What can the commercial and specialist lending market expect from the budget
With the budget announcement set for the end of the month, some people are rushing to complete transactions, looking to offload or transfer certain loans and finance arrangements, based on assumptions and reports across the media. Some of which we have all assumed to be fact, whilst others perhaps not. We can only control what is in front of us and appreciate that some of our clients will want to push transactions forward and others would rather wait to see what is announced. Nobody has a crystal ball otherwise we’d all be wealthier, but the Omega team has experienced the impact of countless budgets on the commercial and specialist lending sector. Our relationships with major lenders, strategic partners and various networks across commercial and specialist finance, puts Omega in a strong position to help our clients whatever changes are introduced, but what are we hearing in the marketplace?
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Potential tax changes
We’re only a few months into the new government and like everyone, we have continued to hear constant suggestions of tax rises. Traditionally, the advent of a new parliament is when chancellors implement the biggest changes, and the government has already indicated that this budget needs to fill a £22 billion black hole. The government have ruled out changing corporation tax, VAT, and income tax but the revenue must come from somewhere so it’s possible we will see a range of small measures. Simple maths tells us there will need to be tax increases somewhere as well as cuts on spending to plug the reported financial hole. Some areas where we may see changes are capital gains and inheritance tax along with employer national insurance. At the same time, the government is keen to promote growth, and the general feeling is, that businesses may come out of this budget better than private taxpayers. We shall see…
Expect the unexpected
What we’ve all learned over the years is to expect the unexpected and Rachael Reeves may have one or two surprises up her sleeve. With the cutting of the winter fuel allowance, pensioners will be feeling more than a little concerned about further focus on their income. There are rumblings on the potential new flat rate of tax relief on pension contributions or the introduction of employee national insurance and pensions. It is also possible that the Chancellor may reduce the tax-free sum individuals can access from their pension pot.
Rest assured, we will be ready to adapt to these changes and continue to source suitable debt options to enable our clients to borrow through their pension scheme where appropriate.
Strategy for the Economy
The introducing partners and wealth management networks we support at Omega will be keen to hear the Chancellors statement for the UK economy. It’s a critical moment for the governments’ economic strategy as this budget will set out how they plan to implement this vision. Set against the backdrop of global instability and geopolitics, the market is poised to hear the government’s plans to navigate economically turbulent times. They will no doubt be buoyed by news that GDP rose by 0.2% in August signalling a return to growth proceeded by two months of stagnation in June in July. Growth is still slow however when compared with Q1 and Q2.
How we can help
As commercial finance brokers, our team has many years of experience navigating the highs and lows of economic conditions and there are always finance solutions that work for a variety of situations. This includes supporting transactions needed on a tight deadline, perhaps to complete ahead of new changes coming in, through to discussing the impact on clients’ and businesses’ cashflows and what debt options exist to support varying requirements. The best thing to do is pick up the phone or contact us online and we will always help in any way we can.