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The Budget - 11 March 2020

including Budgets
scrumpyjack
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Re: The Budget - 11 March 2020

#280043

Postby scrumpyjack » January 26th, 2020, 11:24 am

Tortoise1000 wrote:
Do you reckon theyll cut benefits?


Do you mean things like unemployment and disability allowances? Absolutely not.

I'd like the Chancellor to simplify pension contribution rules. They are too complicated. They should take away the limits, and instead just give tax relief at the basic rate. There was a budget a few years back where that was expected, and savers were resigned to the prospect, and then it didn't happen. It would seem fairer, and stop annoying high earners with strange cliff edge effects.

T


The problem with abolishing higher rate relief is defined benefit schemes, where the employee may not be making any cash contribution at all. It is simply an increase in the liability the employer has to meet in respect of the whole scheme. Abolishing HRR would mean those employees would have to be charged an extra tax bill when they had not received the cash and it could be quite difficult to quantify precisely the benefit they had received in the tax year. Just think of those poor MPs and Civil Servants!

It would be simpler to put a cap on the tax free lump sum and I can't see any reason why they couldn't do that.

PinkDalek
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Re: The Budget - 11 March 2020

#280575

Postby PinkDalek » January 28th, 2020, 12:31 pm

Business Rates to be reduced for smaller outfits (not merely pubs as per the sexy header):

Happy hour for pubs as government cuts business rates
https://www.gov.uk/government/news/happy-hour-for-pubs-as-government-cuts-business-rates

Elsewhere there is talk of Entrepreneurs’ Relief being amended (reduced).

JohnB
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Re: The Budget - 11 March 2020

#283978

Postby JohnB » February 13th, 2020, 12:09 pm

Sajid Javid has resigned as Chancellor as he refused to sack his advisory team as Boris wanted. Chief Secretary to the Treasury Rishi Sunak is likely to be appointed. He has a good CV (https://en.wikipedia.org/wiki/Rishi_Sunak), but is going to be rather busy for the next 4 weeks....

moorfield
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Re: The Budget - 11 March 2020

#283985

Postby moorfield » February 13th, 2020, 12:27 pm

JohnB wrote:Sajid Javid has resigned as Chancellor as he refused to sack his advisory team as Boris wanted.


A pub quiz question for the future - does this make him the only chancellor never to have delivered a budget then?

JohnB
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Re: The Budget - 11 March 2020

#283988

Postby JohnB » February 13th, 2020, 12:45 pm

Iain Macleod, he died having been in the office only a month, and Randolph Churchill, who proposed a radical budget and lost the "back me or sack me" argument.

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Re: The Budget - 11 March 2020

#284026

Postby Chrysalis » February 13th, 2020, 2:44 pm

I’ve just read that Cummings is no fan of the ‘idle rich’. Since the change of personnel in the Treasury can be expected to mean that the Budget will be more of a Cummings enterprise, I’m wondering what this might mean for personal taxation?

Anyone read any Cummings ramblings about pension tax relief? :lol:

scrumpyjack
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Re: The Budget - 11 March 2020

#284036

Postby scrumpyjack » February 13th, 2020, 3:11 pm

I have some sympathy with Boris on this. So often in the past governments have been disrupted by the power struggle and policy differences between Nr 10 and Nr 11 Downing St. There is a lot to be said for the PM putting his stamp on it early in his administration so that 10 and 11 are aligned in policy terms.

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Re: The Budget - 11 March 2020

#284522

Postby Charlottesquare » February 15th, 2020, 2:50 pm

I am going for restrictions on Entrepreneurs relief to catch all those contractors who may be looking to wind up their companies as my number one pick.

As an outside bet a further squeeze on BTL landlords (maybe also restricting interest relief in companies) coupled with some CGT relief to encourage them to sell up and increase housing supply for owner/occupiers. If they really want to take a pop at the sector encouragement to LAs to charge rates, not council tax, on AirBnB properties (they do already) but maybe residential caught by rates will not qualify for small business rates reliefs.

Some further pension tweaking like a first £xk income relief from tax re pensions received (similar to re dividend nil rate) may be on cards if they want to help their older voters, I see this as very much an outside bet.

Vat threshold increase come January 2021; one tax announcement at least needs a "look what we can now do after Brexit" appeal.

Will now go away and think up a few more.

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Re: The Budget - 11 March 2020

#284528

Postby JohnB » February 15th, 2020, 3:12 pm

As Cummings doesn't like the idle rich, I expect that the special 7.5% dividend tax rate will rise towards 20%, and the £2k allowance will be reduced.

scrumpyjack
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Re: The Budget - 11 March 2020

#284539

Postby scrumpyjack » February 15th, 2020, 3:43 pm

Better to scrap BPR and lower the IHT rate. BPR means the very very rich pay nothing and the middle classes get stuffed.

PinkDalek
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Re: The Budget - 11 March 2020

#284553

Postby PinkDalek » February 15th, 2020, 4:50 pm

scrumpyjack wrote:Better to scrap BPR and lower the IHT rate. BPR means the very very rich pay nothing and the middle classes get stuffed.



