Osborne takes squeeze off middle class workers

The big news items from a financial services point of view with regard to the budget are that firstly the Chancellor has cut capital gains tax from 28 per cent to 20 per cent for higher rate tax payers.

Friday, 18th March 2016, 2:56 pm
Updated Friday, 18th March 2016, 4:27 pm
George Osborne's budget offered a few headlines for the financial services sector

Also he has reduced the level for basic rate tax payers from 18 per cent to 10 per cent.

But Chancellor Osborne continues to make life difficult for buy to let landlords as he has excluded them from this rate cut.

It appears that by doing this he is trying to appeal to the enterprise economy, encouraging people to buy shares or invest in businesses.

This change I believe will be a nod towards the older generation who have tended to build up assets over time that they may wish to sell, but have previously been put off from doing this because of the high rate of capital gains tax they would have had to pay.

Also on the personal tax front the Chancellor has extended the threshold for higher rate tax from £42,000 to £45,000 which is the biggest rise in nearly 30 years.

This takes effect from 17th April with personal allowances also increasing from £11,000 to £11,500.

I believe the personal tax changes have been designed for middle class workers who have been squeezed in recent years bearing the brunt of the financial crisis with regard to paying tax.

To further appeal to savers the ISA allowance will increase from £15,240 per person to £20,000 from next April with a new type of ISA called a lifetime ISA for younger savers with tax relief on it being launched at the same time.

Overall I believe that this 2016 budget is trying to appeal to all age ranges with what appears to be a savers budget.

To help pay for this he has hit big businesses, potential tax avoiders and fizzy drinks in what looks like a neutral budget.