The Budget: Winners and Losers

Are 100% mortgage deals really the best way to get onto the property ladder?

mr money bags business cartoon (2)Our columnist Mr Money Bags, who has decades of experience in Finance, an MBA, an advanced diploma in Financial Planning and not to mention his super business skills, is here to give you, our loves readers some valuable tips and advice on money business matters. He is forthright and can sometimes be stern when it comes to your cash, but when it comes to finance he really is the expert. Read on for your business and finance advice…

Let’s start with the key positive points of this year’s budget:

  • Tax allowance will be increased to £11,500, with the higher rate band rising to £45,000 by April 2017
  • Lifetime ISA – to use to buy your first house or save towards retirement. The maximum you can save is £4,000 of your own funds per annum
  • Business rates relief threshold increasing from £6,000 to £15,000
  • A sugar tax, the funds from which will be used to fund sports in primary schools
  • HS3 between Leeds and Manchester
  • Incentive for lower income savers to save, which will be worth up to £1,200 per person
  • Freeze on fuel and alcohol duties, whilst increasing duty on cigarettes
  • School children will experience a longer school day

Now the key negatives are:

  • Disabled individuals will be heavily hit, with circa 300,000 people set to be hit by between £3,000 -£3,600 per annum
  • More cuts across the board as the government needs to save more funds
  • A tax rise for insurance premiums

There are certain bits of the budget that I really like. As I work in finance I always am keen to see if the government is helping individuals by raising the threshold within which people pay tax. This is yet the case again, and I guess we need to thank the Liberal Democrats as well as the Conservatives for helping most of us, and taking millions of people out of paying tax.

I know some people would say it is not fair as higher rate tax threshold is increased, therefore the highest paid are benefiting, however the higher rate band has been squeezed since 2009 and it is about time people that the higher rate band is moved upwards. I say this because those on middle incomes have seen their net pay squeezed since 2009, and it is refreshing to see that the government recognise that many people earning circa £43,000 are not relatively well off.

The other big news is those of us that want to take a dabble online and make some cash. The government have given individuals a further £1,000 tax free for this purpose. I really like this idea as it might get people to think about new digital business ideas. This is especially the case since the first £1,000 is tax free.

In terms of the sugar tax, I like the fact that the government will plough the funds to aid sports for primary school children. I guess the tax will make most of us more health conscious. The tax is based on drinks, however surely it needs to extend to cakes, as well as chocolates. In my view any item with 20% plus sugar content should be taxed, and healthy foods and snacks should be reduced in prices.

The government however have left a sour taste in the mouth of many of us due to the cuts specifically aimed at those that get disabled benefits. I really feel for someone who is getting benefits due to a disability because for those genuine cases, the person is not able to work through no fault of their own. I must say Ian Duncan Smith resigning has heightened the debate, and for the right reasons. Perhaps the government should look at benefit fraud, and target fraud as a means of making cost savings, rather than hitting the most vulnerable in society.

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