The big question... What did you think of the budget?

Steve Matthews, commercial director, Centric Recruitment, Gwent

The budget was certainly one centred around making work pay, which is the right thing for both employers and employees. We need a strong and productive workforce to support our public and private sector businesses. These are the corner stone of our economy and encouraging employment and growth in them is to be welcomed. The increasing of the personal allowance will again give people extra resources, as too will the introduction of a living wage. It is important however that businesses are supported with this increase in the minimum wage. Only be having strong, profitable businesses will they be able to implement these increases. Employers should not be put at risk, but instead supported with further improvements to the financial resources available through the banking sector to grow their companies. In doing so they are able to build strong foundations to support the governments pay changes from. The freezing of fuel duty will support some of them, but we would like to see further steps taken in the support and investments available to both SMEs and larger corporate scale businesses.

Andy Wilkins, CEO, Plutus Health, Newport

The big issue for us is the hike in Insurance Premium Tax from six per cent to 9.5 per cent. We absorbed the last small increase and made no increases in premiums, but this extra amount will cost us tens of thousands extra. As a not for profit business this will hit us very hard and we will need to carefully consider how we deal with this looking forward.

Stephen Parry-Langdon, finance manager, HardingEvans Solicitors, Newport

A lot has already been said and written about Mr Osborne’s headline-grabbing change to the national minimum wage and the cuts in welfare – and there will be many more column inches written over the months and years to come – but, as with most budgets, the devil is in the detail. For example, the cost to employers of the increase in the NMW is to be offset by a cut in the rate of corporation tax - all well and good for limited companies but what about the very many sole traders and traditional partnerships - so important to the Welsh economy - whose profits are subject to income tax? There’s no compensatory cut in the tax rate for those businesses. And for those small businesses which have incorporated, there’s a raid on their owners’ income where it’s paid through dividends, with a new restriction being placed on the amount of exempt dividend income. Then when you add in the hike in Insurance Premium Tax – 3.5 per cent extra cost – then ordinary business costs such as Employer’s and Public Liability insurance, premises insurance, vehicle and plant insurance, these are all going to increase significantly. A budget is often about smoke and mirrors, and, judging by the headlines, George Osborne appears to have successfully hidden a budget that is likely to hurt his traditional friends, the business community.

Matthew Bird, independent financial planner, Seer Green Financial Planning, Newport

There were some interesting announcements with the compulsory living wage of £7.20 rising to £9 by 2020 being a very hot topic. No doubt this will frustrate some business which are already struggling to break even, especially as over a similar time frame they will be expected to set up pension schemes for all eligible employees and make compulsory contributions. However, the announced cut in corporation tax rate may sweeten the blow slightly. Reducing the bank levy seems to be a reaction to HSBC's announcement that it was planning to move its headquarters out of the UK, although banks are unlikely to be pleased about a new tax on profits of eight per cent (on top of standard rates). Bank shares aside from Barclays are all down slightly on the news. Inheritance Tax allowance being raised by £175m per person by 2017 will certainly help the middle classes who increasingly have been finding themselves with a potential tax liability caused primarily by their spiralling house prices. Radical 'Isa-style Pension' reforms have been mentioned but no real details given yet, although this indicates a big change to the tax relief available to contributions. Additional rate taxpayers will have their annual pension allowance tapered away from £40,000 to £10,000. Dividend tax rates effectively going from zero per cent for basic rate taxpayers to 7.5 per cent subject to a tax free allowance of £5,000 may also be dampened slightly by Corporation Tax cuts. Changes to tax relief on Buy To Let mortgages will dramatically affect the viability of Buy To Let investments for higher earners, as going forward they will only be eligible for relief at basic rate (only 20 per cent).

Stephen Williams, founding and senior partner, Kilsby & Williams, Newport

One of the most welcome and surprising moves is the reduction in corporation tax to 19 per cent in 2017 with a further reduction to 18 per cent by 2020. This will benefit many local businesses and should make the UK a highly attractive location for foreign investment. The announcement that the annual investment allowance will be set at £200,000 permanently from January 2016 is further good news for businesses which were expecting the AIA to be reduced to £25,000. Less welcome is the statement that corporation tax relief for business goodwill amortisation will be restricted. From a personal tax perspective, the small increases in the personal allowance and higher rate tax threshold were expected, as was the restriction of pensions tax relief for those with income of more than £150,000. The new allowance to increase the inheritance tax threshold where a residence is passed on death is also old news now, having been announced in the press over the weekend. Based on the details provided in the budget, it should be possible to pass on estates worth up to £1,000,000 free of inheritance tax from 2020-21 onwards. Unexpected changes include the abolition of the dividend tax credit. The new system of taxing dividends is likely to increase the tax paid by individual shareholders. The chancellor’s continued commitment to clamping down on tax evasion and aggressive tax avoidance will match the public mood. Overall, this is a budget with some surprises but no radical tax reform.

Phil Morris, director, Made in Wales, New Tredegar

This was a budget of both pros and cons for me – a bit double-edged really. I see positives in both the new £5,000 tax-free dividend allowance, as well as the increase in Employment Allowance which will reduce National Insurance bills. In principle, I would of course love to be able to pay my staff more, but as a small business with 22 employees, it’s just not feasible to implement without making other changes. This could, for example, mean a rise in the prices we’re charging our consumers – I’m proud to say we’ve managed not to do this in the seven years I’ve had the company, and that has kept us both competitive and my workforce secure which is so important to me. I’m interested to see where the government sees this shortfall coming from.