If you, like myself, are doing some research into the Budget through various websites (possibly ahead of assessment centres), then you may also notice that while articles sometimes appear in the business section – the majority of content is listed under ‘Politics’. That could be indicative of what you can expect on Wednesday, with this the last Budget that is likely to have a real impact before the general election in just over a year’s time.
With the economy recovering, we enter this Budget in a slightly different economic environment to previous announcements during George Osborne’s reign. However, the message from Mr Osborne is that the Government must continue to reduce spending, with any great changes to that strategy too risky to the continuation of the recovery.
But what should you be looking out for and what will matter to you…? Pension arrangements and mansion taxes (unfortunately) are generally not at the forefront of trainees’ and graduates’ minds but there are to be some changes that will impact on those of us who have recently entered or are on the cusp of entering the world of work.
The Coalition’s pledge to raise the income tax personal allowance to £10,000 will come to fruition from the start of the new tax year on April 6. The Liberal Democrats would like to raise the level at which workers start paying tax to £12,500 but an announcement to this effect looks unlikely, with the personal allowance only due to rise at the rate of inflation from next year.
The taxpayers expected to fund this increase are the increasing number of people who are falling into the 40% income tax rate. The net effect therefore, will be a bit more cash in the pockets of us trainees – possibly at the expense of those in the office who are slightly more established.
This new personal allowance is now vastly different to the level at which you need to start paying National Insurance contributions (NIC), a tax in all but name, and so there have been calls to increase the £7,956 a year threshold to bring more parity between the two. Grant Thornton is also hoping to see a NIC exemption for employers and employees for the duration of an apprenticeship, to encourage businesses to provide people with the right skills, a move that I’m sure would be a very welcome one for your pocket and your CV!
In terms of property, the Chancellor has already announced that the ‘help to buy’ scheme for newly built homes will be extended to 2020, again something that may directly impact on you as you enter the world of work and look to get on the property ladder. Perhaps one or two of you may even move to the proposed new Garden City in Ebbsfleet?
With average house prices rising, there are also calls for the stamp duty land tax thresholds to be increased in line with those movements. More and more home buyers are having to pay 3% stamp duty on their house purchases over £250,000, rather than the 1% between £125,001 and £250,000 – movements here may also reduce your costs when you are looking at purchasing property.
Other headlines include the now much anticipated fall of corporation tax to a flat rate of 20% for all companies, likely to be of interest to those of you looking for a job in corporate tax or having to sit tax modules as part of your qualifications!
Ed from our Norwich office and I will be heading down to Euston on Wednesday to see what the experts within the firm get up to on Budget day, providing you with an insight through pictures, tweets and a blog as to the reaction and what it means for our clients, us as trainees and you as applicants and future employees.
Be sure to follow @GT_Rhys, @GT_Edward, @GT_STB and @fdintelligence on twitter and @gt_trainees on instagram for all the action throughout the day. Also look out for the Grant Thornton specific #GTBudget and the general #budget2014 across all your social media platforms.
Not long to go now…!