Hitachi Capital is pleased to learn that fuel duty will be frozen for the next 12 months, for a sixth consecutive year. This is excellent news for individuals and businesses alike, especially when the Chancellor opened and closed his Budget speech with a statement on how we should ‘act now and not pay later’.
We are also pleased to learn that company car taxation will not be radically changing in the next four years, allowing businesses and individuals to appropriately plan ahead. Whilst there was speculation of taxation being based on NOx emissions, remaining with the widely accepted CO2 based banding is a welcome relief.
In contrast to this reassuring news, it was disappointing to learn of a further increase to Insurance Premium Tax. A hike last year of 3.5%, which only came into force in November 2015, was increased by a further 0.5% it was announced yesterday. Although this is lower than was expected by some predictions, and the funds raised from the 0.5% increase will go to improving flood defences, many individuals and businesses are yet to see the increase in their premiums.
Small business benefits
We are, however, pleased to hear of the support George Osborne is bringing to smaller businesses and infrastructure. Learning of the green light for projects like High Speed Rail 3 and Cross Rail 2 is brilliant news for the UK as a whole and should help drive investment across the country. Even some of the smaller measures, like the reduction of Severn Bridge tolls, will benefit the millions who use the route each year.
It was also promising to learn that the personal tax allowance limit has been confirmed at £11,500 from April 2017, when the higher rate threshold will also rise to £45,000. This, combined with the new, incentivised Lifetime ISA should help more people save for the future.
Similarly, it was reassuring to hear George Osborne’s support of micro and small businesses. Self-employed individuals will benefit from the abolition of Class 2 National Insurance Contributions and businesses will welcome reductions and cuts to business rates and Capital Gains Tax.
However, there was no mention by George Osborne of any changes to salary sacrifice schemes in his statement yesterday. In the full budget, no changes have been suggested as yet, however the Government has gone as far as to say ‘pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit’ from such schemes.
Hitachi Capital will continue to work with customers in exploring how they can benefit from such schemes under current and future legislation, as and when it is published.