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The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 12:35 pm
by PinkDalek
This is an attempt at restricting this discussion to what is announced, for future reference.

Budget 2021

The Chancellor of the Exchequer will present his Budget to Parliament on Wednesday 3 March 2021.


https://www.gov.uk/government/topical-events/budget-2021

I believe the live version will be broadcast here very soon https://www.bbc.co.uk/news/live/uk-politics-56252586.

The Budget 2021 Documents and related TIINs should be available soon after the Chancellor is seated and I hope someone can link to them here when they are available.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 12:36 pm
by swill453
PinkDalek wrote:This is an attempt at restricting this discussion to what is announced, for future reference.

Of course there may be nothing about tax, so this could be a short thread :-)

Scott.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:03 pm
by PinkDalek
"Personal tax thresholds to be frozen". Increasing wef 2022/23.

IHT thresholds also to be as is for the time-being.

FY 2023 CT rates increase to 25%. No mention of smaller companies so far.

Edit: Smaller companies up to £50,000 CT at 19%. Taper up to £250,000. Trading losses can be carried back for up to two years.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:06 pm
by swill453
Pension Lifetime Allowance frozen, which is a significant change affecting some.

Scott.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:31 pm
by PinkDalek
Income tax and National Insurance contributions

The government will maintain the income tax Personal Allowance and higher rate threshold and National Insurance contributions Upper Earnings Limit and Upper Profits Limit at their 2021-2022 levels up to and including 2025-2026. ...


https://www.gov.uk/guidance/income-tax-and-national-insurance-contributions

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:31 pm
by JohnB

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:34 pm
by PinkDalek
Corporate tax

Corporate tax rates and small profits thresholds from 2023. ...

https://www.gov.uk/guidance/corporate-tax

Detail of proposed taper not seen on the page. Other than:

Lower threshold £50,000
Upper threshold £250,000

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:36 pm
by PinkDalek
JohnB wrote:Treasury Budget 2021 page https://www.gov.uk/government/publicati ... -2021-html


Thanks. I'm out of time to look for the TIINs. Do you have a link?

Edit: Found them! https://www.gov.uk/government/collections/budget-2021-tax-related-documents#tax-information-and-impact-notes

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:38 pm
by JohnB
Capital gains allowance fixed at £12300 to 2026

TINNs???

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 1:44 pm
by chas49
JohnB wrote:TINNs???


Tax information and impact notes

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 2:55 pm
by Arborbridge
chas49 wrote:
JohnB wrote:TINNs???


Tax information and impact notes


Thanks for explaining. Another of those acronyms that appear fully formed in mid conversation without ever having been defined or in common usage here (or anywhere?)

It's like there's secret language people invent all of their own just to feel superior.

Arb.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:06 pm
by Adamski
This all sounds like good news to me. Had been speculation of higher taxes - effecting us investors - which have not materialised this time.

Bit concerned that Boris and Rishi are too relaxed about using the magic money tree, and the consequences of this spending spree.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:07 pm
by fisher
Pensions Lifetime Allowance – The government will maintain the Lifetime Allowance at its current level of £1,073,100 until April 2026.

Starting rate for savings tax band – The band of savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2021-22.

Individual Savings Account (ISA) annual subscription limit – The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.

Junior ISA and Child Trust Fund annual subscription limit – The annual subscription limit for Junior ISAs and Child Trust Funds for 2021-22 will remain unchanged at £9,000
.

No mention of the Dividend Allowance

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:10 pm
by fisher
Adamski wrote:This all sounds like good news to me. Had been speculation of higher taxes - effecting us investors - which have not materialised this time.

Bit concerned that Boris and Rishi are too relaxed about using the magic money tree, and the consequences of this spending spree.


There are "stealth taxes" in the freeze of personal allowances, higher rate income tax band, pension LTA, inheritance taxes etc. Also a big jump in Corporation Tax in 2023.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:21 pm
by chas49
Snorvey wrote:Shouldn't it be TIINs then?


(a little off-topic)
It is - and that's what PD said. It got mangled slightly when JohnB asked what it meant :)

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:34 pm
by billyfreezer
March 23rd is the key day for CGT announcements or property tax or wealth tax...etc
No idea why it's separate from the Budget, but it is.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 3:43 pm
by JohnB
https://www.gov.uk/government/news/gove ... n-23-march

None of the announcements will require legislation in the next Finance Bill or have an impact on the government’s finances.


