[Finance] Tax Rates Going Forward

[blue-shifted]

1. This Tory government has systemically been collecting less tax than is required to sustain an adequate level of health, policing and education. We've seem evidence of that with the Covid-19 outbreak, the increase in knife crime and lower per head pupil spend.

2. Their 2019 manifesto has tied their hands on income tax, Employees NI and VAT rates. They cannot be changed.

3. The triple lock on state pensions guarantees they must rise at a rate of at least 2%. This cannot be changed.

4. A key tenet of Post-Brexit economic strategy depends upon Britain being a low tax economy to keep the foreign business we have got and attract investors. If Corporation Tax are raised then it is likely the economic effects of Brexit will worsen as investors move elsewhere.

5. How can they cut public spending after 10 years of austerity?

6. If you look at what taxes they can increase there's not much scope there either - directors have been financially smashed under lockdown with dividend not being recognised as earnings, so to hike dividend tax from 7 1/2% will be another attack on small businesses.

7. They'll increase Class 4 NI on the self-employed, they'll increase Capital Gains Tax and they may have to bite the bullet and increase Inheritance Tax and Stamp Duty Land Tax. However, this will be a drop in the ocean and won't even cover the drop in ordinary tax revenue from the economic slump.

I see a perfect storm coming our way in the winter.

Re 2 and 3.

You have huge faith in Boris's integrity re him keeping to his manifesto.

Manifesto "commitments" are guidelines at the best of times. In these times, I think they can be safely ditched. As per the pension triple lock. Utterly unsustainable and has to go. This is the excuse to do it.

 

[Mellor 3 Ward 4]

1.

2. Their 2019 manifesto has tied their hands on income tax, Employees NI and VAT rates. They cannot be changed.

.

I think COVID19 Changed everything.

 

[beorhthelm]

2. Their 2019 manifesto has tied their hands on income tax, Employees NI and VAT rates. They cannot be changed.

3. The triple lock on state pensions guarantees they must rise at a rate of at least 2%. This cannot be changed.

everything is subject to change.

 

[Pavilionaire]

Re 2 and 3.

You have huge faith in Boris's integrity re him keeping to his manifesto.

Manifesto "commitments" are guidelines at the best of times. In these times, I think they can be safely ditched. As per the pension triple lock. Utterly unsustainable and has to go. This is the excuse to do it.

It is in the Tory Party's DNA to cut taxes. Higher taxation is the biggest stick they beat Labour with. Johnson's manifesto pledges to spend, spend, spend and the results of Covid-19 proves - if any further proof were needed - they've lost the austerity argument. If they raise taxes they will have lost the tax argument as well, and as I said earlier if you raise taxes you make Britain a less attractive place for foreign investment, and that is something they can ill-afford as we approach the end of the transition period in just over 7 months.

 

[amexer]

1. This Tory government has systemically been collecting less tax than is required to sustain an adequate level of health, policing and education. We've seem evidence of that with the Covid-19 outbreak, the increase in knife crime and lower per head pupil spend.

2. Their 2019 manifesto has tied their hands on income tax, Employees NI and VAT rates. They cannot be changed.

3. The triple lock on state pensions guarantees they must rise at a rate of at least 2%. This cannot be changed.

4. A key tenet of Post-Brexit economic strategy depends upon Britain being a low tax economy to keep the foreign business we have got and attract investors. If Corporation Tax are raised then it is likely the economic effects of Brexit will worsen as investors move elsewhere.

5. How can they cut public spending after 10 years of austerity?

6. If you look at what taxes they can increase there's not much scope there either - directors have been financially smashed under lockdown with dividend not being recognised as earnings, so to hike dividend tax from 7 1/2% will be another attack on small businesses.

7. They'll increase Class 4 NI on the self-employed, they'll increase Capital Gains Tax and they may have to bite the bullet and increase Inheritance Tax and Stamp Duty Land Tax. However, this will be a drop in the ocean and won't even cover the drop in ordinary tax revenue from the economic slump.

I see a perfect storm coming our way in the winter.

So how do you suggest debt resulting from this virus is repaid

 

[Pavilionaire]

So how do you suggest debt resulting from this virus is repaid

I think the Tories will use a combination of the following:

1. Borrow, borrow and borrow more.
2. Welch on their obligations to repay the EU £40 billion and turn it into an 'Us vs Them' crusade.
3. Cut Corporation Tax to bring in foreign investment and out the EU's nose out of joint - 15% wouldn't surprise me.
4. Hike up dividend taxes so UK owner-managed business who gain on the CT pay that back - and then some - on dividends (while foreign businesses take their dividend and have it subject to tax in a tax haven).
5. Increase Class 4 NI from 9% to 12% for the self-employed, putting them on a equal footing with employees.
6. Increase Inheritance Tax and Capital Gains Tax.

