๐กย โ”Take a deep breath, pick yourself up, dust yourself off and start again”
| Hello and welcome to the Provide Finance newsletter. This newsletter includes a round-up of fascinating articles to read at your leisure, the news that matters this week and the best of Provide Finance content. We want to inform, entertain and inspire you. ๐ฌ This Weeks Discussion: Blockbuster Budget! The dust has settled from the Budget this week and one thing is clear – the tax rises are going to hurt businesses! The Office for Budget Responsibility, the UK spending watchdog in its review of the Budget, the OBR has estimated that the rise in national insurance contributions will mean there are 50,000 fewer jobs in the UK. It has also forecast the impact to profits for businesses. The national insurance rise was part of the ยฃ40bn of tax increases announced by Rachel Reeves. Other measures included changes to capital gains tax, inheritance tax, etc etc. One of the areas that has gone below the radar is Inheritance Tax and the impact to people looking to retire a broad or looking to come back to the UK The Old vs. New IHT Regime: Key Changes Under the previous IHT system, tax liability was based on an individualโs domicile status, generally determined by deep-rooted connections to a country, often from birth or long-term family ties. This meant: UK-Domiciled Individuals: Were liable for IHT on their worldwide assets, regardless of where they lived. Non-UK Domiciled Individuals: Only paid IHT on their UK-based assets, offering significant tax relief for global assets if a person established a non-UK domicile. From April 2025, this domicile-based approach will be replaced with a residence-based IHT system, meaning tax liability will now be tied directly to UK residency rather than domicile status. The major shifts under the new rules include: UK Residents: Will be subject to IHT on worldwide assets after 10 years of UK residency. Non-UK Residents: Even if living abroad, individuals remain subject to UK IHT on their global assets for 10 years after leaving the UK. This period, termed the โ10-year tail,โ brings a new layer of tax exposure for those with significant assets abroad. This transformation means a far-reaching impact on UK expats and those planning to repatriate, as the UK tax system will now extend its reach over global estates. Once you have read all the information regarding the budget and its contents, we all need some time to reflect and then discuss with your fellow professionals (accountants, Solicitors) and get the right advise on next steps for our businesses and personal dreams and aspirations. Having a mindset of a great movie also helps! If your are a fan (as i am) and loved watching the movies of Clint Eastwood and Clyde the orangutan! “any which way but loose” (more commonly known as โevery which way but looseโ) means doing everything possible except letting go or giving up. which i believe sums everything up perfectly! .jpeg?width=550&upscale=true&name=download%20(2).jpeg) Read Our Last Newsletter on our Site BIG NEWS! The key points of the Budget include: National Insurance: Employer NI contributions up to 15% from next April, secondary threshold dropped from ยฃ9,100 to ยฃ5,000 Income Tax, National Insurance or VAT: No increases CGT: Hiked for investors to meet levels for residential property purchases. Inheritance Tax: Extended the current freeze on Inheritance Tax to 2030, with ยฃ325,000 remaining tax free, rising to ยฃ500,000 or ยฃ1m in certain circumstances. Agriculture and business property relief will see first ยฃ1m excluded from IHT. For assets over ยฃ1m there will be a 50% relief with an effective rate of 20%. Corporation Tax: Capped at 27% for duration of the Parliament. Non Doms: Tax regime abolished. Stamp Duty: SDLT second home surcharge up to 5%, to come into effect from 31st October. Housing delivery: ยฃ5bn-plus to build 1.5 million homes. ยฃ500m boost to the Affordable Homes Programme to build up to 5,000 additional affordable homes. ยฃ70m in 2025โ26 to support infrastructure and housing development while boosting natureโs recovery. The Government will set out details of future grant investment beyond the current Affordable Homes Programme at Phase 2 of the Spending Review, to support greater investment in new affordable housing from social housing providers. Investment will run for at least the duration of this Parliament, and will support a mix of tenures, with a focus on delivering homes for social rent. ยฃ56m to unlock more than 2,000 new homes at Liverpool Central Docks ยฃ25m investment in a new joint venture to deliver 3,000 energyโefficient homes across the country, with a target of 100% of these being affordable. ยฃ47m of funding to support the delivery of up to 28,000 homes that would otherwise be stalled due to nutrient neutrality in affected catchments. Right to Buy: Reduced discounts, and local authorities will be allowed to retain receipts from housing sales. Planning: ยฃ46m of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity. Mortgages: Government will engage with industry over the autumn on the Mortgage Guarantee Scheme and plans to make it permanently available to support lending at 95%. The government will bring forward further details in Phase 2 of the Spending Review. Fuel duty frozen Some of the spending allocated is welcome to the NHS, schools and new homes, however – the question we all ask is “how will they deliver on this spending, by when, & can this be achieved? ONLY time will tell! .jpeg?width=550&upscale=true&name=images%20(2).jpeg) โจ What is New: As we were all digesting the budget this week, something big was at work in the background and this is what i wanted to share with you? How much do you know about BRICS? and i don’t mean lego?! The term was originally coined by Goldman Sachs economist Jim OโNeill in a 2001 research paper in which he argued that the growth of what was then the โBRICโ countries (Brazil, Russia, India, and China) was poised to challenge the dominant G7 wealthy economies. 