation, which could lead to business opportunities to cash in on the newly available disposable income. The chancellor has defended his decision claiming that it is their money, annuities have not been returning, and people should be trusted to spend what they have earned.
Other savers have benefitted with the a reduction in the 10p tax on savings, as well as the changes to the ISA rules and limits.
A Budget for growth
What matters is that the 2014 budget is one for growth. It was started with a smiling face announcing we are in a very different place to where we were 12 months ago. We are growing, albeit with a long way to go.
The budget breakfast I attended this morning focused on economic growth, business growth and the need for the right people within organisations to achieve this. The market for great people is picking up and firms are trying to attract the best. It is therefore essential to create the opportunities for your great people internally or another firm will be able too.
It is a budget for growth and overall we are excited by the outlook from it.
– David-James Marker