 

[Westdene Seagull]

I think the Tories will use a combination of the following:

1. Borrow, borrow and borrow more.
2. Welch on their obligations to repay the EU £40 billion and turn it into an 'Us vs Them' crusade.
3. Cut Corporation Tax to bring in foreign investment and out the EU's nose out of joint - 15% wouldn't surprise me.
4. Hike up dividend taxes so UK owner-managed business who gain on the CT pay that back - and then some - on dividends (while foreign businesses take their dividend and have it subject to tax in a tax haven).
5. Increase Class 4 NI from 9% to 12% for the self-employed, putting them on a equal footing with employees.
6. Increase Inheritance Tax and Capital Gains Tax.

The question asked wasn't what do you think the Tory government would do - it was what would YOU do ?

 

[giveusfalmerplease]

wrong thread-deleted

 

[giveusfalmerplease]

trouble with inheritance tax is despite being small in the grand scheme of things, to the individuals who dont have expensive accountants to help them avoid it, the burden is huge. My cousin lived with her parents all her life and paid all the bills and the mortgage that her parents had, as well as funding ongoing repairs and an extension to the house (due to them both being ill and unable to work since their 30s). the house value increased from 100k to 700k over that time and when the parents died she was left facing a 200k inheritance tax bill. now thats definitely wrong.

 

[amexer]

I think the Tories will use a combination of the following:

1. Borrow, borrow and borrow more.
2. Welch on their obligations to repay the EU £40 billion and turn it into an 'Us vs Them' crusade.
3. Cut Corporation Tax to bring in foreign investment and out the EU's nose out of joint - 15% wouldn't surprise me.
4. Hike up dividend taxes so UK owner-managed business who gain on the CT pay that back - and then some - on dividends (while foreign businesses take their dividend and have it subject to tax in a tax haven).
5. Increase Class 4 NI from 9% to 12% for the self-employed, putting them on a equal footing with employees.
6. Increase Inheritance Tax and Capital Gains Tax.

Seems like you havent got an opinion .So assume just waiting to criticise whatever is done.

 

[Pavilionaire]

The question asked wasn't what do you think the Tory government would do - it was what would YOU do ?

Who cares what I'd do? If I'd have been Prime Minister I'd have done the opposite of them from the start, and I wouldn't have left the EU either.

Me personally - I'd reverse Brexit because I think that would immediately remove the threat of cliff edge, boost our economy and remove the question of paying back £40 billion with no discernable benefit coming the other way.

I'd borrow - out of necessity - I'd overhaul / simplify the tax system to remove the inequality, I'd raise CGT / IHT / Class 4 NI and I'd work with the EU to abolish tax havens.

 

[Glawstergull]

Who cares what I'd do? If I'd have been Prime Minister I'd have done the opposite of them from the start, and I wouldn't have left the EU either.

Me personally - I'd reverse Brexit because I think that would immediately remove the threat of cliff edge, boost our economy and remove the question of paying back £40 billion with no discernable benefit coming the other way.

I'd borrow - out of necessity - I'd overhaul / simplify the tax system to remove the inequality, I'd raise CGT / IHT / Class 4 NI and I'd work with the EU to abolish tax havens.

Whilst your at it why don't you save the whales and secure Peace in our time.

More importantly void the season and stop inevitable relegation.

 

[BLOCK F]

I think we always disagree on this issue.

There are ways round this.

Multi Nationals non UK Resident. You can tax a percentage of Global Profits based on either UK "point of sale receipts" OR based on commercial venues trading in the UK. Companies like Starbucks ain't gonna close all their UK streams of income just because you tax them more.

Individuals who leave and retain a property in the UK property. Levy a Vacant Property Tax on properties vacant more than 6 months based on Value. If they can afford to live anywhere around the World they will be high value properties. Charge them a 20% Vacancy Tax and it won't be quite as attractive to avoid there UK Taxes.

And if the decide to sell their property the Treasury will get SDLT from the purchaser and they won't be getting the benefits of Capital Value increases.

Loads of ways of closing Tax Avoidance. Successive Governments just haven't had the appetite for them. Corbyn did and that's why many wealthy people and businesses conspired against him getting elected.

