Budget 26 – Be Glad For What You Didn’t Get.

Our Chancellor, John Healey, had 98 individually costed budget measures, a greater volume of measures than many, many previous budget statements, which I should be very much interested in, but in reality there is very little in there of any consequence to our clients, and an enormous can-kicking exercise has occurred.

There is welcome re-simplification of the Cash ISA rules and a concession on the 2-year rule around pension nominations being implemented after death and an unwelcome further increase to taxes on savings and property income, but, all in all, there are no policies that have a substantive effect on government expenditure, or tax receipts as a whole. A 10-year plan keeps being mentioned without any substance, and we have yet to find out how a “working person” is actually defined, other than the fact that most of the people I have spoken to have decided that it doesn’t apply to them. 

I could go on, but it’s easier to think about what the lack of meaningful measures means we can do, and should continue to do, and do with even more vigour than ever while the opportunity remains! 

There is nothing new in this regard and it is what we have been advocating for some time – maximise all the tax allowances available to you to structure your wealth efficiently, consider carefully how much “enough” is, and if you are lucky enough to be in the position of having more than you might need, move it on through your family generations sooner rather than later. 

We should also take a diversified approach to the way we invest and the tax planning strategies we use in our plans, to ensure protection against subsequent changes in legislation as best as we can. We explore these ideas further in the recording attached to this missive from me.

For most of our clients, fiscal drag is the big enemy; tax allowances are not rising, so we all quietly pay more and more tax year after year unless we plan accordingly where we have the opportunity to do so. And that is what keeps us busy advising our clients.

There is a whole wider debate about the situation the country finds itself in and the balance between the public spending we appear to be committed to and how this will be paid for, but that is beyond the scope of this article, and it would appear the Chancellor has taken the same view about the Budget.

Simultaneously, the overnight results are coming in to confirm Donald’s trouncing in the midterms. He is now a “lame duck” president, something he will no doubt enjoy being called.

Hard to say what this means financially at this stage, but the hope would be greater impetus to end the wars he has created with a knock-on beneficial effect on the cost of energy. It could also mean a slowing down in the AI-led boom (bubble?) from its current frenzy. The danger is he spends a couple of years lashing out with executive orders. Time will tell.

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This content does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice.