Budget day for me started on a bright Wednesday morning in Birmingham; a lovely stroll in the sun to Birmingham New Street and very easy commute down to the Euston office (round the corner from the station) was accompanied by a burning feeling that I must have forgotten something (so far so good)!
Unfortunately the journey down for my ‘partner in crime’ Mr Edward Ian Timothy Passmore, Corporate Tax Associate – Norwich, wasn’t so smooth with his train held up by obstructions on the line, meaning a mad dash across London in a taxi was required and ‘standing room only’ available on arrival.
I took my seat in the 5th floor room to screen the budget a full hour before the chancellor was due to commence his speech and saw all manner of people arrive during that time, Jonathan Riley (Head of Tax) was one of the first, with colleagues from service lines and locations throughout the country following shortly behind – resulting in the aforementioned sell-out! This representation from a range of service lines was something I hadn’t necessarily expected, my assumption that Tax would dominate the room expelled by the realisation that the Budget affects everyone.
One of the main things that struck me about the budget was how hard it is to quantify the sums of money being talked about. For example, £200m has been made available to fix potholes (something that rather pleased the MP of Northampton North). But is that a lot? When the chancellor is talking about the forecast for borrowing this year being £108 billion, £200m seems like pocket change! I guess the answer is that it depends, if there is £600m worth of damage that needs to be repaired – then it’s probably not enough.
One announcement that Ed (Passmore, not Miliband) and I were particular fans of was that Inheritance tax is to be waived for members of emergency services who give their lives on the job. I think if you can look at a change and wonder why that wasn’t always the case then that is very much a change for the better. Of course you could take the cynical view that touches such as this are politically designed to help influence voters ahead of next year’s elections, but I’ll leave you to make your own mind up.
Much of what I discussed in my ‘what to look out for’ blog (http://traineeblog.grant-thornton.co.uk/2014/03/18/budget-2014-what-to-look-out-for/) was implemented – including the ‘help to buy’ extension and Ebbsfleet development which should make it easier for people to take their first step onto the property ladder, something which I’m sure will be gratefully received by followers of Spilling the Beans.
The £10,000 income tax personal allowance that will come into play next month will be increased further to £10,500 for 2015/16 – meaning a bit more cash in the pockets of us trainees (no complaints here).
For those that like a refreshing Friday night tipple, good news: beer duty fell and the duty was frozen on Scottish whiskey and West Country cider (see above). I’ve a sneaking suspicion that this may be afforded bigger headlines than it warrants in tomorrow’s tabloids but again I’ll leave you to form your own opinions.
The fall in corporation tax to a flat rate of 20% for all companies will be accompanied by the doubling of a government loan scheme designed to support Britain’s exporters and increased capital allowances for investment in qualifying fixed assets. These moves will continue to provide and enhance incentives to those driving their businesses forward. An increase in the research and development tax credit should also encourage the innovation of British companies.
Those of you who are embarking on careers in Corporate tax will be directly affected by these changes and almost all of you are likely to see these issues crop up as tax modules are common place in almost all qualifications that us trainees study towards. With that in mind the scrapping of the 10% tax rate on savings income (not often seen in practice but sure to trip you up during your studies) will be well received!
The other major headline of note was that people are free to take their pension pot as a lump sum on retirement rather than having to buy an annuity, bad news for the share prices of such providers!
Aside from the technical content, those of you who watched the budget may have also noticed Mr Osborne focusing on ensuring we have a ‘resilient’ (seemingly his favourite word) economy and offering various comparative figures with the United States – who I anticipate don’t compare themselves to us nearly half as much at similar events!
History and nostalgia were also present, as the new state of the art, ‘thrupenny bit’ inspired £1 coin was announced and money promised to celebrate the 800th anniversary of the Magna Carta – one of the various times the chancellor managed to work a pop at Ed Miliband into his speech.
And with the promise of bigger bingo prizes due to bingo duty being halved (music to my Grandma’s ears no doubt), that was about that – the chancellor taking his seat after just under an hour on his feet.
The hour was a very intriguing experience as people bashed away at their keyboards and phones to give their opinion to the outside world via various social media outlets. It was good to see how those further up the organisation go about their work on a day such as today and gain further evidence that no matter the role level, everyone at the firm is normal and approachable.
For those of you looking to obtain the key points of today’s announcement – check out Ed’s key points here (http://traineeblog.grant-thornton.co.uk/2014/03/19/budget-2014-key-points-and-changes/).
Our coverage of the #Budget2014 doesn’t end here as we are off to the FDIntel Budget Breakfast to be held at the London Stock Exchange tomorrow morning (blog to follow). But first it’s time for a spot of dinner and a couple of drinks for me and Mr Passmore; it’s amazing the friends you can make at Bradenham!