Emergency Budget

[gettin2dizzy]

Anyone going to be affected much?

It amazes me that savers are going to be targeted yet again! Social engineering at its worst.

...I wouldn't want to be a teacher right now.

[keithd]

Didnt think the budget was for another 4 weeks yet...?

[Tara]

Didnt think the budget was for another 4 weeks yet...?
i thought that too

[ThEGr33k]

Anyone going to be affected much?

It amazes me that savers are going to be targeted yet again! Social engineering at its worst.

...I wouldn't want to be a teacher right now.

Dont know without seeing it really. You think its going to be bad for teaching? I kinda hope not since im in education, would be just my luck if I lost my job. :rolleyes:

[BigBaddad]

Labour has left this country with massive debts...worse than Greece.

Money has to be paid back somehow.....personally I'd cut all benefits.

[ThEGr33k]

Labour has left this country with massive debts...worse than Greece.

Money has to be paid back somehow.....personally I'd cut all benefits.


Indeed to both. Funny how people will still somehow blame the current government for it all. I still talk to people who think they should spend more not less :confused:

[gettin2dizzy]

Didnt think the budget was for another 4 weeks yet...?
It isn't, but most of it has been outlined already. National Insurance up, middle earners targeted and savings to be more heavily taxed... oh but inheritance tax will be eased :rolleyes:

Indeed to both. Funny how people will still somehow blame the current government for it all. I still talk to people who think they should spend more not less :confused:
This government were sitting in parliament whilst Labour fudged up. They could have at any time stood up to them, but they chose to play with their allowances.

[TazDaz]

National Insurance up


Where did you hear this....? I understood that ConDems were scrapping the planned Labour rise!

[Jabba]

Where did you hear this....? I understood that ConDems were scrapping the planned Labour rise!

IIRC following post-election releases during the coalition talks, they resolved to keep part of the employees increase (from 10 to 10.5%?) but scrap Labour's planned employer increase.

[gettin2dizzy]

Where did you hear this....? I understood that ConDems were scrapping the planned Labour rise!
They are ... in favour of their own.

http://www.telegraph.co.uk/news/newstopics/politics/7765518/Middle-classes-face-higher-taxes-under-Government-plans.html

:lol: at the Telegraph's predictable take on it; "Middle classes face higher taxes"

[TazDaz]

IIRC following post-election releases during the coalition talks, they resolved to keep part of the employees increase (from 10 to 10.5%?) but scrap Labour's planned employer increase.


Ah, they snuck that one under! Doesn't sound too bad to me tbh, and if the 10k threshold comes into force next year it will balance out nicely for me! :)

[yorkie_chris]

It isn't, but most of it has been outlined already. National Insurance up, middle earners targeted and savings to be more heavily taxed... oh but inheritance tax will be eased :rolleyes:


Friend of mine is about to take a big hit with inheritance tax when his Ma goes.

Their family has owned farm since 1950, their parents and 4 kids who've all worked there to make it what it is. I don't see why the government are entitled to a massive chunk of that.
He's pretty p*ssed at the conservatives having to drop that particular promise.

[yorkie_chris]

They are ... in favour of their own.

http://www.telegraph.co.uk/news/newstopics/politics/7765518/Middle-classes-face-higher-taxes-under-Government-plans.html

:lol: at the Telegraph's predictable take on it; "Middle classes face higher taxes"

http://www.youtube.com/watch?v=w0DUsGSMwZY

:-D

[Tara]

Friend of mine is about to take a big hit with inheritance tax when his Ma goes.

Their family has owned farm since 1950, their parents and 4 kids who've all worked there to make it what it is. I don't see why the government are entitled to a massive chunk of that.
He's pretty p*ssed at the conservatives having to drop that particular promise.
get her to sign the house over now before she goes - or does that not work i can't remember tbh

[Mr Farley]

Friend of mine is about to take a big hit with inheritance tax when his Ma goes.

Their family has owned farm since 1950, their parents and 4 kids who've all worked there to make it what it is. I don't see why the government are entitled to a massive chunk of that.
He's pretty p*ssed at the conservatives having to drop that particular promise.

I'm ****ed they've had to make concessions in this area too, although hopefully it won't affect me for many years yet. I feel sorry for those who lose lots through this tax, it's just robbery IMO.

