UK Budget: Budget reaction from Armstrong Watson

Tax Partner Becky Bowness said: “Rachel Reeves presented the first Labour Budget in 14 years and the first ever by a female Chancellor. She was a commanding presence and delivered a longer Budget statement than we have seen in many years.  There were no significant surprises as many of the changes had been trailed in the build up to this landmark Budget.  While positioned as a Budget for the “working people” there are certainly questions over whether it will deliver and concerns around how the additional public spending will be funded.

“The increase in National Minimum and Living wage coupled with the increase in Employers National Insurance Contributions (and the reduced threshold when this is payable) will have a significant impact on businesses despite the increase in Employment Allowance for small businesses. Inevitably, this will have an impact on employees as businesses may not be able to pass this cost on in full to their customers so we could see cuts in headcount and reduction in pay increases.

“Business owners will also feel aggrieved that having invested both time and funds in their business they will now have an increased tax liability when selling shares or, even worse, passing on to the next generation where there is no cash to fund increased tax bills.

“Fundamentally the Labour government has changed the Inheritance Tax regime which has existed for decades to bring significantly more value into an individual’s estate, again giving rise to tax charges where there is no cash to fund liabilities without disposing of assets.”