What does the chancellor’s Budget mean for you? From the single parent to the startup founder

THE SINGLE PARENT


Catherine Gannon, 51
Managing partner at law firm Gannons

Gannons Commercial Law continues to do well, with profits and earnings up on last year. Catherine is commercially savvy and has restructured the business from an LLP to a limited company, illustrating that she is a smart operator in a segmented legal market. Catherine lives with two children, aged 12 and 14, in a home with a mortgage and holds several investment properties.
BDO’s BUDGET TEAM SAYS:
The major announcement which will be of interest to Catherine is around the government consulting on a shake up on business rates and the abolition of the annual tax return. Both measures could reduce the time and cost of doing business and provide Catherine’s business with more funds for re-investment and growth. On a personal tax note it will be interesting to see how the abolition of the tax return will work for Catherine’s rental properties, as it is presumed this information will still need to be reported in some form to HMRC.

THE ENTREPRENEUR


Kristo Kaarmann, 34
Co-founder of TransferWise, a peer-to-peer international money transfer business, in Shoreditch

Kristo’s business is just over three years old. It has attracted $91m of investment from venture capital and private investor, and is growing at 10-15 per cent a month. It now employs 50 people in the UK and 250 more around the world. Kristo travels overseas twice a month to visit international offices as well as the firm’s US investors. He owns property in Tallinn, Estonia, but rents in London. Kristo cycles to work and takes a salary of £35,000, and he doesn’t have a pension.
BDO’s BUDGET TEAM SAYS:
The Budget 2015 is a mixed bag for Kristo. The abolishment of employer NICs on payments to apprentices under the age of 25 will help to reduce his business costs and provide more incentive to recruit new staff under an apprenticeship scheme. However, the government is cracking down on international enterprises diverting profits from the UK which will increase costs for Kristo as he will be required to provide country-by-country reporting to the UK authorities on his activities overseas.

THE FAMILY MAN


Martin Winter, 59
Partner, Taylor Wessing

Martin, a keen runner, lives in Wandsworth with his wife in a home they own outright. They have a 24-year-old son doing an MBA in the US on a waterskiing scholarship, and a daughter who works in marketing. Martin saves through Isas and EIS. Taylor Wessing recorded average earnings per partner of £657,000 last year.
BDO’s BUDGET TEAM SAYS:
There are no big giveaways for Martin in this year’s Budget. As an additional rate income tax payer he will not see any benefit from the increase in the personal allowance. The chancellor is reducing the pension lifetime allowance from £1.25m to £1m from April 2016. If affected, Martin will need to speak to his pensions’ adviser as soon as possible as he is approaching retirement age. He will be pleased that the chancellor announced no further cuts to the current pensions annual allowance, so Martin will still receive tax relief on his contributions each year, provided his pension pot is below the lifetime limit.

THE APPRENTICE LIVING AT HOME


Hannah Bufton, 19
Higher apprentice, PwC

Hannah is currently living with her parents while saving for a deposit for a flat. She earns a salary of £23,750. Hannah travels to work on the train and drives at the weekends. She also enjoys a glass of wine.
BDO’s BUDGET TEAM SAYS:
Hannah is a definite winner from this year’s Budget. The announcements in George Osborne’s Budget around increasing the personal allowance to £10,600 for 2015/16, then to £10,800 the year after and £11,000 the year after, will directly benefit Hannah providing her with more disposable income. The help-to-buy ISA will be of particular interest to Hannah when she is looking to buy her first house but not for people looking to rent. Under this scheme, the Government will pay a bonus of 25 per cent of the amount saved, so a £10,000 ISA will benefit from a top up of £2,500 providing it is used as a deposit on a house purchase. The freezing of the duty on wine, although keeping costs the same, will effectively be a cut when taking inflation into account. Hannah will also obtain some benefit from the freezing of fuel duty, which the government has estimated will save average motorists £675 by the end of 2015/6. However, as she only drives at weekends this saving will be limited.

THE STARTUP FOUNDER


Oliver Pugh, 27
Founder of snack box service EarlyBird

Oliver’s business is around eight months old. It has attracted £84,000 worth of investment via the crowdfunding platform Crowdcube. The business currently predicts year one revenues of £321,949. It currently employs four people and will look to grow this over the next 12 months. Oliver lives with his girlfriend in a rented flat in London. He drinks socially, but does not smoke. His savings have all been invested in EarlyBird, and from January 2015 Oliver has taken a salary of £24,000 with no pension.
BDO’s BUDGET TEAM SAYS:
Oliver is another winner in this year’s Budget, as a small business owner. The small business rate consultation and abolition of employer NICs for apprentices under 25 will provide incentives to enable his business to grow. As Oliver takes a small salary from the business, he will personally benefit from the increase in the personal allowance over the next three years. He will also benefit from the £1,000 personal savings allowance, provided he continues to draw a salary which keeps him under the higher rate income tax threshold.

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