What irritates me is that there is this idea from some, that it only affects the rich. Yes it will benefit some well off people but many who aren't too. I'm a meter reader for god's sake and live with my parents as I can't afford to move out! My bro is a builder and does better, but not much. My parents aren't rich either, but through hard work and various other circumstances this tax would really affect us which doesn't seem right.

[gettin2dizzy]

Friend of mine is about to take a big hit with inheritance tax when his Ma goes.

Their family has owned farm since 1950, their parents and 4 kids who've all worked there to make it what it is. I don't see why the government are entitled to a massive chunk of that.
He's pretty p*ssed at the conservatives having to drop that particular promise.
Up to £1million will be tax free.

I agree to an extent, why can they claim tax on a building bought with an already taxed income. But when the government is skint it seems an odd move to make, and one that benefits those with the most.

Truthfully I'm just bitter (yup ;) ) at the generation that have priced the younger generation out of property completely - renting or buying! The capital held in these buildings is unjust.

[Mr Farley]

Up to £1million will be tax free.

I agree to an extent, why can they claim tax on a building bought with an already taxed income. But when the government is skint it seems an odd move to make, and one that benefits those with the most.

Truthfully I'm just bitter (yup ;) ) at the generation that have priced the younger generation out of property completely - renting or buying! The capital held in these buildings is unjust.

They haven't said they are going to change it though, have they? It was going to be one million, but it was a policy that the lib dems strongly disagreed with so has been put on hold for now?

[yorkie_chris]

Price of it will depend on planning permission. Maybe he will get away with that then.
Place has lots of land, and was an old quarry... somehow calderdale council class this as a greenfield site for planning rules! :toss:

[Luckypants]

From what I can see the increased Income Tax threshold will cancel out the National Insurance increase for those earning up to £45K. Folks earning less than £20K should be better off, folks earning over £45K will see a modest increase. Seems OK to me, as long as this is not the thin end of a wedge to 'tax the rich' - because what the treasury think is rich does not seem very rich to me (I am not rich BTW - do not earn over £45K :( ).

As far as IHT is concerned, I'm very disappointed that they are not raising the threshold a long way or even scrapping it. Taxing the money someone has built up to pass on to their family is just not fair, the money they earned is already taxed FFS. Most of this 'wealth' has come from house price increases, which your average Joe cannot help but screws him over just the same.

I am very wary of the changes to Capital Gains Tax, because I really believe that heavily taxing profits from investment will stifle such investment, leading to businesses struggling to get financial backers etc. They need to be very careful here.

I'm waiting to see the details, but the changes mooted so far seem ok. We all know that tax rises are coming, how else will all the Labour debts be repaid? So we can hardly be surprised when these tax increases affect 'the man in the street'.

[Luckypants]

Up to £1million will be tax free.

Do you have a verification of this? Have not seen that.

[Bri w]

This government were sitting in parliament whilst Labour fudged up. They could have at any time stood up to them, but they chose to play with their allowances.

Labour had a majority that meant it didn't matter how much anyone else stamped their foot, and members from all parties had a rare old time with their allowances - is it 4 Labour MP's now in court for it...

[Mr Farley]

I am very wary of the changes to Capital Gains Tax, because I really believe that heavily taxing profits from investment will stifle such investment, leading to businesses struggling to get financial backers etc. They need to be very careful here.

Again it's just robbery most of the time. The 'profits' they are taxing people on aren't profits at all. Mainly CGT tax will be on second, third properties etc. But when the house market goes up, that doesn't mean you've made a profit on the property as the whole market has gone up relatively. So if you sell a house and pay CGT, you will ahve to pay more to buy something else equivalent as the whole markets gone up. Just robbing people again.

[Viney]

Whatever happens its going to hurt, but you cant make an omlette with out breaking eggs.

Can we don anything, nope. Sh17 happens.

[Biker Biggles]

Capital gains tax is a tax you pay on capital assets that gain in value when you sell them,including property.They dont charge it on the property that you actually live in,and there is a personal allowance of several thousand pounds,far more than most people make in any year.I dont really see anything wrong with that,especially the charge on second and third homes,which tend to price first time buyers out in rural areas.
As for inheritance tax,there are some stupid anomalies,but as long as the threshold is kept up at a sensible level I dont see why property wealth should be handed down the generations in huge amounts.There are plenty of wealthy idle rich(many in parliament)whose only qualifications for what they do is that dad,grandad or great grandad made a pile.Makes no sense to me.

