It is a pity that the same cannot be said of the Spring Budget, which was having its last outing and departed with a whimper. The Chancellor spoke confidently during his Budget speech however, his best lines were used to attack Jeremy Corbyn, rather than making any major decisions. The spectre of Brexit and its inherent uncertainty was hanging over Parliament and to some extent the Chancellor was in a “dammed if he does” and “dammed if he doesn’t” position and therefore chose to do a little in the hope of avoiding both camps.
One of the benefits of this Budget was that the number of measures released on Budget Day that were not talked about by the Chancellor was far fewer than the amounts that we have come to expect from his predecessors George Osbourne and Gordon Brown. The measures that were introduced ended up being a sticky tape application to the problems of social care, which was funded by a raid on small business both incorporated and unincorporated.
Whilst this was an attack on small businesses the actual level of the attack was mercifully far lower than the amounts that we feared when the Chancellor started to speak. The truth of the matter is, that whilst the press will make a big song and dance about these issues, when taking into account the promised rises in the basic and nil rate threshold the overall effect of all the measures will be beneficial to those at the bottom end of the scale and probably have a nil effect to those towards the top of the scale.
To quantify the adjustments in terms of numbers the maximum effect of the 2% increase in Class 4 national insurance will be around about £700 the effect of the previously announced but not yet introduced removal of Class 2 national insurance will be about £140 meaning a net increase of £560. The increase in the nil rate band to £12,500 and the basic rate band up to £50,000 as promised, will create a benefit of about a £1,000. Meaning the overall effect is a tax reduction of £440. However, as with their predecessors the Government has been guilty of telling us the good news many years in advance whereas the bad news gets introduced quicker with the effect that the good news is not nearly as good as they promised.
With regard to the reduction in the nil rate dividend band, the effects of this are more than offset by the reduction in the rate of corporation tax for entrepreneurs and the increase in the ISA thresholds for investors (please note you have until 5th April to use your current year ISA allowance).
There are a number of regular annual rate changes and these have all been updated on our APP which is available free of charge on both Android and IOS.
To conclude so this is how a Spring Budget dies —— with a cough and a whimper.