But it’s just really not the vibe we’re all needing right now. They should maybe look to move the Budget to the summer months, when we’re all a bit less fatigued by life in general, and some of the less palatable stuff might land a bit better. Yes, I know that means that practically they wouldn’t have the full year accurate figures to hand. But if the last few years have taught us anything, it’s that the figures are all just pie in the sky anyway - so I can’t see that it would make much difference.
Anyway, I’m not going to repeat all the details of the Budget here as I have no doubt you’ve heard / read / seen it 50 times over by now. If you did want a bit more technical content on it, we've shared our
immediate reflections, and you can also
join our webinar alongside the tech-tastic M&G peeps on Tuesday.
What I am going to focus on is the impact of it as a business owner. This comes from a number of angles:
-
Generally as a business owner, there’s the implications for your future plans, your hires, your growth prospects. The employers NI increase this year took a solid £80k out of our profits. Which comes directly out of the profits I am able to distribute as a dividend to the team. And that’s an ongoing thing; every year, I have less to distribute as dividends, and less to put into departmental budgets, as more of it goes to the government. I have no issue with paying tax and contributing fairly, but money doesn’t come from nowhere and every additional penny that goes back to the Treasury is directly taken away from my team. Which is a tough pill to swallow.
-
Departmental budgets being restricted also puts a literal, and emotional, limit on growth plans. You want to be full of gusto and enthusiasm and ceiling smashing plans for 2026. But it’s hard to do when everything feels pinched and tight and you know all your clients are feeling it too.
-
There’s then the angle of being a business owner at an advice firm. There are a lot of additional conversations advisers need to be having with clients right now and additional questions to be asked. So many of the changes (announced in 2024’s Budget as well as this week’s) are being phased in over coming years. So there’s a real need to tease out people’s plans, overlay them with the proposed changes, and then overlay all of that with the unpredictability of life. As a business owner, how do you ensure all of this is communicated? Everyone’s knowledge is up to date? All advisers are asking all clients the right questions?
-
And then there’s the angle of being a business owner of a regulated firm. Yep, we’ve gotta throw some compliance into the mix of all of this. We’ve got the avoidance of foreseeable harm on our radar (and there is a lot of potential harm facing a lot of individuals right now). We’ve got extra calculations that now need to form part of periodic suitability assessments to ensure ongoing suitability. We’ve got cashflow assumptions needing to be updated to ensure they’re as accurate as they can (realistically) be.
The word 'smorgasbord’ was thrown around a lot both before and during the budget and I think it’s absolutely the right word. And that’s lovely if we’re eating in a tapas restaurant and want a whole load of choice. But is a flipping nightmare if we’re trying to effectively support our clients with a little bit of this and a little bit of that nipping at their financial plans. Imagine on the flip side the only real change was an increase in income tax of 2% (as was floated, and then dropped). There would’ve been a lot of grumbling, but in terms of the implementation it would’ve been swift, and there wouldn’t be a whole load of sneaky, potential pitfalls to trip people up. The net monetary amount would’ve been the same, but confidence would’ve soared off the back of clarity.
The Verve team pointed out today that with all the changes announced over the last couple of years, there’s not even such a thing as a Personal Allowance any more. Instead, everyone now has a personal Personal Allowance. Where there’s a starting point for the PA, then it needs adapting by all the various impactful measures, to leave you with your own definition of a Personal Allowance. Smorgasbord indeed.
So, what to do?
Well, there is absolutely the train of thought that much of this is planned for close to the next general election, and mightn’t come in, so we could sit tight and hope and pray it doesn’t change.
However, if it’s not this, it’ll be other stuff. There’s constant change in our wonderful sector, and so instead the best thing to do is figure out the high level approach as a business to these (and any future) changes, and ensure you’re cascading down from the top. To try and get as much consistency as possible.
We’ve got a whole load of info and tools that we’re building currently to roll out to our firms next week to help them do just that. For non-clients, there’s the resources already linked below.
And for those who are just sick to the back teeth of it all, find the Vicks isn’t hitting the spot, and just want to sack it all off, check out our interesting stuff section for things to make you smile 😉
Cheers to the freaking weekend friends. Let’s raise a glass of a
fine Burgundy in front of a roaring fire. We’ve almost made it to the end of the year 🍷
Cathi
.png?upscale=true&width=1120&upscale=true&name=Blog%20%26%20Eclipse%20GIFS%20(1).png)
.png?upscale=true&width=560&upscale=true&name=Switching%20blog%20holly%20(4).png)
-1.png?upscale=true&width=560&upscale=true&name=Switching%20blog%20holly%20(3)-1.png)
-2.png?upscale=true&width=560&upscale=true&name=Switching%20blog%20holly%20(2)-2.png)
.png?upscale=true&width=560&upscale=true&name=Switching%20blog%20holly%20(5).png)
.png?upscale=true&width=560&upscale=true&name=Switching%20blog%20holly%20(6).png)
.png?upscale=true&width=260&upscale=true&name=Event%20tile%20-%20BUILD%20specialist%20investments%20(2).png)
/linkedin.png?upscale=true&height=50&upscale=true&name=linkedin.png){kind=small}