[Jabba]

I dont see why property wealth should be handed down the generations in huge amounts.

I think that's the problem..... modest family homes are forcing estates into the existing bandings (£325k, or £650k for a couple who were married at the time of the first death). In many parts of the country, £325k's worth of house does not represent a "stately pile" and neither are those living they likely to have a lifestyle characterised by conspicuous consumption.

And as someone else said, such modest properties are very likely to have been paid for out of taxed income.

For me and for many others, leaving something by way of an estate to help my surviving family feels like the right thing to do for they might not be as fortunate as maybe I have. Hell, they way things are going they might not even have a state pension to count on.

I've paid my taxes and NI all my working life - why the feck should the taxman have the right to decide what happens to what I leave behind when I croak?

I'm far from rich but have chosen to live a modest lifestyle so that I can live somewhere nice. Would they rather I'd been a waster, spent everything and ****ed a fair bit of it up against the wall?

[yorkie_chris]

Capital gains tax is a tax you pay on capital assets that gain in value when you sell them,including property.They dont charge it on the property that you actually live in,and there is a personal allowance of several thousand pounds,far more than most people make in any year.I dont really see anything wrong with that,especially the charge on second and third homes,which tend to price first time buyers out in rural areas.
As for inheritance tax,there are some stupid anomalies,but as long as the threshold is kept up at a sensible level I dont see why property wealth should be handed down the generations in huge amounts.There are plenty of wealthy idle rich(many in parliament)whose only qualifications for what they do is that dad,grandad or great grandad made a pile.Makes no sense to me.

Oh great so there's absolutely no incentive for me to get a job since the state will nick anything before my kids see it.

Cheers for the student loans, I'm off to sign on.

[Jabba]

.There are plenty of wealthy idle rich(many in parliament)whose only qualifications for what they do is that dad,grandad or great grandad made a pile.Makes no sense to me.

You're assuming that everyone who's rich inherited it, are idle, contributing nothing to the country and are only interested in their social lives. Sorry fella, but that's just bollox and a stereotype bandied about for political ideals. Alan Sugar? Richard Branson? How much tax have they paid in the lives so far?

I don't agree with patronage, the old school tie, hereditary peers and stuff of that ilk, but likewise I do believe in a persons right to decide what they do with their disposable income (within certain bounds, of course). If someone chooses to save or invest for the benefit of their family or others rather than spend then they should not be penalised for doing so.

[Biker Biggles]

No I didnt say that at all.I said there are plenty,not everyone who is rich.I believe Alan Sugar made his own pile,not sure about Branson so Ive no issue with that.

And I did say quite cleary if you read it that there are stupid anomalies and that there should be sensible thresholds.
Now take a detention and come back after school when I will be asking questions in more detail.

[Jabba]

And I did say quite cleary if you read it that there are stupid anomalies and that there should be sensible thresholds.

To my mind its a significant disincentive to working hard, maybe taking a risk or two on the business front, maybe growing your business and employing people, etc.

Where do you think that sensible threshold should be? What would you do in the case of someone like Alan Sugar? A personal allowance of £325k means that 40% of his personally accumulated estate will end up in the hands of HM Treasury (although I'm sure he's doing all he can to avoid this - legally, of course).

[yorkie_chris]

The fact of the sum being £10 or £10 million does not change the morality of the situation.

Your "idle rich" will soon spend it, meaning 90% of it ends up back in treasury anyway. And if, god forbid, they put it in a savings account, that gets taxed as well!

[Biker Biggles]

Stupid anomally example-----Elderly sisters live together for donkeys years and one dies leaving the other with a tax liability.

I work hard so I have enough for me and my dependants to live on,not so I can die with loads of money to hand out to others.I actually think there is something wrong with a culture that relies on inheriting money made by someone else for its standard of living.Perhaps thats why our economy is in such carp----not enough emphasis on creating wealth,and too much on trying to inherit it for nought.

[yorkie_chris]

Where is the emphasis on NEEDING to inherit money?
You pay your mortgage or rent or whatever, you don't go around thinking "oh I hope my Da pops his clogs soon so I can buy myself a new fridge"


Creating wealth so your kids can enjoy it, surely fair policies about savings and inheritance encourage this? If anything your absurd suggestion would be better pointed the other way as it is the attitude which promotes unfeasible levels of debt for pointless consumer products.

