July Budget 2015: Are you an entrepreneur, an apprentice or a single parent? What does George Osborne’s statement mean for you?


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.


Catherine’s business will benefit from the reduction in corporation tax rates to 19 per cent from 2017 then 18 per cent from 2020. As Catherine has a number of investment properties, she is likely to be impacted by the restriction of interest relief against her rental income to the basic rate, assuming those properties are mortgaged. Catherine is likely to see her tax liability increase as a result. In addition, if Catherine’s properties are rented out on a furnished basis she may have a larger administration burden as she will no longer be entitled to claim a wear and tear allowance but instead will need to maintain records of actual expenses incurred. The budget also restricted tax relief for pension contributions for those with earnings in excess of £150,000, which may limit the relief Catherine can save in her pension. She is likely to benefit in due course from the Inheritance tax main residence nil rate band of £125,000.


Alistair Franke, 21
Higher Apprentice in Forensic Services, PwC

Alistair is living at home with parents to whom he pays a small amount of rent, and commutes to central London by train on a daily basis. On a salary of £24,000 a year, he is saving with the view to acquiring a buy-to-let property. He has a car which he uses mainly at the weekends, and has a fairly sociable lifestyle; going out to eat/drink on average twice a week.


As a basic rate taxpayer, Alistair will benefit from the increase in the personal allowance from £10,600 in 2015/16 to £11,000 in 2016/17 giving him more disposable income to fund his sociable lifestyle. Alistair is looking to purchase a buy-to-let property. While he remains a basic rate taxpayer Alistair will not be affected by the restriction of finance relief to basic rate, however, he could be affected if his salary increases. In addition, Alistair’s parents may benefit from the increased annual rent-a-room relief from £4,250 to £7,500 in respect of the annual rent received from Alistair.


Kristo Kaarmann, 35
Co-founder of TransferWise, a peer-to-peer international money transfer business

Kristo’s firm is just over four years old and has attracted $91m of investment from venture capital and private investors. Kristo employs over 65 people in the UK and a further 285 across offices in New York, Tampa, Tallinn and Cherkassy. He travels overseas twice a month to visit international offices and the firm’s US investors. Kristo owns property in Tallinn, Estonia, but rents in London. He cycles to work, and doesn’t have a pension.


If Kristo is a non-UK domiciled individual claiming the remittance basis of taxation he should be aware that if he has been in the UK for more than 15 of the previous 20 tax years at 6 April 2017 he will be liable to pay UK tax on all his worldwide income and gains. From April 2017 he will not be able to benefit from the remittance basis of taxation. In addition, his worldwide assets (including his property in Tallinn, Estonia) would fall within his UK inheritance tax net.


Oliver Pugh, 27
Founder of snack box service EarlyBird

Oliver’s business is over twelve months old and has attracted £300,000 worth of investment. The business is currently growing at 100 per cent month-on-month and predicts year one revenues of £544,000. It currently employs eight people across two sites 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 he takes a salary of £24,000 with no pension.


Oliver currently draws a small salary from his business which is subject to income tax and national insurance and will therefore benefit from the increase in the personal allowance. Oliver may also be able to benefit from the introduction of the £5,000 dividend tax-free allowance. In addition, Oliver’s business will benefit from the increased Employment Allowance, from £2,000 to £3,000, the reduction in corporation tax rates, and the increase in the Annual Investment Allowance, which gives full tax relief on the first £200,000 of qualifying expenditure.


Iona Wright, 27
Associate, Norton Rose Fulbright

Iona has been working at Norton Rose Fulbright LLP for more than 4.5 years in total and has been a qualified lawyer for 2.5 years. She is a mid-level Associate, recently promoted. She trained at the firm, but has also been on secondment to a client as a qualified lawyer. She is 27 and rents an apartment in Angel by herself.


The budget should not have too much effect on Iona. As a higher rate taxpayer, she will benefit due to the increase in the personal allowance and the higher rate threshold, which are offset by changes to the national insurance upper earnings limit. These changes together should give her an increase in her disposable income of around £150 per year. If she is saving for a house she will benefit from the proposed personal savings allowance, to be introduced from April 2016, which will save her up to £200 income tax on her bank interest. Iona may also benefit from the help-to-buy ISA if she is considering purchasing her first property. 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 an additional £2,500 provided the monies are used towards a property.

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