They are consultations that will lead to future tax changes I guess.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 4:33 pm
by bluedonkey
Arborbridge wrote:
chas49 wrote:
JohnB wrote:TINNs???


Tax information and impact notes


Thanks for explaining. Another of those acronyms that appear fully formed in mid conversation without ever having been defined or in common usage here (or anywhere?)

It's like there's secret language people invent all of their own just to feel superior.

Arb.

Sadly, it's more a case of having had to gen up on the technical consequences of Budget announcements for too many years!

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 5:35 pm
by 1nvest
2 trillion UK debt - with negative real yields! Costing a low 1% average rate - so is being deflated by inflation. Costs 20Bn to service - which is comparable to the 500Bn of debt that was costing 20Bn to service at 4% yields back in 2007. Inflate the 2007 debt by 42% inflation since 2007; Also factor in that a large chunk of the debt is now held by the Bank of England who returns all interest paid back to the Treasury; And that the debt has been extended out further in time on average !!!

Why then yet more austerity, with tax allowances being frozen out to 2026, paramount to tax increases. And perhaps yet more to come on March 23rd when CGT/property/wealth tax announcements are scheduled.

ONS : General government deficit (or net borrowing) was £63.3 billion at the end of FYE 2020, equivalent to 2.9% of GDP.

So pre-Covid and the deficit was 'comfortable', and pre-Covid economic activities are anticipated to resume before FYE (April) 2022

Oh well! Missed opportunities, and builds up even more slack for the PM in waiting who will not only re-secure those lost to Tories voters in the last election but likely also see a large swelling as many others also follow that migration path after poorly managed Covid, Brexit ...etc. Much of the Brexit based Tory support that provided a significant majority will vaporise, such that my bet is that Labour will get in with a even larger majority than that of the current government come the next GE - which might more usually be concerning, however it could be a situation of Labour pledging to undo all of the wealth/property taxes that the Tories had imposed.

Interesting times. Debts that pay negative real yields, investors pay to lend to the Treasury - so are more like a Treasury asset. Blue turns red, red turns blue. All so Topsy turvy I no longer know left from right.

Re: The Budget - 3 March 2021 - Taxes Practical

Posted: March 3rd, 2021, 5:59 pm
by dealtn
1nvest wrote:2 trillion UK debt - with negative real yields! Costing a low 1% average rate - so is being deflated by inflation. Costs 20Bn to service - which is comparable to the 500Bn of debt that was costing 20Bn to service at 4% yields back in 2007. Inflate the 2007 debt by 42% inflation since 2007; Also factor in that a large chunk of the debt is now held by the Bank of England who returns all interest paid back to the Treasury; And that the debt has been extended out further in time on average !!!

Why then yet more austerity, with tax allowances being frozen out to 2026, paramount to tax increases. And perhaps yet more to come on March 23rd when CGT/property/wealth tax announcements are scheduled.

ONS : General government deficit (or net borrowing) was £63.3 billion at the end of FYE 2020, equivalent to 2.9% of GDP.

So pre-Covid and the deficit was 'comfortable', and pre-Covid economic activities are anticipated to resume before FYE (April) 2022

Oh well! Missed opportunities, and builds up even more slack for the PM in waiting who will not only re-secure those lost to Tories voters in the last election but likely also see a large swelling as many others also follow that migration path after poorly managed Covid, Brexit ...etc. Much of the Brexit based Tory support that provided a significant majority will vaporise, such that my bet is that Labour will get in with a even larger majority than that of the current government come the next GE - which might more usually be concerning, however it could be a situation of Labour pledging to undo all of the wealth/property taxes that the Tories had imposed.

Interesting times. Debts that pay negative real yields, investors pay to lend to the Treasury - so are more like a Treasury asset. Blue turns red, red turns blue. All so Topsy turvy I no longer know left from right.


What happens if market interest rates move to 2% (or 5%, or ...)? Real yields turn positive?

All that cheap debt rolls over to expensive debt and your £20bn interest service cost goes to £40bn, or £100bn or ...

If it happens there isn't a magic solution to rid us of the debt. Somebody with less a than frugal consumption taste that takes out a credit card with a low "teaser" rate might not realise the folly of building up such an easily serviceable debt until the real rate kicks in. He might not be able to service it, or pay it back.