Budget 2024

[RockRabbit]

The NI cuts will not stop the increase in the overall tax burden over the next few years assuming no changes in future budgets. After taking into account today's budget measures, the OBR state:

"Tax as a share of GDP is forecast to rise to 37.1 per cent of GDP in 2028-29, 4.0 per cent of GDP higher than the pre-pandemic level. Of this rise, we estimate 2.9 per cent will have taken place by the end of 2023-24, with the remaining 1.1 per cent forecast to take place thereafter to 2028-29."

So this budget has not cut tax, just reduced slightly the planned increases.

https://obr.uk/docs/dlm_uploads/E030577 ... eFinal.pdf (paragraph 1.21)

[Alaric]

So this budget has not cut tax, just reduced slightly the planned increase

It did nothing to revalue allowances, so increasing numbers on low incomes will have their marginal tax rates increased from 0% to 20% and those on higher incomes from 20% to 40%.

[Lootman]

Abolishing the non-dom perk that avoids UK tax on non-UK investments is fair enough given that Labour was going to do that anyway.

But an opportunity was missed to abolish the entire concept of tax domicile, thereby aligning the UK with most other nations that tax only on residency.

Some quirks of the current system are that the non-dom spouse of a UK resident is not treated as a spouse for IHT purposes, but rather just has the normal £325,000 nil rate band. And that UK nationals who emigrate overseas but fail to lose UK domicile can still be deemed subject to UK IHT when they die.

[1nvest]

"Hunt claims the UK is on track to become the world’s next Silicon Valley."

Ha, good one!

a.k.a. a land of sand ... a business desert. I thought that had pretty much already been achieved. Tory Jive is quite easy to learn, "we're on it" ... haven't a clue. "Fewer boats" ... meet them halfway and bring them ashore in a single ship. "Reduce NHS waiting lists" ... for those milking the public purse. Pharmacists got £15 for each jab their team administered. GP's had their wages doubled, so many opted to drop to half weeks, and even on those days often phone in to say that they wont be in, so that a locum has to be brought in, at a high pay rate. The NHS is largely self regulated, a licence to print/waste money. Local Authorities have over-spent, knowing that they'll be bailed out one way or another by the public purse and where many largely unaccountable 'senior managers' are on 6 digit salaries and golden pensions. And that's just the tip of the iceberg, "contracts for mates" has seen billions of public money redirected. Little to nothing left over for anything else.

[Hallucigenia]

I'm not sure how they'd be able to manage it other than by forcing providers to have a specific UK S&S ISA which would have restricted product choice to those shares and investments deemed to be classed as UK.

It's going back to the idea of the original PEPs in the 1980s where they were restricted to an authorised list of qualifying investments.

So it's been done before.

[1nvest]

That would probably be inflationary, and Sunak's No1 intention at present is to get inflation down to 2% (IMHO) before going for an election.

Getting high inflation that he induced back down again ... is a achievement? I guess so ... on paper.

[1nvest]

The British ISA is on. An extra £5k for British shares, whatever they are.

I'm now wondering which investment trust's portfolio most closely resembles VWRL ?

I think FCIT and VWRL rotations according to discount to nav variations is one choice. However FCIT's hidden total costs seem to have soared following the more recent 'change'.

[1nvest]

"The UK ISA will support savers and open up UK retail investment opportunities
for individuals. The UK ISA will be a £5,000 allowance in addition to the existing ISA
allowance and will be a new tax-free product for people to invest in UK-focused
assets. The government will consult on the details."

Yes, I found that. Sounds like they haven't decided how it will work yet.

Troubles finding British owned. So perhaps a Post Office bail out fund thought/concept.

[Lootman]

I'm not sure how they'd be able to manage it other than by forcing providers to have a specific UK S&S ISA which would have restricted product choice to those shares and investments deemed to be classed as UK.

It's going back to the idea of the original PEPs in the 1980s where they were restricted to an authorised list of qualifying investments.

So it's been done before.

Yes, I recall taking out a PEP in their first year, 1987. It was with Lloyds Bank and, since this was pre-internet, they sent me a list of "approved" investments. I wrote my allocations on that form and sent it back to them. And a few days later I would get a paper confirmation or statement through the post.

UK only, no ITs or funds except with a lower limit. No foreign shares. Just the usual suspects (at the time): Glaxo, ICI, Hanson, GEC and a few newly privatised entities.

At some point European shares were also allowed, as this was back when we thought we were European.

Then Blair/Brown got rid of the distinctions and renamed them ISAs.

Full circle.

[1nvest]

So this budget has not cut tax, just reduced slightly the planned increase

It did nothing to revalue allowances, so increasing numbers on low incomes will have their marginal tax rates increased from 0% to 20% and those on higher incomes from 20% to 40%.

