Fiscal Fiasco As well as the sheer level of tax raising, this Budget will be remembered for the almost non-stop speculation, leaks, pitch rolling and kite flying in the lead up. Even the Deputy Speaker, Nusrat Ghani, was moved to give the Government a good telling off in The House. Even worse, for the first time ever, the entire Budget was accidentally released 30 minutes before the This trumps the leak of George Osborne’s budget in 2013 when the Evening Standard Newspaper tweeted an image of its next-day’s front page containing many of the Budget measures. And 1996 when a substantial part of the Budget was leaked to the Daily Mirror. Rumour and speculation lead to uncertainty and that is the enemy of business. It saps confidence and investment falls. I sincerely hope that next year’s Budget is less of an omnishambles and gets back to what the Government keeps promising – a laser-focus on policies that create growth. Chancellor’s speech by the Government’s own spending watchdog, the OBR.
Paying fairly lies at the heart of family businesses. But, when you add on the additional 15% NI cost, the latest increases make it harder and harder for firms to justify the cost of taking on more people. This is especially true for young people and FBUK is increasingly concerned that year-on- year increases are pricing young people out of the jobs market, depriving them of the opportunity to join the career ladder. Most tax rises are down the line increases do not kick in immediately and some only in 4 years’ time. The biggest tax increases in the meantime are the “stealth” tax rises due to the continued freeze on Income Tax and NIC bands, which will continue for three years beyond 2028. Despite us talking about the Budget being tax raising, many of the The latest date the Government can call the next General Election is summer 2029, just as some of the changes come in or have provided additional revenue. So, it would be no surprise to see the Government cheering good news and potentially offering us a give-away Budget in Autumn 2028.
For interest and rental income, a 2% increase from April 2027 broadly aligns the rate with that of earned income for higher rate taxpayers. For dividend taxes, a 2% increase will apply from April 2026 but only for basic and higher rate taxpayers (increasing the rate from 8.75% and 33.75% to 10.75% and 35.75% respectively). The highest rate of dividend tax, payable by additional rate taxpayers and trusts is not changing from 39.35%. But that will be little consolation for those family businesses which, when you add in Corporation Tax at 25%, leaves them with an effective tax rate of 54.5%. Minimum wage increases Less than 24 hours ahead of the Budget, the Government announced it had again accepted the recommendations of the Low Pay Commission to levy above-inflation increases in the National Minimum Wage. Having already added significantly to business costs through last year’s rise, the rates will go up again by 4.1% to £12.71 an hour (for over 21’s) and by 8.5% to £10.85 (for 18 to 20 year olds). 16 and 17 year-olds will get a 6% rise to £8 an hour.
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