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Reaction to today’s budget from around the region

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Glynis Frew, managing director of York-based Hunters Property Group, the sixth largest UK’s estate agency group with over 128 branches nationwide, said of today’s Budget:

“It was good to hear the Chancellor talk about his provisional agreement to allow Manchester to keep 100 per cent of the additional growth in local business rates as the Government build ups the Northern Powerhouse, as well as a wide-ranging review of national business rates. Business rates currently unfairly hit smaller businesses across the country.

“They put high street estate agents at a disadvantage against the increasing prevalence of online estate agents who do not have to contribute to this form of taxation.  The Government has to support town location businesses to avoid the threat of empty high streets. 

“We welcome the Chancellor’s review on the avoidance of inheritance tax. However, as was the angle discussed yesterday, a change to the current system now would have been better.

“This would potentially benefit families across the country and in turn encourage more property ownership, as well as providing greater security when purchasing a property. Inheritance tax levies penalise people who have saved all their lives.”

“Whilst we are seeing positive activity in the lettings market, we are concerned about the introduction of rent control legislation and banning of lettings agents’ fees that some parties are considering introducing. This will only result in higher rents which cannot be fair to tenants.

“Sixty per cent of our landlords have said that they would exit the rental market if such rent controls were put into place. Good landlords already have to abide by a host of new pieces of legislation and we feel this sector needs more support, rather than prohibitive measures.

“The lettings market is a very important part of the UK’s housing sector infrastructure that is often overlooked – figures suggest that we will see an additional 1.2 million households in England & Wales in the private rented sector by 2019 and a continued trend in more and more people opting to rent rather than buy.”

Simon Theakston, Executive Director of T&R Theakston Ltd and a former Chairman of the Yorkshire regional group of the British Beer and Pub Association (BBPA), said: “This is good news and we will be celebrating in Masham tonight.

“Our industry has been squeezed for far too long and this reduction, the third year in row, recognises the importance of the British brewing industry and also the role of pubs and clubs at the heart of the community.”

Mr Theakston, whose brewery is best known for its Old Peculier cask ale, added: “This will give pubs and breweries a growing confidence to invest in their individual businesses, leading to the creation of jobs, particular for young people at the beginning of their careers.”

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Masham brewery boss Simon Theakston

 

John Cridland, CBI director-general, said: “Stability and consistency are what businesses need to grow and prosper. This Budget sets the tone, providing a clear plan for fiscal health and growth.

“This Budget has some encouraging measures to help businesses create jobs for the benefit of all.

“The brighter fiscal picture has allowed the Chancellor to recalibrate his deficit reduction plans. In the next Parliament this fiscal breathing space should be used to achieve intelligent reductions in public spending, together with much-needed infrastructure and innovation.

“With business investment a crucial driver of growth, the Chancellor has signalled his intention to continue the Annual Investment Allowance. We want it to be made permanent in the Autumn Statement at £250,000 – this will fire the UK’s economic kiln by spurring smaller firms to invest in plant and machinery.

“The reduction of the headline rate of Corporation Tax to 20 per cent next month, is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment.

“The oil and gas industry, which supports 450,000 UK jobs and is a major contributor to GDP, has been given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.

“Giving savers greater freedom over their pensions, including creating a secondary annuities market, boosts choice but after a period of flux what’s needed now is breathing space for the industry and consumers to get to grips with all the changes.”

Michael Craven, head of Brewin Dolphin in Leeds, said: “We might have expected George Osborne to throw everything but the kitchen sink(s) at today. Instead, he provided us with a fully funded budget, and didn’t spend the money on cheap giveaways. How very grown up of him – but he’s kept plenty of wriggle room to offer some stunning manifesto pledges on IHT.

“Cash ISAs were pointless before, but now they are pointless and unworkable. You’d need to have cash savings of more than £100,000 at one per cent interest to need to shelter any of it from the taxman, while the plan to allow you to take money in and out in any tax year looks like an administrative nightmare.

“The Chancellor’s announcement on deeds of variation leaves us with uncertainty – but we’d assume that the trade-off will be the much-anticipated £1m IHT relief offer in the Tory manifesto

“Moving on from the JISA and the NISA, the Help to Buy-SA joins the family of increasingly complex tax shelters. However, a £15,000 deposit won’t go far for first-time buyers in London and the South East. But be useful anywhere north of Watford.

“Our plea to stop tinkering with pensions – please stop before everyone stops saving – was not heeded with another reduction in the lifetime allowance to £1m.  After taking 25 per cent tax free cash – this pot could only buy an indexed linked joint life pension of £26,000.”

Tim West, Tax Partner at EY in Yorkshire, said of the changes to personal tax allowance: “An increase in the threshold at which National Insurance is paid would have been more helpful to the lower paid than an increase to the personal allowance. However, changes to the personal allowance will grab more headlines pre-election.

“The Chancellor announced an increase in the personal allowance to £10,800 with effect from 6 April 2015, rising to £11,000 by 2016/17.  The £10,800 personal allowance represents an increase of £800 on the current rate and of £200 from the allowance announced at the Autumn Statement. 

“This represents a tax saving of £160 per year for a basic rate tax payer.