... and destroy AIM etc.

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Re: The Budget - 11 March 2020

#284668

Postby AF62 » February 16th, 2020, 9:54 am

Charlottesquare wrote:Vat threshold increase come January 2021; one tax announcement at least needs a "look what we can now do after Brexit" appeal.


If the VAT threshold moves significantly in any direction, moving it down is far more likely to happen. At the moment the £85k threshold inhibits business growth as those supplying consumers restrict themselves to stay under it, and lays a bear trap for those that fail to recognise they have gone past the threshold until too late. Meanwhile the less honest trade far over the limit but claim they do not.

A substantial increase would make all of those problems worse, and would cost the government a large sum of tax revenue with no control over who was benefiting from that spending.

On the other hand a substantial decrease in the threshold to levels where anyone trading other than as hobby would dramatically simplify things, level up the playing field for those who tried to stay within the rules and those who ignored them, and would bring in some more money for the government to spend on trains, buses, and whatever else Johnson/Cummings pet project is this week.

It will never happen though, it will likely just stay at £85k so effectively reduces through fiscal drag.

PinkDalek
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Re: The Budget - 11 March 2020

#284697

Postby PinkDalek » February 16th, 2020, 12:14 pm

The Budget may or may not be delayed:

Budget may be delayed, says Transport Secretary Grant Shapps
https://www.bbc.co.uk/news/uk-politics-51521295

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Re: The Budget - 11 March 2020

#284728

Postby Charlottesquare » February 16th, 2020, 2:16 pm

AF62 wrote:
Charlottesquare wrote:Vat threshold increase come January 2021; one tax announcement at least needs a "look what we can now do after Brexit" appeal.


If the VAT threshold moves significantly in any direction, moving it down is far more likely to happen. At the moment the £85k threshold inhibits business growth as those supplying consumers restrict themselves to stay under it, and lays a bear trap for those that fail to recognise they have gone past the threshold until too late. Meanwhile the less honest trade far over the limit but claim they do not.

A substantial increase would make all of those problems worse, and would cost the government a large sum of tax revenue with no control over who was benefiting from that spending.

On the other hand a substantial decrease in the threshold to levels where anyone trading other than as hobby would dramatically simplify things, level up the playing field for those who tried to stay within the rules and those who ignored them, and would bring in some more money for the government to spend on trains, buses, and whatever else Johnson/Cummings pet project is this week.

It will never happen though, it will likely just stay at £85k so effectively reduces through fiscal drag.


I was more looking at pay back re electoral bribes.

Whilst taking transactions outwith vat due to thresholds does have a cost it is not a full 20% cost, a good chunk of the 20% comes back to HMRC via extra Income Tax, less input vat is claimable, and vat still gets caught on all later business to business supplies in the supply chain- the only real loss to HMRC is where the last party in the chain sells B to C, the rest is mere timing re collection.

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Re: The Budget - 11 March 2020

#284729

Postby Charlottesquare » February 16th, 2020, 2:20 pm

scrumpyjack wrote:Better to scrap BPR and lower the IHT rate. BPR means the very very rich pay nothing and the middle classes get stuffed.


Somewhat generous to BTL landlords leaving their flats etc to their next of kin.

A tightening of definitions re APR qualification may however be on the cards.

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Re: The Budget - 11 March 2020

#284777

Postby AF62 » February 16th, 2020, 6:30 pm

Charlottesquare wrote:
AF62 wrote:
Charlottesquare wrote:Vat threshold increase come January 2021; one tax announcement at least needs a "look what we can now do after Brexit" appeal.


If the VAT threshold moves significantly in any direction, moving it down is far more likely to happen. At the moment the £85k threshold inhibits business growth as those supplying consumers restrict themselves to stay under it, and lays a bear trap for those that fail to recognise they have gone past the threshold until too late. Meanwhile the less honest trade far over the limit but claim they do not.

A substantial increase would make all of those problems worse, and would cost the government a large sum of tax revenue with no control over who was benefiting from that spending.

On the other hand a substantial decrease in the threshold to levels where anyone trading other than as hobby would dramatically simplify things, level up the playing field for those who tried to stay within the rules and those who ignored them, and would bring in some more money for the government to spend on trains, buses, and whatever else Johnson/Cummings pet project is this week.

It will never happen though, it will likely just stay at £85k so effectively reduces through fiscal drag.


I was more looking at pay back re electoral bribes.

Whilst taking transactions outwith vat due to thresholds does have a cost it is not a full 20% cost, a good chunk of the 20% comes back to HMRC via extra Income Tax, less input vat is claimable, and vat still gets caught on all later business to business supplies in the supply chain- the only real loss to HMRC is where the last party in the chain sells B to C, the rest is mere timing re collection.


The issue with that is the threshold doesn't impact anyone who is making business to business supplies as they will all be VAT registered, even if they are below the limit as they would voluntarily register as the VAT charged is irrelevant.

