July 2015 budget

[Bob!]

Not good for all the workers who currently earn £7.20 an hour (70p an hour above NMW) who probably wont get a pay rise in 2016 as their employer decides to pay the "living wage"

So a 70p (nearly 11%) rise is "not good for all the workers"? Is that the best Labourites have got today?

What he's saying is that someone on £7.20ph currently will get nothing.

At least that's how I read it.

 

[El Presidente]

I have but I genuinely have no idea what she did/does with her time. How would I?

(There's a slim chance I was told, of course, and my cider consumption of the time put paid to that particular memory, but it's not something I have any genuine memory of.)

Sorry for being so aggressive then.

 

[Thunder Bolt]

"Vehicle excise duty will be used to invest in roads... every single penny raised from VED will be used to improve the roads though a new Roads Fund"

Mr Osborne said: "There will be no change to VED for existing cars - no one will pay more in tax than they do today for the car they already own."

Phew! I saw £140 a year, & was having a minor panic, seeing as our VED is £30 a year on our car.

 

[Bob!]

I voted Labour earlier this year but that seems like a decent budget, other than the measures to help thier mates which is to be expected- cutting corporation tax, scrapping inheritance tax and capping public sector pay.

Introducing a decent level of living wage and cutting landlords tax perks are excellent and unexpected measures. I hope we see other measures to reduce landlords stranglehold over the housing market.

Where has the 'like' button gone?

 

[seagullsovergrimsby]

What he's saying is that someone on £7.20ph currently will get nothing.

At least that's how I read it.

Exactamundo

 

[El Presidente]

Indeed.

But I'm sure there's a happy medium that can be found that doesn't involve paying as little taxable income as possible. These chaps must have access to a calculator and/or spreadsheet to work it out if they really want to. I suspect most don't want to.

Originally being a company was substantially advantageous and the government did try to persuade people to set up SMEs this way. Today there's a threshold above which it's better to be incorporated and that has changed at practically every budget in the last ten years.

A good system would make the whole issue tax neutral, but it's never been that way.

It's the same as the government encouraging people to buy diesel cars and then reversing the fuel duty differential on unleaded and diesel fuel.

 

[Bozza]

In truth, I find it hard to believe that simplifying personal tax rates isn't possible. For example, why doesn't any government abolish NI completely, and roll it into income tax? It would eliminate the issue of low salary/high dividends almost overnight. I'm sure some of the complex tax laws do little more than keep certain accountants in a job.

Combining income tax and NI was mooted as a possibility for today, but it didn't appear. I agree though, hopefully it's something that is in the melting pot for the near future.

 

[El Presidente]

I have to take issue with this. When you set yourself up as a firm, you end up having to pay both employee and employer national insurance. It's an odd situation but if you try and do the "right" thing by paying yourself a large salary as opposed to a large dividend, you actually end up getting clobbered twice as badly.

If you pay yourself £670 a month as a salary then no PAYE or NI. Extract the remainder as a dividend if you want more.

However if you're already salaried as well then there is no point doing this and you pay corporation tax at 20% and then 32.5% on the dividends.

 

[Simster]

Combining income tax and NI was mooted as a possibility for today, but it didn't appear. I agree though, hopefully it's something that is in the melting pot for the near future.

It will never get done. The problem is that it is the sort of policy that makes perfect sense but the risk is that it will be slaughtered as a "tax increase" by the opposition to the government of the day. Regardless of who has the balls to do it, it will need to be done in the first or second year.

 

[LamieRobertson]

L

2016:

"Over 1m people are expected to recieve a tax cut after George Osborne announced a major overhaul of the tax system on dividends.

The chancellor today said the dividend tax credit was to be replaced with a “tax-free allowance of £5,000” for all taxpayers on dividend income.

Dividends received above that amount will be taxed at 7.5 per cent, 32.5 per cent or 38.1 per cent, depending on the individual’s tax band.

The changes are set to come into force in 2016."

I must admit I have no idea what this really means for the one-man-bands types as opposed to investors taking dividends from listed companies they hold stock in.

On the face of it less economic to trade as Ltd rather than sole trader ..whereas before you could in SOME situations avoid tax and NI by taking say a salary up to your personal allowance and the rest in divs..now it would seem that diva is capped at 5k then u get taxed...being Ltd does hav other benefits but record keeping is more stringent and accountants fees possibly higher ...re the private investor that just means he doesn't have to hold all his investments in say an ISA to avoid tax on divs etc
Well that's just my 'limited' understanding and initial reaction

 

[Simster]

If you pay yourself £670 a month as a salary then no PAYE or NI. Extract the remainder as a dividend if you want more.

However if you're already salaried as well then there is no point doing this and you pay corporation tax at 20% and then 32.5% on the dividends.

You can pick and choose specific figures and rates, but regardless, what's wrong with simply merging NI and income tax?

 

[LamieRobertson]

If you pay yourself £670 a month as a salary then no PAYE or NI. Extract the remainder as a dividend if you want more.

However if you're already salaried as well then there is no point doing this and you pay corporation tax at 20% and then 32.5% on the dividends.

Just to note CT being reduced to 19% I think

 

[Papa Lazarou]

Just to note CT being reduced to 19% I think

Not yet it hasn't.

 

[LamieRobertson]

Not yet it hasn't.

Nor has the new div tax?

 

[BLOCK F]

In truth, I find it hard to believe that simplifying personal tax rates isn't possible. For example, why doesn't any government abolish NI completely, and roll it into income tax? It would eliminate the issue of low salary/high dividends almost overnight. I'm sure some of the complex tax laws do little more than keep certain accountants in a job.

Wouldn't be good news for us pensioners who pay no NI !!

 

[Papa Lazarou]

Nor has the new div tax?

Nope - nothing yet.

 

[Simster]

Wouldn't be good news for us pensioners who pay no NI !!

Surely an increase to the pensioner tax allowance threshold would resolve that? Far better than the current nonsense.

 

[Bozza]

Anyway, the point I was clumsily trying to make, and wasn't attempting to get personal about, is that nearly everyone will do whatever they can to minimise their own tax position.

It seems to be one element of human nature that is almost universal.

Many of those people will still look to criticise others who do the same.

 

[Papa Lazarou]

Anyway, the point I was clumsily trying to make, and wasn't attempting to get personal about, is that nearly everyone will do whatever they can to minimise their own tax position.

It seems to be one element of human nature that is almost universal.

Many of those people will still look to criticise others who do the same.

It's brings Tories and Labour supporters together

 

[BLOCK F]

Surely an increase to the pensioner tax allowance threshold would resolve that? Far better than the current nonsense.

May do, I suppose.
No doubt there would be problems/ unintended consequences etc. Needs the 'pencilnecks' to come up with a few proposals.
Regardless of the above question,the whole tax system desperately needs simplifying; I think we would all agree.