“Osborne has also confirmed that he will raise the level at which individuals start paying tax at 40% from £41,865 per year to £42,385 for 2015/16 rising to £43,300 for 2017/18.  This, combined with the increase in the personal allowance, represents a further saving of £224 for higher rate taxpayers in 2015/16.

“The Chancellor clearly wants to boost people’s pre-election pay packets.”

Leigh Taylor, area director for SME Banking in the North East, Lloyds Bank Commercial Banking, said:

“We are pleased to see the Government bolster support for exporters to China through UKTI. This will help businesses to develop and grow into new overseas markets.

“A review into business rates could help smaller businesses and their cashflow while simpler annual tax returns will reduce the admin burden on business owners so that they can focus on growing their business.

“We want to help small businesses reach their growth potential, which is why we have committed to lend an additional £1bn every year until 2017 for small and medium-sized businesses.”

Paul Kettlestring, financial adviser at NFU Mutual in Pickeringsaid: “Radical new flexibilities to ISAs may have some prospective first-time buyers dancing in the street, but it’s all ISA savers who will be doing the hokey cokey after this Budget speech.

“The new rules will allow them to put money in to their cash ISA, take it out and put it back in again in the same tax year without losing any of their annual ISA allowance. This is great news for people who may need to dip into their tax-efficient savings for emergencies or when a cash flow problem occurs.

“A brand new Help to Buy ISA is effectively a tax break for those saving to get on the housing ladder. For every £200 that is put in, the government will contribute a further £50, up to a maximum of £3,000.

“Furthermore, from April 2016, basic rate taxpayers won’t pay tax on the first £1,000 of interest from bank or building society accounts. For higher rate taxpayers the tax-free amount will be reduced to £500.

“People on the cusp of retirement may be buoyed by the prospect of impending pension freedoms but the Chancellor may have given some of the best savers a headache.

“The maximum amount that can be invested in a pension over a lifetime will be capped at £1m from April 2016 and there could be some who need to take advice to make sure their pension pot doesn’t incur a hefty tax penalty for exceeding the new limit.

“Despite £1m sounding like a lot of money, this doesn’t just affect the super-rich. A pension pot of £1m is fairly common today for people earning a reasonable income who have put putting money into a pension over a number of years.

“Changes to annuities from April 2016 were already announced before today’s Budget so were no great surprise. However, the complexity of these changes will make it difficult for people to know if selling their guaranteed income for a lump sum is good value. This makes advice even more important to pensioners if they choose to weigh up the pros and cons of selling an annuity.

“We thought there may be something in this Budget about inheritance tax but an announcement to review Deeds of Variations was the closest the Chancellor came.

“Deeds of Variation are a valuable tool to help families change wills up to two years after a death. This makes it possible to stop an existing inheritance tax problem getting worse.

“Overall, it’s another crowd pleaser from the Chancellor. Savers and first-time buyers will take the most cheer from his announcement but there’s an air of caution around some of the restrictions on pension pots.

“We need to study the detail of the Chancellor’s calculations but, on the face of it, there are few net losers from today’s speech. Watch out over the next few days as the full implications become clear from the detailed statement.”

Stuart Watson, EY’s Yorkshire and Humberside Senior Partner, said: “The UK’s ability to create a ‘truly national economy’ could rest heavily on the ‘Northern Powerhouse’ delivering for business, so it’s encouraging that the Chancellor has placed more emphasis on devolution, taking forward infrastructure plans and supporting regional business.”

“All eyes will now look to the comprehensive interim report of Transport for the North, which follows-on from the One North report and will expand on earlier plans laid out for HS3.

“The strategy outlined in the report could prove just as significant in creating a thriving combined Northern economy as the other announcements in today’s Budget.

“By creating better transport infrastructure across the North – underpinned by innovation, technology and excellent design – the soon-to-be-published plans could enable us to improve productivity and become a more desirable destination for increasingly mobile workers, investors and businesses.

“Following the publication of this strategy, the vital tasks of securing investment and gaining public support will be critical enablers over the coming years.

“Collaboration and integration involving all stakeholders will be vital, as will healthy scrutiny to ensure the North’s transport network is cost effective, delivered on time and to budget, efficient and, most importantly, a truly integrated part of a long-term, national plan for infrastructure.”

“Having said in February that a deal to hand new powers to the West Yorkshire Combined Authority would come by Budget day, it’s encouraging that an agreement has been reached between the Government and the region for powers in important areas like skills, business support and transport, and it will be interesting to see it in practice.

“It’s clearly critical for economic rebalancing – as stated by the Leeds City Region LEP – that major regions like Yorkshire develop to become net contributors to the public purse. Intelligent investment by people on the ground, who know where money and time can make a real difference in driving growth, could help to make this happen.”

“By extending and amending enterprise zones in the Humber and Leeds respectively, and funding key emerging industries through a financial technology incubator in Leeds, and tech hubs in Leeds and Sheffield, the Chancellor has acknowledged the importance of helping entrepreneurial, high growth firms shape the future of regional growth and the wider Northern economy.

“By creating hubs of excellence in specific industries and segments, the Chancellor could help to create the next wave of globally competitive UK companies, and attract vital jobs and wealth in the UK regions to help rebalance the economy.”

 

 

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