And see more at the bottom end, whose low income might otherwise have been exempt, being brought into having to file a self assessment and pay tax. Especially the elderly, for whom opening Windows in December/January would seem totally unreasonable. And as for a mouse - they live in a clean house.

But that's the price of having to fund the likes of MP's and Lords individually milking £60 million out of the public purse.

[the0ni0nking]

And see more at the bottom end, whose low income might otherwise have been exempt, being brought into having to file a self assessment and pay tax. Especially the elderly, for whom opening Windows in December/January would seem totally unreasonable. And as for a mouse - they live in a clean house.

But that's the price of having to fund the likes of MP's and Lords individually milking £60 million out of the public purse.

About time the tax reach extended more widely - state pensioners have had it easy with the triple lock since whenever - if the end result of that means some pensioners filing in tax returns then so be it. If they can't cope with it then they can pay someone to do it for them.

And if they fail, then they can be fined for their failure.

Same as I'm sick of people moaning about bank branch closures and the like - they're not really needed. It's time people managed to at least move into the 2000s and the way things are now.

[JohnB]

I'm not sure pensioners would appreciate paying £300 to get an accountant to prepare their tax return when the sums payable might be similar. Its not very sympathetic to dismiss the problems of people less capable than yourself.

[the0ni0nking]

I'm not sure pensioners would appreciate paying £300 to get an accountant to prepare their tax return when the sums payable might be similar. Its not very sympathetic to dismiss the problems of people less capable than yourself.

I know - and my response was slightly tongue in cheek but currently the emojis didn't load or show on my post preview so I deleted them.

The other option would be to lower the state pension so they can have less income and the whole fiscal drag becomes less of an issue for them.

[tjh290633]

This demonstrates the foolishness of reducing tax rates instead of raising the threshold. The latter will bring far bigger benefits to the low paid and pensioners, at no extra cost. Hunt should never have been made chancellor.

TJH

[MuddyBoots]

I'm looking for clues about the timing of the general election. Today's budget seems a bit downbeat and lame for an election budget: nothing for the pensioners, the only real giveaway is the NI cut. So I'm reckoning on an autumn election with another budget beforehand with a bit more to excite the electors.

[Lootman]

I'm looking for clues about the timing of the general election. Today's budget seems a bit downbeat and lame for an election budget: nothing for the pensioners, the only real giveaway is the NI cut. So I'm reckoning on an autumn election with another budget beforehand with a bit more to excite the electors.

Very late 2024 is my bet. If you know you will lose them string it out. Stay in power longer and there is always a chance that Argentina will invade the Falklands again.

[JohnB]

This demonstrates the foolishness of reducing tax rates instead of raising the threshold. The latter will bring far bigger benefits to the low paid and pensioners, at no extra cost. Hunt should never have been made chancellor.

TJH

But the Tory's only (faint) hope is to get the young in work to change their minds. The 20% average polling they're getting is much worse with the young. Really its a matter of queering Labour's pitch, reversing the cuts will annoy the young, who'll still be around in 5 years at the next election (or indeed 10 years...), unlike a fair fraction of the pensioners.

[tjh290633]

This demonstrates the foolishness of reducing tax rates instead of raising the threshold. The latter will bring far bigger benefits to the low paid and pensioners, at no extra cost. Hunt should never have been made chancellor.

TJH

But the Tory's only (faint) hope is to get the young in work to change their minds. The 20% average polling they're getting is much worse with the young. Really its a matter of queering Labour's pitch, reversing the cuts will annoy the young, who'll still be around in 5 years at the next election (or indeed 10 years...), unlike a fair fraction of the pensioners.

I have realized what Hunt is up to. There have been thoughts of merging NICs and Income Tax . He is doing it by stealth by not raising the thresholds and gradually reducing NICs. Not sure how employers NICs are affected. Will there be a payroll tax to replace them?

TJH

[JohnB]

Of course NI contributions give you state pension entitlement, though many people overpay. Its about £900 for a full year now. If a drop from 12% to 8% is also said to save the average worker £900, then I guess they are going from 3* to 2*, and people at the bottom just won't be contributing enough and will require top-ups. And what was a 4 months working will now be 6 months for Mr Average.

[Nimrod103]

I have realized what Hunt is up to. There have been thoughts of merging NICs and Income Tax . He is doing it by stealth by not raising the thresholds and gradually reducing NICs. Not sure how employers NICs are affected. Will there be a payroll tax to replace them?

TJH

I came to the same conclusion, and furthermore, abolishing NI contributions makes it easier for the state pension to become a means rested benefit.