Business Boost from Budget Briefings
The crowds were back in force at Thomson Cooper’s two Budget Briefing events on Friday 20th March to discover what George Osborne’s last Budget before the General Election in May meant for them. Partners Andrew Croxford and Alan Mitchell shared their initial analysis of the Budget and what planning points their guests could consider to boost their personal and business finances. They were of course careful not to cross the line into “aggressive tax planning” or tax avoidance!
The Chancellor claimed that Britain is now ‘Walking Tall’, but who did benefit from this Budget? There were much called for tax reductions for the oil and gas industry which it is hoped will help boost oil production in the North Sea and protect jobs in that sector. However, the banking sector again bore the brunt of tax rises with an increase in the Bank Levy and a tax deduction disallowed for miss-selling fines.
For smaller businesses, there was continuing help with the cost of being an employer as there will be no employer’s National Insurance payable for employees under 21 from April this year and for apprentices under 25 from April 2016. They will also benefit from the extension of the Small Business Relief for business rates until April 2016, with inflation-linked increases to business rates being capped at 2%.
Farmers should also benefit in the future, as the Chancellor announced the start of a consultation to look at implementing averaging farmer’s earnings over 5 years rather than just two as they have at the moment.
From an individual’s point of view, the one big announcement was the end to the tax return as we know it. Over the next parliament, digital tax accounts will be introduced for 5 million small businesses and 10 million individuals. These digital tax accounts that will be prepopulated with data from HMRC, and taxpayers will be able to view their tax affairs in real time, see how their tax is calculated and check how much tax they owe. It will be just like online banking according to the Chancellor.
This use of “big data” will be challenging to get right, as even minor errors will directly impact on individual taxpayers. As one of the key information sources will be the employers’ returns under Real Time Information (RTI), the efficiency and accuracy of RTI will become even more important. Whilst banks and building societies will not need to deduct 20% income tax on interest payments from April 2016, because of the implementation of the new personal saving allowance, information will still need to be provided to HMRC for inclusion in the individuals tax accounts. People can appoint an agent to manage their digital accounts, so the staff at Thomson Cooper don’t expect to be hanging up their tax calculators any time soon.
At the Briefings, Andrew and Alan covered these topics and also provided information on the changes to personal allowances, tax rates and bands, and the changes to pensions.
The firm, who expanded into Edinburgh last year, were delighted with their record attendance. Andrew Croxford said, “This is the first year we’ve run the Briefing in both Edinburgh and Dunfermline and we are delighted that around 200 guests supported the events. We also hosted a seminar on auto-enrolment on the same day so it was a great opportunity for all of our clients and business associates to meet up. The feedback we’ve had has been very positive.”
Thomson Cooper has produced two free publications that are free to download from their website www.thomsoncooper.com, a concise Budget Report and compact Tax Allowance Card.