Subdued elation for the aspiration nation
George Osborne delivered a surprisingly upbeat budget for what he has dubbed the ‘aspiration nation’, even if some of those dreams may have to wait another year before they are realised. Nevertheless a raft of measures, marginal in themselves, may well add up to more substantial effects, tipping individuals and employers into far-reaching decisions on employment, housing and investment.
While larger corporations will welcome the reduction of the main rate of corporation tax to 20% in 2015, persistent red tape around associated companies mean this merging of corporation tax rates is less of a simplification than it might appear. But a 10% increase to the Above The Line R&D credit, will, it is hoped, add innovation to their aspirations.
For smaller companies there was plenty of good news, such as a limited extension of reliefs for Seed EIS investment, and the removal of stamp duty on AIM transactions, but the main story was around employment. A £2,000 ‘employment allowance’ will mean a third of UK companies will pay no employers’ NICs and will hopefully act as an incentive to take on staff. Whether this will offset the disincentive offered by pensions auto-enrolment remains to be seen.
Individuals can however look forward to the personal allowance rising to £10,000, childcare vouchers worth up to £1,200 a year, and Government support in the form of shared equity home loans and guarantees, as well as an extension of the right-to-buy, if home ownership is their ambition.