Post-Budget Commentary

Richard Cook



The comprehensive Budget ensures support for investors

 

The run up to every Budget provokes speculation, with discussion around this one also fuelled by concerns about Brexit. Subsequently, Chancellor Philip Hammond’s words that the end of austerity is in sight were met with some criticism. But a move to unite the UK is unsurprising as we face further volatility in the run up to leaving the European Union.

As an investment specialist, we were pleased to see that the Budget signalled continued support for tax-efficient investing, along with introducing positive new measures for the housing sector.

 

Enterprise Investment Schemes (EIS)

The Government has strengthened the new knowledge-intensive fund structure around EIS, reflecting its commitment to the start-up, early stage and tech sectors. It plans to implement changes in the Finance Bill of 2019-20 with these to become effective 6 April 2020. The new rules will give funds more time over which to invest and enable investors to set income tax relief against liabilities in the year before the fund closes.

Blackfinch is aligned with the changes through continued investment in these areas. The Blackfinch Ventures EIS Portfolios are focused on the next generation of high growth EIS-qualifying companies. Reflecting our belief in the potential of investments, we commit Blackfinch funds alongside investors.

 

Business Relief (BR)

The Government put its weight behind UK business and specifically small businesses. Measures included £900 million in business rates relief for them; £650 million to bolster high streets; and a business rates bill. This will cut rates by a third over two years for firms with a rateable value of £51,000 or less.

As a provider of BR-focused solutions through our Inheritance Tax and EIS offerings, we also see it as a positive that the Government left BR unchanged following its review. We hope that this indicates the Government’s continued support for BR as a well-established tax solution.

Property

We welcomed clear measures to support the housing sector. These included exemption from stamp duty for first-time buyers of shared equity homes valued up to £500,000. The Government announced £500 million for the Housing Infrastructure Fund plus new partnerships with housing associations in England. This is alongside guarantees of up to £1 billion for smaller house builders.

Blackfinch will continue to support the UK property market as a provider of short-term bridging and development financing solutions. Funding residential and commercial projects across the UK, our terms are flexible relative to mainstream lenders. This includes the ability to lend to first-time developers.

 

Looking forward

Following the Chancellor’s announcements, we can see he delivered a Budget that was comprehensive in its outlook. It can be said to have provided a level of reassurance by addressing the concerns of both businesses and individuals.

Focused on tax-efficient and early stage investing, managed portfolio services and property financing, Blackfinch constantly monitors and adapts to legislative change. We now look forward to the implementation of legislation.

 

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