What the budget means for real people

Whether you were spooked, peeved or nonchalent about our Chancellor's speech, I am guessing you are pretty bored of posts about taxation, the Government spending plans and the attack on businesses who rely on minimum wage workers, so I will try to keep this brief and relevant.

Employees:

Income tax and NIC remain unchanged. Those on minimum wage will see a substantial pay rise in April 2025. This increase in minimum wage combined with an increase in Employers' NIC could see businesses scaling back their recruitment plans, making finding entry-level or manual work more difficult to obtain.

Small business owners:

Not much change for those with few employees already earning more than the minimum wage. The increase in NIC from 13.8% to 15% should be offset by the increase in the Employment Allowance from ￡5,000 to ￡10,500.

Retail, hospitality and leisure businesses are likely to be impacted the most, but those with premises will get a 40% reduction in business rates. (I hope they're feeling grateful!)

Capital Gains Tax [CGT] will increase for those disposing of business assets, so your exit strategy may need revisiting, and higher potential inheritance tax [IHT] exposure needs to be planned for. To say farmers have been left reeling, is an understatement.

The Chancellor does not agree that double-cab pick-up trucks are commercial vehicles regardless of payload and plans to tax them as cars, creating a P11d charge and restricting capital allowances.

Surprisingly, Corporation Tax remains unchanged.

MtD for Income Tax is finally on its way. No change in tax or NIC for the self-employed.

Landlords:

Income Tax and Corporation Tax on rental profits, and CGT on disposals remain unchanged. The regime for Furnished Holiday Lets will end April 2025 as previously announced.

The big surprise, was the SDLT surcharge on additional properties will go from 3% to 5%.

Savers:

No changes for savings and dividend income, or ISA limits.

There were plenty of rumours of an attack on pension tax relief, but it didn't happen.

IHT thresholds were not increased, creating more fiscal drag.

CGT on certain assets are increasing and undrawn pension funds will now form part of your estate for IHT. So, speaking to your IFA and reviewing your will, is once again a priority.

Other points:

There were also changes for those who have not always resided in the UK.

Those hoping that there would be a more sensible assessment of family income for the child benefit clawback, will be disappointed.

Investors relief lifetime limit will reduce from ￡10m to ￡1m, which sounds significant but affects very few.

In summary:

So all in all, it wasn't the revolutionary, hard-hitting budget that the media and political rhetoric wanted us to believe.

The NIC hit and substantial increase in minimum wage is harshest on businesses that have already suffered substantially during COVID and are already having to adapt to new buying habits and the cost of living crisis.

And the SDLT additional rate was a surprise, but easier for property investors to manage than the anticipated change in CGT rates.

As always, my advice is to stay informed but stay calm. Focus on what you can control and build a strong, honest, profitable business that can "roll with the punches". If you need help with your business plans or just want an empathetic ear, you know where to find us .