Today's budget announcement has all the hallmarks of a government firmly thinking about the next general election, says Paislei Godley, senior tax manager here at Prime Accountants Group.
Paislei believes that while the announcement has some good foundations which should be broadly welcomed, the benefits may not be felt for some time, posing the question of whether they will still be implemented if there is a change in government when the country next goes to the polls.
Childcare
The headline-grabber is the expansion of free childcare to 30 hours per week, however, this will only be fully-implemented by September 2025, by which time the government will have to hold a general election.
Paislei said: The expansion of free childcare is an interesting one. Encouraging people back to work is great but it is not as straightforward as that, as the infrastructure within the childcare sector isn't ready as there are not enough childminders, hence why it is a long-term plan.
Pensions
Meanwhile, keeping people in employment was also a theme to Jeremy Hunt's budget, and the announcement that the lifetime allowance on tax-free pension contributions is being scrapped, which is currently £1.07m, is good news.
There was also the welcome news that the tax-free yearly allowance for pension pots is to rise from £40,000 to £60,000.
Paislei said: Keeping people in work, rather than retiring, is being encouraged by these pension announcements, particularly abolishing the lifetime allowance on tax-free pension contributions, and we welcome them.
Corporation tax
However, for businesses there was disappointment that the government is pressing ahead with its corporation tax increase from 19 per cent to 25 per cent, although it is encouraging to see the Chancellor's announcement on full capital expensing on IT, plant and machinery for the next three years to replace the super deduction.
Paislei added: The details have yet to be seen but this announcement does provide a glimmer of hope to businesses, many of whom are still struggling to stay afloat.
Investment
There was also some positive news for 12 regions, including the West Midlands, which have been earmarked as investment zones, receiving £80 million each over the next five years, although Paislei raised the concern that, again, plans span the next general election.
Paislei's impression of the budget, from her expert tax point of view, was that it wasn't a particularly exciting one, with no major cuts in taxes being announced, and nothing being announced that they weren't expecting.
Paislei concluded: As mentioned, some of the major announcements in this budget have long-term aspirations, which begs the question of how many will actually stay the course of time.
Prime Accountants Group has announced Morgan Davies as our new managing director, succeeding the long-serving Kevin Johns.
Morgan formally takes over the role on September 1 as part of our advanced succession planning, which has been taking place behind the scenes for some time.
Kevin Johns
Kevin has worked for Prime for 31 years and has been its managing director since 2015.
As well as holding the positions of Solihull BID chairman and vice-president of the Solihull Chamber of Commerce, Kevin has spearheaded Prime’s fundraising efforts, which have seen the business raise tens of thousands of pounds for charities such as Solihull Life Opportunities (SoLO) and Birmingham Children’s Hospital.
Morgan Davies
Morgan is one of the four original founding partners of Prime from 2007 and steps up from his role as director overseeing our audit and accounts department.
While Kevin is stepping down as managing director, he will continue to work with his portfolio of clients and remains on the senior leadership team.
To facilitate Morgan taking on his new role, fellow directors Jeremy Kitson and Paul Guise will take over his responsibility for audit and accounts.
Succession Planning
Kevin, who was awarded a British Empire Medal (BEM) in the New Year’s Honours list in 2019 for services to Solihull, said: “I’ve planned to gradually retire over the next few years, so handing over to Morgan now means we will have a far more controlled and better transition.
“I’ll still be part of the leadership team, I’m still looking after my clients but I just won’t be leading on the day-to-day anymore.
“I said when we marked my 30th anniversary with Prime that I’ve been leaving for a long time! This is long-term succession planning and a natural progression in any business. I’m passing the baton to someone in Morgan who is exceptionally capable and well-positioned to keep the firm on exactly the right path.”
The promotion comes in a milestone year for Morgan, who has worked for the firm for 20 years and has been in practice for 30 years.
He said: “This is part of a succession plan we have worked hard on. I’ve been audit and accounts lead ever since I’ve been here at Prime, which is effectively half the firm, as well as being part of the senior leadership team.
“The experience that gives you is seeing every element of the business up close. It’s a natural fit, we work closely together and I have supported Kev for years.
“The culture of this company is to develop people and empower them to succeed and grow, and this demonstrates that with aplomb. As I move up to managing director, two very capable directors in Paul and Jeremy move up to audit and accounts – it’s good for everyone within the pyramid at Prime.”
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