6 key points / Did you know: What is the role of BRICS in today’s world? It provides a platform for solidarity and mutual assistance, allowing member nations to pursue their development goals free from external political interference. In addition to its trade advantages, BRICS also provides members with enhanced mutual investment opportunities. Economic power The BRICS+ group, which includes 10 nations, accounts for 37.3% of the world’s GDP, which is more than half of the EU’s share. The BRICS+ group also accounts for nearly half of the world’s population 28 percent of the world’s economic output and 47 percent of global crude oil. Energy trade The BRICS+ group includes major energy producers and importers. The group is building institutions that will impact energy trade, and more bilateral energy deals are being settled in other currencies. New members On January 1, 2024, BRICS admitted four new members: Egypt, Ethiopia, Iran, and the United Arab Emirates. The group is now known as BRICS+, and is estimated to account for 37.3% of the world’s GDP Increased interest from other countries Several other countries have expressed interest in joining BRICS, including Thailand, Malaysia, and Turkey I will share any updates on the impacts BRICS and how it will impact the UK economy.  ๐ฃ Industry Updates: Reeves scraps British ISA plans The Labour Government confirmed on Wednesday that the annual subscription limit for Individual Savings Accounts (ISAs) will remain frozen until 2030. Hopes of a rise in the ยฃ20,000 allowance for cash ISAs was dashed, but a rumoured lifetime cap of ยฃ500,000 also did not materialise at least. The Chancellor also confirmed Labourโs decision to scrap the British ISA, which had been announced by former Chancellor Jeremy Hunt at the Spring Budget in March. โItโs a relief to see plans for a UK ISA finally dumped on the scrapheap,โ said Susannah Streeter, head of money and markets at Hargreaves Lansdown. City AM Daily Express This is Money Metro Bank pauses asset finance lending The car loans scandal has escalated as Metro Bank temporarily halted its asset finance lending to reassess its systems following a significant Court of Appeal ruling. This judgment raised the standards for disclosing commission arrangements between credit brokers and lenders, leading to several lenders freezing their motor finance operations. Metro Bank stated: “We anticipate lending will recommence very shortly,” after introducing a new commission consent form for brokers. The Financial Conduct Authority’s inquiry into motor finance, covering deals from April 2007 to January 2021, has raised concerns about potential compensation claims amounting to billions. The Times Housebuilders stung by Budget Shares in housebuilders fell on Thursday as investors digested the implications of the Budget. The Chancellor failed to cancel a planned reduction in stamp duty thresholds and increased stamp duty on buy-to-let properties and second homes from 3% to 5%. Notable declines included Bellway, down 7% to ยฃ28.36, and Persimmon, which fell 7.5% to ยฃ14.67. The Times Labourโs Budget will put up the price of a pint by 40p Pubs and restaurant bosses have warned that Labourโs Budget will be โcatastrophicโ for the industry. The combination of hiking the amount employers pay in National Insurance, while reducing the threshold at which it is paid, and increases to the minimum wage and business rates delivers a “crippling hammer blow” to employers, the boss of Fuller’s pub chain said. The Chancellorโs claim that a 1.7% cut in draft duty would lead to the price of a pint falling by a penny was dismissed, with one pub owner explaining that higher employment costs would drive the price up by 40p. Writing in the Scotsman, Mark Kent, the chief executive of the Scotch Whisky Association, says industry feels betrayed about the spirits duty announcement in the UK Budget. BBC News The Scotsman Last-minute rush for property deals The decision by Rachel Reeves to add an additional 2% stamp duty surcharge on second home purchases, raising the total to 5% on top of standard rates, prompted a frantic rush among Central London estate agents to finalise multi-million pound property deals before the midnight deadline. Meanwhile, agents are also expecting a flood of demand from first-time buyers hoping to buy will want to push through purchases in advance of a reduction in the stamp duty threshold from ยฃ450,000 to ยฃ300,000 next April. This will land the average first-time buyer in London with a potential tax increase of ยฃ6,190. The Telegraph reports on buyers forced to drop out of chains because they are using let-to-buy and cannot afford the sudden increase in stamp duty. The Daily Telegraph London Evening Standard Banks spared tax hikes Rachel Reeves has decided not to increase existing taxes on banks or introducing a financial transaction tax after lobbyists warned it could hurt the sectorโs international competitiveness. Britainโs banking sector paid a record ยฃ44.8bn in taxes in 2023/24. UK Finance and TheCityUK have called for an end to the bank levy and corporation tax surcharge altogether, arguing this would bring Britainโs tax rate closer to rival jurisdictions. City AM Labour commits ยฃ5bn for housebuilding programme Rachel Reeves has committed to more than ยฃ5bn of investment in housebuilding over next year, with measures including skills training, reforms to the planning system and additional assistance for affordable housing. An additional ยฃ3bn of support for SMEs and the build-to-rent sector โ in the form of housing guarantee schemes โ was also revealed. Meanwhile, an additional ยฃ46m of funding would be provided to support recruitment and training of 300 graduates and apprentices into local planning authorities. City AM ๐ Business Quote: “Life is not easy for any of us. But what of that? We must have perseverance and above all confidence in ourselves. We must believe that we are gifted for something and that this thing must be attained.” Marie Curie That’s a wrap! I’ll pop over another snippet next week with some more newsworthy information which I hope you find insightful. Before then, if you have any questions, I’d be glad to connect with you to see how we can help you or your clients source the right funding for their current or future plans. Thank you Chris |