For those bumping below the threshold VAT reclaimable on purchases is often very little and the supply is frequently labour only - adding any materials would likely take them over the threshold.

So sure if you increased the threshold to encourage some to grow their business it would increase income tax, but it would be a big net cut to government income as the 'pyramid' of turnovers is very broad at the bottom, so for every one business who paid a bit more income tax, there would be fifty who paid less VAT.

As for it being an electoral bribe - I can't see it. The new northern voters who suddenly changed to be conservative supporters are far more likely to be employed who would be more impressed with infrastructure spending paid for by taxes, whilst 'white van man' who would benefit from an increase to the threshold likely already votes tory.

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Re: The Budget - 11 March 2020

#284778

Postby Charlottesquare » February 16th, 2020, 6:42 pm

AF62 wrote:
Charlottesquare wrote:
AF62 wrote:
If the VAT threshold moves significantly in any direction, moving it down is far more likely to happen. At the moment the £85k threshold inhibits business growth as those supplying consumers restrict themselves to stay under it, and lays a bear trap for those that fail to recognise they have gone past the threshold until too late. Meanwhile the less honest trade far over the limit but claim they do not.

A substantial increase would make all of those problems worse, and would cost the government a large sum of tax revenue with no control over who was benefiting from that spending.

On the other hand a substantial decrease in the threshold to levels where anyone trading other than as hobby would dramatically simplify things, level up the playing field for those who tried to stay within the rules and those who ignored them, and would bring in some more money for the government to spend on trains, buses, and whatever else Johnson/Cummings pet project is this week.

It will never happen though, it will likely just stay at £85k so effectively reduces through fiscal drag.


I was more looking at pay back re electoral bribes.

Whilst taking transactions outwith vat due to thresholds does have a cost it is not a full 20% cost, a good chunk of the 20% comes back to HMRC via extra Income Tax, less input vat is claimable, and vat still gets caught on all later business to business supplies in the supply chain- the only real loss to HMRC is where the last party in the chain sells B to C, the rest is mere timing re collection.


The issue with that is the threshold doesn't impact anyone who is making business to business supplies as they will all be VAT registered, even if they are below the limit as they would voluntarily register as the VAT charged is irrelevant.

For those bumping below the threshold VAT reclaimable on purchases is often very little and the supply is frequently labour only - adding any materials would likely take them over the threshold.

So sure if you increased the threshold to encourage some to grow their business it would increase income tax, but it would be a big net cut to government income as the 'pyramid' of turnovers is very broad at the bottom, so for every one business who paid a bit more income tax, there would be fifty who paid less VAT.

As for it being an electoral bribe - I can't see it. The new northern voters who suddenly changed to be conservative supporters are far more likely to be employed who would be more impressed with infrastructure spending paid for by taxes, whilst 'white van man' who would benefit from an increase to the threshold likely already votes tory.


Being cynical, the catch with infrastructure spend is little of it will be apparent on the ground by 2025 given the lead times from idea to completion, something more tangible may be needed.

PinkDalek
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Re: The Budget - 11 March 2020

#284780

Postby PinkDalek » February 16th, 2020, 7:00 pm

AF62 wrote:The issue with that is the threshold doesn't impact anyone who is making business to business supplies as they will all be VAT registered, even if they are below the limit as they would voluntarily register as the VAT charged is irrelevant.


I get your reasoning but maybe not if their customers are wholly or partially exempt.

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Re: The Budget - 11 March 2020

#284784

Postby AF62 » February 16th, 2020, 7:21 pm

Charlottesquare wrote:Being cynical, the catch with infrastructure spend is little of it will be apparent on the ground by 2025 given the lead times from idea to completion, something more tangible may be needed.


Still can't see it. If you want to throw money at the electorate then do it more directly such as increasing the NI threshold, rather than suffering a loss of tax which nobody will see and nobody will feel they have benefited from.

PinkDalek wrote:
AF62 wrote:The issue with that is the threshold doesn't impact anyone who is making business to business supplies as they will all be VAT registered, even if they are below the limit as they would voluntarily register as the VAT charged is irrelevant.


I get your reasoning but maybe not if their customers are wholly or partially exempt.


A reasonable point and that is not to say that wholly or partially exempt businesses would not prefer to avoid an irrecoverable VAT cost, but employing suppliers who are bumping up against the threshold tends not to be one of the methods used.

Most larger businesses prefer to receive supplies from VAT registered businesses whether or not they are wholly or partially exempt, as they tend to feel more secure doing business with a VAT registered supplier for a number of reasons.

That is not to say there may not be some small wholly or partially exempt businesses that take this route (I can think of a few potential examples), but that would be small against the total.
Last edited by AF62 on February 16th, 2020, 7:23 pm, edited 1 time in total.

PinkDalek
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Re: The Budget - 11 March 2020

#284786

Postby PinkDalek » February 16th, 2020, 7:22 pm

Yes, I don't disagree, but I was merely querying your use of "all" as against most.


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