UK Chancellor George Osborne used the first Conservative budget in 18 years to announce radical changes to the country’s work and welfare system.
With the nation in the midst of economic recovery – and a new Government recently elected – this was deemed the time to take ‘difficult decisions’.
“Taxes are usually increased after elections – so it’s interesting that taxes for working people have been reduced,” says HCR managing director Rob Dolbear. “But the reasoning behind these changes makes a lot of sense.
“Unfortunately, sourcing the finances to fund these cuts means reducing the amount many people are able to claim on benefits. The plan is to try and persuade more people into work – and I think the fact that employees can now earn more than £10,600 – £11,000 from next year – without paying any income tax at all, could go some way to achieving that.
“There are further measures businesses can take to bring the unemployed into the workplace though. Many more firms are entering into apprenticeship schemes, helping workers (young and old) to learn ‘on the job’. This budget unveiled plans to take apprenticeships from two million up to a possible three million. And firms offering such schemes will be offered further incentives to encourage young people into work and training.
“Some companies also get involved in mentoring – bringing young or disadvantaged people into the workplace and equipping them with the skills they need to find and then hold down a job.
“Learning how to behave in interviews, how to dress – and the importance of turning up to work on time – is crucial. But it’s surprising how many just don’t possess these basic skills. I see initiatives encouraging employers to take part in these schemes increasing in future years.
“A national living wage has also been created. From next year, this will stand at £7.20 per hour – rising to £9 by 2020. Some suggest this could place a bigger burden on businesses – but it’s a level playing field. And a reduction in the national insurance to be paid by employers – and corporation tax falling to 18 percent by 2018 – should go some way to relieving this.
“So, employment is on the rise and the deficit is falling. But what about the property market?
“Help to Buy has provided an excellent opportunity for those who wish to take their first steps onto the housing ladder but who are unable to save enough for a deposit.
“George Osborne introduced the Help to Buy ISA back in the last budget – and this still remains. It provides a little extra help for those able to save over a five year period. Effectively, the state will pay £50 for every £200 saved towards a deposit of up to £15,000.
“Those wishing to rent out properties, by taking advantage of buy-to-let mortgages, will notice changes introduced in this emergency budget.
“Mortgage interest relief on residential properties will be cut to the basic rate of income tax, which currently stands at 20 percent. This means it’s even more important, within our industry, that landlords work closely with relocation firms like HCR when deciding upon rent charges.
“Getting the most out of property assets must be balanced with the needs and requirements of clients wishing to place employees into corporate homes – but our specialists are very well placed to understand the needs of both our suppliers and customers.
“This has been described as a ‘landmark budget’ – with a whole range of measures designed to help people into work and to continue the country’s economic recovery.
“Whatever the situation, it is our business to keep abreast of changes and opportunities. Our team of specialists is standing by to provide advice and information about relocation – whatever this and future budgets may bring.”