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Deepbridge Post Budget Webinar

News & Politics


Introduction

Introduction

Welcome to the Deepbridge Post Budget Webinar! Today, we gathered to discuss the recent budget announcements, their implications on financial planning, and how they might affect investors, especially those involved with products like Business Relief (BR), Enterprise Investment Schemes (EIS), and Seed Enterprise Investment Schemes (SEIS).

Meet Your Hosts

Olivia Jenan

I'm Olivia Jenan, but you can all call me Liv. I'm the Marketing Director at Deepbridge, and my role centers around educating advisors about financial products, particularly in the realm of tax-efficient investments. I was incredibly excited about this budget and couldn't sleep on Tuesday night in anticipation.

Andrew Aldridge

Hi everyone, I’m Andrew Aldridge, Chief Marketing Officer and partner at Deepbridge. I also serve as a board member of the EIS Association, which gives me a unique perspective on the regulations surrounding EIS and the venture capital world.

The Budget Overview

As we delve into the announcements, we aim to provide an initial reaction to the budget. We understand many of you may have clients invested in various products, or perhaps you’re exploring these products to add to your investment portfolio. Over the next week, we'll learn more about the finer details of the budget and how they may impact our industry.

Feel free to engage with us through the Q&A function available on your screen, where we’ll answer your questions either live or afterward.

Key Takeaways from the Budget

Andrew shared his insights, noting that the budget had a sense of political posturing rather than showcasing a significant shift in economic direction. It's worth noting that this is the first Labour government budget in a long time, suggesting a renewed focus on government spending, particularly in sectors like infrastructure and the NHS.

A few notable highlights included:

  • The introduction of 5,000 new HMRC compliance jobs—a clear sign of increased taxation priorities.
  • Infrastructure projects and funding for healthcare, which imply a tax increase is necessary to sustain these initiatives.

Pleased Aspects of the Budget

From the perspective of business relief and investment schemes, Andrew found the continuation of EIS and SEIS particularly positive. EIS was extended for another ten years, which is encouraging news for investors and advisors.

Concerning business relief, there were only modest changes, ensuring that the majority of existing investments remain intact. Specifically, the introduction of a £1 million business relief allowance was introduced, with a 50% IHT exemption for any investments beyond this threshold.

However, we also discussed the looming inclusion of inherited pensions in IHT from April 2027, which adds a layer of complexity to estate planning.

Capital Gains Tax (CGT) Insights

CGT changes were another primary discussion point. While it was anticipated that CGT rates would rise possibly to income tax levels, the government opted for a more measured approach, increasing the tax from 20% to 24%. This is positive for EIS and SEIS, as they offer potential tax reliefs that can mitigate the impacts of CGT.

Impacts on Employers and Businesses

As the budget involves various tax increases, the impact on employers is likely to be significant. Employers need to consider how new Employer National Insurance contributions will affect their financial abilities to recruit, provide raises, and invest in their workforce.

The introduction of a small business allowance for up to four employees was seen as a proactive support measure but still presents challenges as companies grow.

Conclusion

In summary, while the budget contained various tax increases, it also reaffirmed the importance of investment schemes such as EIS and SEIS. As the financial landscape shifts, advisors will have new opportunities to discuss planning strategies with clients.

Thank you all for joining us today, and we encourage you to reach out with any follow-up questions or discussions about the implications of this budget.


Keywords

  • Deepbridge
  • Post Budget
  • Webinar
  • Andrew Aldridge
  • Olivia Jenan
  • Enterprise Investment Scheme (EIS)
  • Seed Enterprise Investment Scheme (SEIS)
  • Business Relief (BR)
  • Inheritance Tax (IHT)
  • Capital Gains Tax (CGT)
  • National Insurance
  • Financial Planning

FAQ

Q1: What are the key impacts on the budget for businesses?
A1: The budget has introduced increased Employer National Insurance contributions, which will significantly affect the financial capabilities of employers to recruit and pay staff.

Q2: What changes were made regarding Enterprise and Seed Enterprise Investment Schemes?
A2: EIS and SEIS were extended for another ten years, and opportunities for tax reliefs remain popular for investors.

Q3: How does the inclusion of inherited pensions in IHT from 2027 affect clients?
A3: The anticipation of higher tax responsibilities will increase the need for advisors to consider alternate investment strategies, such as Business Relief, for wealth and estate planning.

Q4: What is the significance of the £1 million BR allowance announced in the budget?
A4: This allows individuals to have a 100% IHT exemption on the first £1 million of qualifying business assets, with any amount over that subject to a 50% relief.

Q5: How does the increase in CGT rates affect EIS and SEIS?
A5: EIS allows for deferring CGT liabilities and SEIS offers a 50% exemption, making them advantageous for mitigating the increased tax burden.