This year’s budget presented by George Osborne will doubtless have an effect on us all, though if you have a family, or are facing the breakdown of a marriage, then the budget may be of particular concern to you this year. Fiscally, the budget is offering nothing new, but could the changes to divorce and Family Law have any nasty surprises in store?
- The limit of personal allowance income tax has been increased, which is an ever-so-slight piece of good news for spouses working part time, or on low self-employment income. Apparently around 2 million will now avoid this tax completely, but time will tell.
- Various benefits such as child, housing and tax benefits appear to have made a transition from RPI to CPI, which could lead to a reduction in the true value of forward payments. This means we should expect civil lawyers representing wives to push for the connection between payments such as child maintenance and RPI, to reduce the effect the devaluation of tax credits and child benefits in the following years. On the other side of the battle line, lawyers representing husbands might instead fight for the inflation connection to be based on the lower measure of CPI.
- Child benefits have seen a significant piece of news, with the threshold for payments increasing by £10,000 to £60,000. The impact of this can be made clear – A parent with three children who is on a £60,000 salary will lose out on roughly £2,400 a year due to these charges. This new legislation should be considered when it comes to negotiating child maintenance payments with an increasing wage that could have an impact on the benefit.
- The fact has remained that there will be no tax breaks for payers of child maintenance and spousal maintenance, and the payee will still have to pay no tax on such payments.
- Hope is on the rise for potential new house builders looking to enter the market: A NewBuy scheme for new property building with values of up to half a million will reduce the current market rate of 20% for the deposit, down to a rate in-between 5 and 10%. This could prove especially helpful for people with little capital but with big ideas.
- Mr Osborne has stated that the pay for the public sector will become more responsive. The implications of this are as ambiguous as the statement given by the chancellor, though some are saying that pay differentials will increase in similar roles but in different parts of the UK, while some sectors will see pay frozen. Knowing just how ‘responsive’ payment will be is something people are going to want to know, especially when considering spousal and child maintenance. And what now for the RPI link anyway?
- Consumer goods such as books, food and clothing still remain under VAT exemption, which is a blessing for parents raising young kids, who are receiving child support maintenance.