Lots of non wealthy people didn't want Corbyn either, because he was useless and led the Labour Party down a blind alley.
Thankfully, Starmer will, I am sure, bring some sanity back to the party.

 

[LlcoolJ]

So how do you suggest debt resulting from this virus is repaid

It wont be repaid. Sovereign debt goes up not down. It's how it's serviced which is important. You fell for the lies after the financial crisis didn't you....... Tell me, how much did we repay during the years of austerity?

 

[beorhthelm]

I think the Tories will use a combination of the following:

1. Borrow, borrow and borrow more.
2. Welch on their obligations to repay the EU £40 billion and turn it into an 'Us vs Them' crusade.
3. Cut Corporation Tax to bring in foreign investment and out the EU's nose out of joint - 15% wouldn't surprise me.
4. Hike up dividend taxes so UK owner-managed business who gain on the CT pay that back - and then some - on dividends (while foreign businesses take their dividend and have it subject to tax in a tax haven).
5. Increase Class 4 NI from 9% to 12% for the self-employed, putting them on a equal footing with employees.
6. Increase Inheritance Tax and Capital Gains Tax.

thats quite a long list for a party you say dont want to tax. i think borrowing (inevitable) and NI are realistic (they've already reversed plan to cut Corporation Tax further).

new parliament means they have benefit of time, so short hike of income tax for couple of years will be electorally practical. if they have any balls they'll look at higher rate pension reflief, floated earlier in the year (maybe why Javid went?) and worth around £13bn i believe.

 

[Simster]

Personally I would like to see a big hike on inheritance tax to help pay for this.

I know this is unpopular in some quarters, but not only does it impact those who need the money least of all, but it also does more for fairer redistribution of wealth than any other tax. Most of us have kids, and yes our future inheritances and theirs would be impacted by this, but at the end of the day they have their whole lives ahead of them and really don't need the leg up that a hefty inheritance would provide. Especially at a time when food banks are busy, and Brexit was likely to hit the economy (at least in the short term) and that was before Covid 19 absolutely decimated it.

 

[BLOCK F]

Reckon they will go with higher levels of public debt and will be reluctant to raise tax by much in the short term, which could screw up any recovery.
Longer term, taxes will have to rise, but which ones are anyone's guess. Also, I would look at reform of public sector pensions which are no longer sustainable and are inequitable, when compared to the majority of private sector defined contribution schemes.I know this would be unpopular with many on here, but it would sweeten the medicine if MP's pensions were changed at the same time. The triple lock on state pensions has had a good run, but should now be for the gooner...........give some of the dosh saved to the younger generation me thinks, and I'm an old git of almost 72.

 

[beorhthelm]

Personally I would like to see a big hike on inheritance tax to help pay for this.

main problem with hitting IHT is its easily avoided while unduly politically sensitive. people will simply sell or otherwise distribute thier assets in their lifetime.

 

[Creaky]

It wont be repaid. Sovereign debt goes up not down. It's how it's serviced which is important. You fell for the lies after the financial crisis didn't you....... Tell me, how much did we repay during the years of austerity?

This - the last thing that the lenders want is for the debt to be repaid.

The majority of the U.K. National Debt is owed to UK based financial institutions, corporations and pension funds. Roughly 75% last year.

 

[Pavilionaire]

thats quite a long list for a party you say dont want to tax. i think borrowing (inevitable) and NI are realistic (they've already reversed plan to cut Corporation Tax further).

new parliament means they have benefit of time, so short hike of income tax for couple of years will be electorally practical. if they have any balls they'll look at higher rate pension relief, floated earlier in the year (maybe why Javid went?) and worth around £13bn i believe.

The Tories will need to come up with a few political tricks to ward off a more credible Labour Opposition.

Raising "wealth" taxes like IHT, CGT is an easy sell to the masses, particularly if it is coupled with a freeze in income tax, VAT and employees NI. I agree that Higher Rate tax relief on pension contributions could go too as - again - this is largely a perk for the better off.

Similarly, a rise in dividend tax is also an easy sell as it is perceived (wrongly, IMHO) that tax-dodging limited company directors are getting what they deserve.

I also think that if there is no deal with the EU and we have a Hard Brexit then he will have little choice but to reduce corporation tax to mitigate against the economic downturn associated with a flight of capital once we lose access to the Single Market. He's already referred to Singapore-style free ports, he is essentially a low-tax free marketeer at heart and and it will be an easy sell for him personally.