Which one has created a problem, your Grandparents sensible savings, or the *rseholes down the road defaulting on the payments on the 47" plasmaLCDHDTV sky package?

[ethariel]

I work for a government department, if you think this administrations changes/promises/announcements have hurt you, i'm waiting to see if they send round a tub of lube to go with whats heading my way!

[Mr Farley]

Stupid anomally example-----Elderly sisters live together for donkeys years and one dies leaving the other with a tax liability.

I work hard so I have enough for me and my dependants to live on,not so I can die with loads of money to hand out to others.I actually think there is something wrong with a culture that relies on inheriting money made by someone else for its standard of living.Perhaps thats why our economy is in such carp----not enough emphasis on creating wealth,and too much on trying to inherit it for nought.

How generous, you'll be leaving your house to charity then? ;)

You seem to have a completely different attitude to Inheritance tax in the first place to me. I think it's right that if parents choose to leave a house to their offspring then that shouldn't be taxed, as they've bought it with a wage that's already been taxed. What makes you so sure there aren't many people who stand to lose a lot who don't necessarily have a high standard of living? Especially in London where property prices are high and people don't necessarily earn more than they do anywhere else.

[Biker Biggles]

Dont get me wrong.Im like anyone else and would be the first to grab a gift horse if offered.Im just saying that I dont think taxing windfalls is inherently bad,given that the tax money has to come from somewhere.We are all going to be paying/losing lots of money over the next few years,so best it comes from those who can afford it or who didnt work for it

[yorkie_chris]

Inheritance tax IS coming from people who worked for it, despite them being dead.

[Jabba]

Im just saying that I dont think taxing windfalls is inherently bad....

This is where you and I differ. I don't think of inheritances as windfalls. Windfalls implies either something unplanned or lucky. In most cases they are neither.

Tax lottery winnings instead. These are unplanned and lucky.

[Bluefish]

I can't see me ever having this problem, unless house prices double every year for a few years, but tend to agree with jabba and YC.

[Biker Biggles]

This is where you and I differ. I don't think of inheritances as windfalls. Windfalls implies either something unplanned or lucky. In most cases they are neither.

Tax lottery winnings instead. These are unplanned and lucky.

Perhaps we should call it unearned income(at least unearned by those who have to pay the tax)then,and yes why not tax lottery winnings.

To look at it from another angle-----They have raise half a trillion squid from somewhere,so where should it come from?Maybe ten pence on income tax or 10% more on VAT?We have already ruled out (and I agree)that the "jobs tax" was a daft idea.

[Jabba]

Perhaps we should call it unearned income(at least unearned by those who have to pay the tax)then,and yes why not tax lottery winnings.

Doesn't matter how you dress it up, IHT discriminates against those who chose to save. They pay at 40%. Those who chose to spend are also taxed, but VAT is only 17.5%. That seems inequitable to me.

You also don't seem to consider that a large part of many estates is the family home which was often bought for a modest cost but which has appreciated in value many times over and many more times than income since it was bought. Homes are bought to live in, not as an investment and it is scandalous that they often have to be sold to pay death taxes.

A lage estate doesn't necessarily mean lots of cash. Often it's the reverse - people chose to invest in their home to make it nice to live in and keep in good repair. This just happens to make it worth more too.

I can't think why Lottery winnings shouldn't be taxed. Trouble is that other prizes aren't taxed. Difficult to tax prizes that aren't given as cash.

To look at it from another angle-----They have raise half a trillion squid from somewhere,so where should it come from? Maybe ten pence on income tax or 10% more on VAT?We have already ruled out (and I agree)that the "jobs tax" was a daft idea.

Tax the profits of the banks bailed out by the govt. A large part of the half a trillion squids is accounted for by this.

Why should careful, dilient and prudent Joe Public donate part of his estate upon death to bail out that bunch of bankers, many of whom are yet again enjoying huge bonuses and a fat-cat lifestyle in total contrast to those who chose to save either for a rainy day or to give their offspring a helping hand upon their demise?

