Following the Chancellor’s Budget, Paul Dixon, a senior manager at PricewaterhouseCoopers, and senior tax manager David Hammal give their reaction to the details contained in the report

PAUL DIXON

The Northern Echo:

THE Chancellor characterised his Budget proposals as a blueprint for an Aspiration Nation, in which those who wished to get a job, own a home and get on in life would receive Government help to do this.

He acknowledged that the recession has been difficult for hard-pressed families and warned of difficult times ahead with further Eurozone instability.

His speech highlighted a number of proposals designed to help families and the lowpaid.

The intended increase in the income tax personal allowance to £10,000 has been brought forward to April 2014 and help with childcare costs will be introduced from Autumn 2015, giving up to £1,200 per qualifying child.

Benefit from the childcare subsidy will take time to filter through, as payments will initially be restricted to children under five years, with the age limit being progressively increased to 12 years over a period of time.

The subsidy will be calculated as 20 per cent of actual childcare costs incurred up to a maximum of £6,000 per child. Other provisions such as the scrapping of the fuel escalator and the removal/ reduction of certain alcohol duties will be welcome, but likely to provide only limited savings.

The Chancellor also highlighted the difficulty of people getting on and moving up the housing ladder and the particular problem of high deposits being needed to secure a mortgage.

His proposal widens and extends the existing Help to Buy scheme so that all potential buyers, not just first-time buyers, potentially benefit.

The enhanced scheme requires a five per cent deposit from the purchaser with a further 20 per cent added via an initially interest-free loan, for the first five years, from the Government.

It will only be repayable on the sale of the property.

The scheme is open to all purchasers of new homes with a value of £600,000 or less.

The Government’s mortgage guarantee scheme is also available for high loan-tovalue mortgages (80 to 95 per cent) for new and secondhand homes.

Measures were included aimed at stimulating employment, covering increased infrastructure spending over the next five years, employers’ National Insurance subsidies, increased research allowances and employee shareholder tax breaks.

This, combined with the devolution of spending decisions to the regions following the Heseltine report, should help to create jobs in the North-East.

DAVID HAMMAL

The Northern Echo:

ALTHOUGH it was never going to be a giveaway Budget – indeed, the Chancellor admitted that it had to be fiscally neutral – Mr Osborne’s fourth Budget contained some good news for our local business community.

For the region’s small businesses, there has been a welcome announcement of an exemption for the first £2,000 of employer’s National Insurance contributions.

This will prove a relief to hard-pressed small businesses that are struggling in the face of economic challenges, as well as being an incentive for those thinking of taking the plunge by being their own boss.

The construction industry has borne much of the brunt of the recession, and the latest idea to restart this moribund sector is through the Help to Buy and Mortgage Guarantee schemes.

In applying to all house buyers, not just first-time buyers, these initiatives go much further than previous schemes and for the sake of the region’s housebuilders, and the construction workers they employ, we have to hope it will succeed.

All businesses are affected by the cost of petrol and diesel – whether it is the cost of getting to clients, the cost of delivery of raw materials or, indeed, the cost of the raw materials themselves.

The Government’s announcement that the proposed increase in fuel duty in September is to be scrapped will certainly help keep these costs down, but given recent price rises, it is doubtful how much relief businesses will actually feel.

A continuing theme through all of the Coalition’s Budgets has been the promotion of high-technology businesses.

The introduction of the ten per cent Patent Box next month is supplemented by an increase in the tax rebate for R&D expenditure to ten per cent of the amount spent.

Keeping competitive with the emerging economies has to be supported.