The additional £5,000 Isa allowance for Isas invested in British businesses is a "drop in the ocean" even for wealthy people and inconsequential for most investors, who do not use all of their allowance in the first place.
Stephanie Court, tax director in the private client team at RSM UK, told FT Adviser the incentive to invest more in British business was a nice touch but would not make a big difference even for the market it is targeting.
She said: "It was a nice patriotic touch [but] not many savers actually utilise the £20,000 annual allowance that's available to them at the moment. This isn't a simplification either that many were calling for.
"£5,000 probably is a drop in the ocean both for those individuals [who use all of their allowance] and the financial markets that the British Isa is targeted at."
She also said the failure to tackle inheritance tax in any meaningful way was a "missed opportunity".
"It might be a nice money earner for the exchequer, but as the most hated tax it actually affects a tiny percentage of estates in the UK," she said.
The chancellor did announce the scrapping of furnished holiday lettings relief however, and this could impact how much landlords can contribute to their pensions, Court explained. This is because FHL profits are considered relevant earnings for pension purposes.
Overall, she said, the budget was largely as expected as most of the big announcements were hinted at in the days before.
"There weren't any major surprises," she said, but she added it might have been difficult to do more at this point in time, especially as he would not have wanted the negative market reaction some previous budgets have seen.
There may be some giveaways yet to come, as the Office for Budget Responsibility expects inflation to drop below 2 per cent in the autumn, while gross domestic product is forecast to expand by 0.8 per cent this year.
"The chancellor was under a lot of pressure to reduce tax cuts and still is. We might have expected more from a general election budget year, but if the headline rate of inflation may well reduce over the summer it's still possible that the chancellor could... make changes later on in the year."
To hear more about how tax planning could be affected by the Budget, click on the image above.
carmen.reichman@ft.com
