This was George Osborne’s eighth budget; an assured, polished, booming tour de force of thrust and parry, laced in equal measure with humour and barbed sleight. 
In his first budget in 2010 George was but a young lad, nervous, quieter in tone, less assertive with less conviction. The change in the intervening six years is palpable. 

George Osborne wants us to remember this budget for being a budget for the next generation, and for putting that generation first. 

When all is said and done I don’t think we will remember that at all. These are the three things however it might be famous for: 

1. The global economic downturn has made a mockery of the forecasts he made less than six months ago – he got the numbers very very wrong.

2. The sugar tax is a not a bitter pill to swallow. Being the first country in the world to do this puts a feather in his, and Jamie Oliver’s, hats.

3. The Lifetime ISA for the under 40’s is a brilliant idea - we first suggested it ten years ago as a way to promote short, medium and long term saving. The devil, of course, will be in the detail so I will reserve my final judgement until I see it. But in principle this is a really innovative way of saving for the next generation, more aligned to the American 401k than a good old British pension scheme.

So all in all, with no room to manoeuvre, George has flick flacked and vaulted his way through a veritable potential minefield with the skill of a triple gold medal-winning fiscal gymnast. 

I applaud the confirmation on the reduction in corporation tax to 17% in 2020, and the removal of business rates from 600,000 small businesses – we used to pride ourselves as a nation of shop keepers – that is, after all, what put the great in Great Britain. 

The reduction in CGT from 28% to 20% was covered very quickly, almost as though George had forgotten to include it in the previous sentence, and there was precious little detail, but on the face of it this is a large reduction which was unexpected. 

So in this, George Osborne’s eighth budget, there was some real innovation, some real back-tracking and some real disappointment. This budget seemed a diverse mishmash of different economic strategies and ‘Georgisms’, delivered with great aplomb by a politician with aspirations for the highest office.

Of course the cynic in me tells me that this is a budget for six months, a budget to bide us through the European Referendum and to fan the fire of George Osborne’s political ambition.  

In conclusion, I have decided that as there is some real innovation this time and that we should actually pat George on the back, just a little, and tell him quietly: “Well done, George”.

If only we didn’t have a national debt of £1.6 trillion and a budget deficit of £70 billion then I might actually be really enthusiastic about the new ideas.


From April 2017, savers will be able to invest in a new type of savings vehicle; the ‘Lifetime ISA’. Available to all individuals aged between 18 and 40, it aims to promote savings for the section of the demographic who normally find it difficult to save for a new home or to allocate money to their pension. 

The perceived beauty of this new Lifetime ISA is the flexibility it affords savers, whether the focus is on saving for a first property, or simply supplementing retirement savings alongside pension.

The main characteristics of the Lifetime ISA are:

  • - Available from April 2017 to savers aged between 18 and 40
  • - Maximum annual limit of £4,000 (no monthly limit)
  • - All payments into the scheme (before 50th birthday) will benefit from a 25% bonus, paid by the Government
  • - For those looking to save for retirement
  • - Proceeds can be taken tax free from age 60
  • - Funds can be withdrawn at any time before the age of 60, but Government bonus (and any interest or growth on it) will be lost
  • - Early withdrawal will also incur a 5% charge
  • - For first time buyers
  • - Proceeds can be used towards a deposit on first home worth up to £450,000 across the country
  • - Accounts are limited to one per person rather than one per home, so two first time buyers can both receive the bonus on their respective schemes
  • - Help to Buy ISA’s can be transferred in from April 2017

Our view:

We welcome the drive to incentivise savings for the young and those on lower/middle incomes. Certainly the self-employed will be pleased. How much it will benefit those looking to purchase their first home, or more significantly, how it will affect pension saving is yet to be seen but we do see this as being the first step towards the Chancellors pre-budget nirvana – the pension ISA. 


Further to the introduction of the new Lifetime ISA, the Chancellor also announced plans to increase the current maximum ISA limit to £20,000 from April 2017. 

Our view:

More welcome news for savers UK wide, this further increases the incentive to save, allowing the vast majority of people to save completely free from tax at higher levels than ever before. 


An incredibly welcome new tax charge was announced with a levy on drinks with high sugar content (consultation to run to determine exact tax rates).

