Blue Tulip   
Wealth Management
Est. 2020

The Budget​,
first impressions

To say Labour's first budget in 14 years has caused much debate and controversy would be an understatement. 

The Government came into ofice promising to prioritise growth, but in reality their first Budget has placed heavier burdens on business and increased borrowing for public sector spending, this appears to be quite a gamble that only time will tell if it pays off.

​

As expected, Labour has increased the minimum wage and closed the gap of minimum wage between those 18-20 and over-21s which marked the first step towards a single rate for all adults.

This will of course benefit those on a wage below the new minimum thresholds, increasing their take home, but these fairly large increases could harm smaller businesses to the point of offering fewer jobs and/or hours or even force closure,

The government are making four changes to employer National Insurance contributions (NICs), all of which take effect at the start of the next tax year (06/04/2025).

1. Reducing the secondary Class 1 National Insurance (employer) threshold from £9,100 to £5,000 per annum

2. Increasing the main rate of secondary Class 1 National Insurance (employer) contributions from 13.8% to 15%

3. Class 1A and Class 1B employer rates, which apply to taxable benefits-in-kind, will also increase in line with the above

4. Increasing the Employment Allowance in two ways. All employers will be able to claim it with the amount each employer can save rising to  £10,500.

​

​

It is difficult to argue for the above whilst claiming growth is the forefront of their aims, with the government putting an awful lot of faith in its ability to choose then deliver public sector capital projects that deliver meaningful economic benefits.

How many outside of Whitehall that shares this optimism is likely to be low, time will tell if this budget delivers its aims.

​