This year's pre-Budget speculation was focused mostly on how the Chancellor would pay for the expected increased expenditure on the National Health Service. National Insurance was a big favourite and those who "backed" this were proved substantially right. But it was not just National Insurance changes that the Chancellor told us about. What follows are the main changes proposed that we believe will be of greatest interest to financial advisers:
- Increases to National Insurance from 2003 across the board -
including a 1% rate for employers, employees and the self-employed without limit on all earnings above the upper limits
Despite the apparently comparatively “simple” nature of the proposed Budget changes, taxation as always is a subject that attracts much interest and having a good understanding of proposed changes to the system is essential to any person or business developing financial products or delivering financial solutions. In the light of this it is important, in our view, to ensure that you are equipped to have sensible discussions with your key clients and distributors (as appropriate) on key taxation issues.
We believe that, even where taxation changes have not been made, there is still merit in using the Budget (and the national "tax advertising campaign" that surrounds it) as a catalyst for reviewing the affairs of clients with a view to improving their tax and financial wellbeing. At a time when there is significant competition to provide financial services to clients, we hope and trust that this Budget Bulletin will help you to do so in a way that will strengthen your relationship with them, enable you to create new business relationships with new business clients and to deliver more effective solutions.
The aims of this Budget Bulletin are:-
- to explain the Chancellor's main proposals
- to identify what those proposals mean
- to review the tax system as it is and will be for the remainder of this tax year
- to look ahead, where appropriate, to known or likely future changes in taxation
- to consider the significant changes to taxation that, whilst not proposed in this Budget, will come into effect shortly, and
All the information and views given in this Bulletin are presented for general consideration only. Accordingly, Technical Connection can accept no responsibility for any loss occasioned as a result of any action taken or refrained from as a result of the contents hereof. Readers and clients of readers must always seek independent advice before taking or refraining from taking any action.
The contents of this Budget Bulletin are based on the proposals put forward by the Chancellor in his Budget speech. These need to be approached with caution as the details may change during the passage of the Finance Bill through Parliament.