They could also spend less. The wars in Iraq and Afghanistan cost £bns each year. The new Govt has inherited (see what I did there :lol:) a huge "state". Reducing the size of Govt would help. More people working and paying income tax would help, so making business easier and less costly would help.

[Rog]

Why I think that cutting hte budget so fast is gonna cause a double dip.

Whether we like it or not the previous government created a false economy based on high government spending. This had a lot of companies diversifying their previously high private trade to government contracts as they tend to be prompter payers and fairer clients. This has been going on for years so many companies, especially in the construction industry where I work, have become more dependent on government spending. This is compounded by the fact that private companies arent spending becuase of the recession. In my opinion companies shoudl have been given time to ween themselves off government spending and lift the economy, so that private investors start spending again and a switch back to private funding can take place. To give you an example, a contract we have been gearing upto has simply been axed with no explanation or time to plan our exit, consequently we will loose at least 60 staff it may even make our local office unviable so we will really loose 120 staff, this knocks on to all the companies that supply us and so on and so forth. The Tories did the same in 1992 and wouldnt spend and decimated industries then and the same is happening again.

In my opinion, raising income tax would have been the best way to do, so that the money in the economy is taking fairly from everyone and every company has a little hurt but can deal with it. This bull**** about a tax on jobs is rubbish. I woudl rather have a company stay stagnant in terms of employment for a year or two rather than see it shed jobs due to a massive decrease in its market.

A final point, please whoever keeps doing it, stop comparing our debt to Greece. I know Cameron said it in his 3 way leader debate, but it is complete bunkum. Greece and the United Kingdom have totally different economies both in makeup and scale and we have a different attitude to paying our taxes. A little scare tactic that should have been squashed by the other 2 at the time.

[Biker Biggles]

I think you could be right about the double dip.Not sure about your reasons but I think the impending collapse of the Euro will drag everyone down.This time round all the governments are skint(including us)so who will pay for the next lot of bailouts?
Looking at what happened in the twenties and thirties and compressing the timescales to reflect modern life there is a strong similarity.
Third world war set to start in November then?

[Rog]

Here we go again. Question time tonight John Redwood comparing Greeces debt to ours to scare people. In my opinion this is extremely misleading and they shoudl stop it now they are in power.

check out this linky to see the vast difference between the two economies.

http://news.bbc.co.uk/1/hi/business/10150007.stm

[Luckypants]

I think you will find it is the DEFICIT that is similar to Greece's (plus Spain's and Ireland's), and this is the concern. The deficit is the money the government spends that is more than it takes in tax, which leads to big debts. Our deficit is very similar to Greece's so if we do not cut the deficit we will end up with debts like Greece's (as a percentage of GDP) which will be catastrophic.

So yes, be scared because unless the runaway train that is government spending (from the previous governments policies) is slowed and brought back under control, we will end up in a similar position as Greece. Ireland has already made swingeing cuts to spending to try to head this off and plans more. Spain is worrying the Eurozone finance ministers as it has not made the cuts it needs to and seems to be following the same path as Greece.

Don't think we are immune.

[yorkie_chris]

Why I think that cutting hte budget so fast is gonna cause a double dip.

You can't spend more than you've got indefinitely, whether you be Joe Bloggs, or GB, Plc.

[thefallenangel]

IMO this is all caused by mis-distribution of wealth within the company.

How come someone can have a big house, flash cars etc . . . when we can't even get our hospitals to run properly?

How can you have Cameron with £3million quid when the country is billions in debt?

Taxing people more with higher earnings is always going to be the way to go. And it shouldn't be banded it should be % ratio on your earnings.
If the country is earning more money then people get taxed more, if they don't then the tax is less.

[Rog]

To answer Lucky Pants, yes I know that our defecit is similar in percetnage terms to Greeces but our economy is still completely different to that of Greeces and we are therefore far more likely to be able to pay that debt back and hence why we still have a AAA rating. I cannot deny its worrying but we do ahve the financial clout to get ourselves out of this.

Secondly, Yorkie Chris I totally accept that we have to get rid of this false economy based on hihg government spending but I maintain that this should have been more slowly and with more thought. As I said in my other post, alot of private companies have switched to government contracts because the private ones just arent there. if you are going to turn off the tap it has to be slower than this or the ripple through the jobs market and hence the economy is goignto be emense and defintely cause a double dip.

the only real way to tackle this is through higher taxation with some pruning and mostly wage freezes in the public sector. there are approximately 19,000,000 workers in britain so by increasing teh tax burden by say an average of £500 a year then we instanly raise 9.5bn I know that scares some people but I firmly believe we all have to dip our hands in our pockets. I dont like it anymore than anyone else but to snip the economy everywhere, i.e. through higher tax, will have a lesser effect than this random and blunt money axe they are wielding.

