Following the Chancellor of the Exchequer’s budget announcement today, Bedford financial advice firm, Cambria Wealth Management, share their key takes on Rishi Sunak’s speech this afternoon and Bedford and Kempston MP, Mohammad Yasin, also gives his perspective.
Today’s budget saw extended Covid support for businesses, grant and support packages for hospitality, arts & leisure, the biggest business tax incentives in modern history, and help for first time buyers.
The Chancellor certainly packed a lot into his 50 minute statement in the House of Commons this lunchtime and the team at Cambria were watching in earnest to hear just what Rishi has up his sleeve for the UK as we approach the first anniversary of lockdown.
It’s no surprise that the Chancellor’s statement focused on plans for the government to continue to pump support into the UK’s pandemic-damaged economy.
Extended Furlough and additional arts, culture and sports support
The Furlough scheme is extended until September 2021 and new Restart Grants were announced on 28th February.
A £700m support package was announced for Arts, Culture and Sporting and the lower VAT rate will be extended for hospitality businesses as well as business rates relief.
This is certainly good news for Bedford’s hospitality businesses as well as the town’s theatres and gyms, but will it be enough?
Boost for construction and manufacturing
The Chancellor also announced the 130% Super Deduction scheme to help drive economic recovery.
This means that when businesses invest, they can offset this against their tax bill by up to 130% of the value of the investment.
This is intended to increase investment and is certainly a key consideration for business owners when it comes to new capital investment and projects.
Overall, this is excellent news for industries such as construction and manufacturing.
The Budget delivers on the government’s pre-election promise to freeze national insurance, VAT and income tax, with no change to pensions tax, inheritance tax or personal allowance either.
Drivers and drinkers (but not at the same time) can also rejoice with no increase on duties for fuel or alcohol.
In a bid to move away from Generation Rent, the new Mortgage Guarantee Scheme was announced, which will require first time buyers to provide only a 5% deposit on purchases up to £600,000, applicable to any home, not just new builds.
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But it doesn’t end with today’s announcement. Further tax consultations are expected from the government later this month and tax changes are coming. Taking steps to manage them will remain an important part of the financial planning process.
Commenting in today’s Budget announcement, MP for Bedford and Kempston, Mohammad Yasin welcomed the emergency measures, but felt it lacked a long-term strategy.
“This is a budget that might get us through the next months of the pandemic but falls far short of what is needed to get the UK on a recovery track for what has been a catastrophic hit to the economy – the worst of any major economy as a direct result of the Government’s dreadful handling of the pandemic,” he told the Bedford Independent.
“Rishi Sunak is hitting families up and down the country with a triple hammer blow of council tax rises, cuts to Universal Credit in six months’ time and pay freezes.
“This Budget was supposed to be an answer to the economic catastrophe that has hit us but beyond the emergency measures, which are welcome, it was paper thin and there was no long-term strategy on how we will rebuild the UK and create a fairer, greener economy after the double impacts of Covid and Brexit.”