You’ll have heard that the Budget was delivered earlier today. We’ve pored through the entire Government’s publication on this to summarise what we think are the most relevant bits for Muslims that you might have missed. The BBC summaries are great, but they don’t write their summaries with you and I in mind!
I’ve ignored the big headline stuff which you’ve probably seen in the mainstream summaries – like savings on national insurance payments and the decrease in the lifetime limit for entrepreneurs’ relief.
Increase in children savings
One of the more surprising announcements was an increase in the allowance for Junior ISAs (“JISAs”). Currently, if you open a JISA for your child, you can save a maximum of £4,368 in each tax year. The Budget increased this to £9,000.
That’s a great result for those of you who are keenly tucking money away in a JISA and would do more of that if you had the opportunity.
For those of you unfamiliar with a JISA, they’re same the same as an ISA but for under 18s. You can save money in a JISA and invest it (if you opened a stocks & shares JISA). The idea is that with 18 years ahead, consistent saving and investing can mount up to a very decent amount.
For instance, tucking away £200 per month for 18 years, and assuming a 7% annual return on your investments (not an unreasonable amount as an average over 18 years), would land you £84,659.61.
Just go into it with your eyes open though: the money in a JISA legally belongs to your child when they turn 18. You may prefer to open a stocks and shares ISA in your own name and save within that, and just mentally carve it out as being for your child. That way you can hand it over whenever you like (perhaps a surprise wedding gift for example!). If you are thinking of opening a stocks and shares ISA, I personally like AJ Bell. You can check the halal funds they offer on our investment comparison page.
Increase in stamp duty for non-UK residents
The Government will introduce a 2% surcharge for non-UK residents purchasing property in England and Northern Ireland from 1 April 2021.
That’s particularly bad news for Muslim expats who want to invest in UK property while they’re abroad.
If you’re wondering whether you’re classed as UK resident or not, chances are you are probably non-UK resident if you’re an expat whose gone abroad for work. Government guidance tells us that you’re automatically non-resident if you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working. Full details here if you want to know the rules.
More affordable homes
Good news for first-time buyers and property and land developers.
The government is investing a further £9.5 billion in the Affordable Homes Programme which in total will allocate £12.2 billion of grant funding from 2021-22 to support the creation of affordable homes across England.
This is good for first-time buyers as it means more property supply on the market and hopefully more value for money.
This is equally good news for the property and land developers amongst you as it means that local authorities should be keen to snap up real estate and will have a bigger budget to do so.
Home-buyers: don’t forget to use our mortgage comparison tool.
Property developers: drop us a line directly as we’re keen to hear what you’re up to and how this changes things. We also may be able to help you with financing and other such things. Contact us here.
Land developers: if you want exposure to a sharia-compliant land developer, check out our halal investment comparison and look out for Intro Crowd.
Start-up Loans Programme extended
The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021‑22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business.
Good news for new businesses but we are monitoring to see whether the programme will have a sharia-compliant option. We’ll report back when we know more!
More funding for schools
On average, schools will see an increase of over 4% in funding per pupil compared to 2019‑20 budgets. The three-year settlement will also allow the government to raise starting salaries for teachers to £30,000 by September 2022.
For those of us who are parents, we’ve all seen in some form or another the effects of austerity on our schools. It’s good to see the Government increasing the spending.
Digital Identity Unit
One of the more interesting things I noticed in the Budget was the Digital Identity Unit.
The government will work to create a digital identity market that makes it possible for people to prove things about themselves without showing paper documents. This will help make opening a bank account, claiming benefits or buying a house simpler, safer and quicker. More secure and cost-effective online transactions will also boost business and the digital economy.
No doubt our friends over at Onfido will be all over this. This sounds like a positive step as ID is still such a cumbersome step for so many things.
So there we have it. Some of the lesser-known things from the Budget that affects us. Did you notice anything interesting? Let us know in the comments!