What does the Mini Budget Mean to Business?
There is a statement being released to the House of Commons later today. It will be an announcement to the country of what the new Budget will look like. The leaks in the press indicate that VAT will drop to its lowest legal level at 15% while high earners will be paying 45% tax after the next election.
The statisticians are pointing out that the 45% policy will bring in £2 Bn in new tax income, while the 2.5% drop in VAT will cost £15Bn. It makes you wonder what else will be hidden in the small print to make up the £13 Bn difference – unless it means that there will be a drop in public spending.
UPDATE:
The only term we can come up with to describe how we feel about the report is FACEPALMED!
– it’s definition is To bring the palm of one’s hand to one’s face as an expression of mixed humor and disbelief or disgust or shame, for example, when one is caught off-guard with a particularly bad pun.
We were hoping that the VAT reduction might bring down the cost of fuel, but that will not be happening. The empty property relief is just a U turn on a policy which didn’t work – as is the vehicle duty rates for next year.
NI might go up by 2011, if Labour are still in power – as is the personal allowance for people with an income over £150K. If you run a business as a sole trader, and this matches your profits, you will be effected.
There will be more feedback over the next few days – however, it doesn’t seem to be the magic bullet that we were expecting.
Finally – the FTSE increasing had NOTHING to do with this budget, and everything with Citibank being bailed out in the US. It is time to start exporting your goods!
