The Chancellor talked about how his Budget would be centred on investing to secure a bright future for Britain, and today he focussed on taking a balanced approach to maintain fiscal responsibility, support jobs, build homes and help families cope with the rising cost of living.
The increasing of personal allowance and higher rate tax thresholds can often be overlooked, but for many clients this represents a real increase in their take-home pay. Coupled with the increase in the National Living Wage, many should find their pockets fuller than they previously were.
It was widely expected that there could have been some radical changes in the tax privileges offered by Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EIS) and Seed EIS. However, these remain intact and indeed it was announced that there would be a doubling of the maximum subscriptions to an EIS in certain knowledge-intensive businesses, the details of which will emerge in the coming hours. This can only be seen as a positive development for clients who are appropriate for such investments as part of their overall financial planning.
In relation to general savings, the £20,000 limit on ISA subscriptions is frozen but there were heartening measures in place to help first-time house buyers with a significant gesture by the abolition of stamp duty on homes up to £300,000 from today and, for those in more expensive transactions, the first £300,000 will be exempt on purchases up to £500,000.
Mr Hammond also made reference to measures which will be introduced to allow pension funds to invest in assets with long-term investment horizons, such as venture capital, infrastructure and other illiquid assets. This could provide an interesting investment opportunity for clients and we will watch developments in this space closely.
Chief investment officer Simon Gibson said: “The Chancellor promised a Budget which would make Britain fit for the future and the measures he has announced in the areas of Research and Development, innovation and investing for the future certainly play to that narrative.
“From an investment perspective, we wait to see how this pans out and we will look to identify opportunities within our investment strategies which will benefit our clients in the longer term”.
George Houston, senior technical and development manager, said: “We approached this Budget with some trepidation, given the rumours that had emerged over a wide range of areas which are of keen interest to our clients’ financial plans. The Chancellor chose to largely allow stability in current pension rules and many clients will be relieved as a result.
“It was good to see a vote of confidence in EIS investing strategies and we will look closely at the opportunities that will emerge in this area, as well as within the VCT and Seed EIS categories. As with every Budget there is one constant – and that is that clients need regular ongoing trusted financial advice”.