14 July 2015
Press ReleasesJuly Budget 2015 commentary from Thames Valley accountants and business advisers James Cowper Kreston.
George Osborne has today delivered the first Conservative Budget for 18 years, and has announced “a pay rise for Britain” with the introduction of a national living wage.
It was a Budget that will be welcomed by many in the Thames Valley, but comes with a sting in its tail.
The increase in the inheritance tax threshold to £1m on the family home for married couples will be particularly welcome in a part of the country where the value of homes is well above the national average.
Ian Miles, a partner specialising in personal tax at James Cowper Kreston said: “This measure has been in every Conservative manifesto for the past 15 years, and will be welcomed by home-owners across the Thames Valley. Home-owners that have recently downsized will also have something to cheer, being able to benefit on the value of their previous home.”
However, buy-to-let investors and those with second homes that they rent out will be disappointed to learn that mortgage reliefs will be limited to 20 per cent by 2020.
Ian adds: “Many people have chosen to purchase second homes as part of their pension plans. Whilst this will leave them out of pocket, it is unlikely to dampen the enthusiasm for buy-to-let.”
Businesses across the Thames Valley will welcome the cut in the corporate tax rate to 19 per cent in 2017 and 18 per cent in 2020.
However, small businesses owners across the Thames Valley who choose to pay themselves via dividends may, following Osborne’s Budget, face a higher tax bill than expected.
Sharon Bedford, a partner specialising in corporate tax at James Cowper Kreston said: “This announcement is a surprise and will be disappointing for business owners. Many choose to pay themselves via dividends as it has been, until today, a more tax efficient way to take an income. They will need to make some swift calculations on the most tax efficient way to now pay themselves.”
