www.ten-percent.co.uk – Legal Recruitment Consultants
What an amazing budget – I predict pictures of axes on the front of the Daily Mirror and the Sun tomorrow.. More liberal/left wing commentators will say that lower income families have been protected by the Liberal Democrats but middle income families have been hit quite hard, and more right wing observers will applaud the move to get rid of a lot of unnecessary left wing initiatives and benefits..
Highlights:
20% VAT (to start 4th January 2011)
no increase in tax on alcohol, tobacco and fuel.
Child benefit frozen for three years
Cuts to family tax credits removing those above £50,000.
Corporation tax cut to 24%
Small business tax cut to 20%
Income tax allowance increased by £1,000
Two year council tax freeze
Capital Gains Tax increased to 28% for high income tax payers.
Employers NI tax holiday for job creation in the regions
Acceleration in state pension age to 66 years.
Two year pay freeze for public servants paid over £21,000.
Housing benefit – paid up to £400 per week max.
Bank levy to be imposed.
Government departments to be cut by 25% over 4 years.
Forecasts:
Unemployment to fall for the next 4 years after 2010.
Growth forecast to be 1.2 % this year, 2.6% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and in 2015.
Not certain yet what effect the above will have on anyone, except that small businesses will be very pleased to see the small business tax levels drop to 20%, but no-one will be overjoyed to see the VAT increase to 20%.
CGT increases as well may have implications for any senior partners looking to sell their practices over the next few years, and the state pension age acceleration is going to result in more people needing to work longer, particularly following the recent few years.
I suspect rather a lot of newspapers will be disappointed at the housing benefit restriction as the benefit has been responsible for lots of fascinating stories about claimants living in London mansions and driving convertibles……
Public sector cuts are going to hurt some law firms more than others, and similarly with legal recruitment agencies. Ten-Percent Legal Recruitment have never quite managed to get a foot into this lucrative trade, but plenty of other agencies have established whole departments around it. I suspect a couple of larger regional law firms across the UK may well be laying off some of their specialist public sector lawyers in the next few months…
Jonathan Fagan, MD, Ten-Percent Legal Recruitment – www.ten-percent.co.uk