The strain on the health industry for obesity related illnesses is ever increasing and a main focus of the governments change is to help childhood wellness. The financial cost of this to the NHS alone is estimated to be £5bn and £27bn to the country in total. If you consider dental, diabetes, cholesterol and long term organ damage, the actual cost is likely to be higher. 

Aside from attempting to tackle the health side effects of added sugar by introducing the levy (which the government ultimately hopes producers to re-formulate drinks to be healthier), the tax income will fund extra PE in schools, longer school days to incorporate sport and more nutritious breakfasts for our school children. 

Our view:

Our main concern is the government allowing companies to make the decision on how they fund this levy. The Chancellor is allowing producers to decide whether or not to increase their prices to account for the sugar levy or take the increase in tax on the chin. If prices increase this will not only impact the buyers but it won’t address the sugar content issue.


A constant rumour in recent times is that the government is going to abolish Salary Sacrifice. It is no surprise to us that this has not occurred and the rumour mill can at least fall silent for the near future. 

Whilst we knew the government were “reviewing” salary sacrifice arrangements, such a bold move as to remove them would counteract pensions and savings tax breaks. The latest 2016 budget statement quotes:

“…salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010.The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes.”

If you consider the arrangements you can save income tax and national insurance (and employer national insurance) that are in place at the moment, and those left untouched by the government legislative change, the list is dwindling. 
Childcare Voucher and Tax Free Childcare changes are already on the horizon, bikes have already been altered with VAT and end of hire rules and car scheme pollution benefit in kind rates are increasing to name a few. 

Our view:

The attractiveness of a salary sacrifice arrangement for all involved is a no brainer and with the rise of efficient technology being able to engage employees in salary sacrifice processes the government may look to halt money slipping through the tax man’s fingers unintentionally.  Whatever changes may lie ahead will be waited for with anticipation, our opinion is the net will shrink in and a flat rate of tax/NI savings may be established to limit the Government’s exposure. 
Their stated objective is that pension saving, childcare, and health-related benefits such as Cycle to Work should continue to draw income tax and NICs relief through salary sacrifice, outside of these schemes, there are not many benefits left to be impacted by future salary sacrifice changes. 


Ahead of this budget there were rumours doing the rounds that once again there would be an increase in Insurance Premium Tax (IPT). 

While this did happen, thankfully this time the increase isn’t as harsh as the 3.5% that we saw at the last increase, with an increase of only 0.5% being announced to come into effect from October 2016. In the same way that we saw the increase last time being cited as an increase for the home and car insurance market, the same has been done this time with the chancellor saying that the revenue raised by this increase would be used to further invest in flood defences.
Of course though, in our industry we know all too well that this increase in standard insurance premium tax also impacts health related benefits that are subject to the same taxation rules. 

Our view:

While we will work with providers to ascertain how this change will be put into practise, we expect a similar approach to be taken where the increase will simply be added in at either the renewal date of the policy, or to premiums that are invoiced after 1st October 2016. 


The previous position on the closure of Employer Supported Childcare (ESC), once Tax Free Childcare (TFC) was launched, was that it would no longer be possible to join ESC. In further efforts to help working families it has been announced that it will still be possible to join ESC until April 2018 in order to allow a period of transition between the two schemes.

Our view:

We see this as a positive move, as the previous rules meant that an employee only had one opportunity to decide which scheme was best for them (the day before the launch) whereas now employees will be able to make a more informed decision based on their circumstances and having reviewed the operation of TFC.


The personal allowance for income tax is due to be raised to £11,500 from April 2017, with the higher rate tax band also increase to £45,000. This will take an estimated 585,000 tax payers out of the higher rate band.

Further to this, the Chancellor also announced a big reduction in Capital Gains Tax, reducing the higher rate band from 28% to 20% and the lower rate band from 18% to just 10%. There will also be an 8% surcharge on new rates for carried interest and gains on residential property, which will try to incentivise investment in companies instead of property.Private Residence Relief, where an individual’s main home is not subject to CGT, will continue as normal.


The duty on fuel was expected to rise given the continued low price of oil, but the Chancellor confirmed that this would remain frozen for the following year, explaining that people had paid for the high price of oil already and should be able to continue benefiting from the low prices now.

Duty on beer, spirits and most ciders will be frozen, but all other alcohol will rise with inflation. Tobacco duty will also increase by 2% (3% for rolling tobacco) as planned.