Some of you older types like me may remember what the tories did to the miners. whether it was right or wrong in terms of lossing coal production is immaterrial its the fact they simple shut them over night and then provided no support to the local communities. Some of those communities never recovered. Now imagine that but in macro as I believe it may happen.

[sarah]

All rather depressing working in the public sector at the moment :-(

[thefallenangel]

blanket tax is impossible, peole are breadline already to survive.

I still can't see how the richest in this country can earn money off everyone and then "move" abroad and expect to dodge taxes.

Taxing someone who earns £10 million a year another £10k is a lot easier than taxing 20 breadline families £500 a year.

Also there's easier ways of saving money like changing OAPs bus pass to 50p a journey or £1.

[Rog]

I think you have me wrong the poorest incomes would be very little increase teh higher earners would pay more, giving an average of £500.

I would point out that the rich are not a bottomless pit of money either. I would rather get £5000 from some one rich who considers it fair than hammer them, they hire someone to find a loop hole and then they pay nothing.

[carternd]

What about a flat-rate tax? I'm not particularly bothered about the fraction of my wage I pay to those pillocks in Westminster, as long as I earn enough to live on. Since I work hard that's fair enough!

[yorkie_chris]

I think you have me wrong the poorest incomes would be very little increase teh higher earners would pay more, giving an average of £500.

I would point out that the rich are not a bottomless pit of money either. I would rather get £5000 from some one rich who considers it fair than hammer them, they hire someone to find a loop hole and then they pay nothing.

Difference is rich people will move abroad, meaning if you use them like endless cash cow then they end up going to greater lengths to avoid tax.

Imagine if we made it really easy for rich people here and got all industrialists and entrepeneurs from all around... they would pay same tax as poor people but would in sum of it bring in more money.

[Luckypants]

To answer Lucky Pants, yes I know that our defecit is similar in percetnage terms to Greeces but our economy is still completely different to that of Greeces and we are therefore far more likely to be able to pay that debt back and hence why we still have a AAA rating. I cannot deny its worrying but we do ahve the financial clout to get ourselves out of this.

Our economy may well have a different make up to that of Greece, but what on earth make you think that the UK running a deficit of 11% of GDP is more sustainable than Greece running a deficit of 11%???? It's like saying joe bloggs down the road is earning £20000 but spending £24400 is wrong but it's OK if I do it. The rules are the same for both, eventually our creditors will come calling and we will be declared bankrupt. The same will happen with the UK as a whole, as happened in 1976 when we needed the IMF to rescue the UK. Saying things are different now is burying your head in the sand, you simply cannot spend money you don't have forever. Remember that while we have a budget deficit our debts continue to increase. I see your point about the 'soft landing' for UK companies dependant on Government contracts, but the writing has been on the wall for past 18 months that cuts are coming, if they have not made plans to get in replacement work then they are daft. If the work is not there, well unfortunately that is the reality of the situation.

I also think that cutting £6Bn this financial year is in fact a gradual withdrawal of government funding. £6bn is a relatively small amount seeing as the total deficit this year is likely to be £165Bn!! You can be sure that the cuts will be larger next year and the year after, because they need to be. The emergency budget will no doubt raise the overall tax burden (already too high IMO, but that's another debate) in order to reduce the deficit in future years. So IMO the reason why the UK still has a AAA credit rating is because steps are being taken to address the deficit, loss of our credit rating would be catastrophic for the public finances. We also have to remember that we need to pay all this debt back, so at some stage we need to get back to government surpluses so we can do that - at least in part, I realise that all governments in all countries have debts and this is normal.

FWIW I think the most likely tax raising changes in the coming budget will be CGT harmonised with Income Tax rates and VAT to 20%. As long as the CGT is done in line with how Nigel Lawson harmonised them in the 80s it should not be too damaging. In fact he was on Radio 4 on Saturday morning and had a lot of useful things to say on the effects of different taxation strategies.