*** The 2017 Budget *** Official Matchday thread

[greyseagull]

A review of how different ways of working are taxed is expected to be announced in the Budget tomorrow, which experts predict will result in the self-employed paying more with an increase in NI being heavily tipped, which doesn't help me.

What else we know:

- The chancellor Philip Hammond will outline plans in Wednesday’s Budget to make hundreds of millions of pounds available to scientists and researchers to develop solutions to hi-tech challenges including artificial intelligence and robotics

- The chancellor has come under severe pressure to ease the burden of steep rises in business rates for some companies in London and the south-east following the revaluation of properties this year. The chancellor has told MPs that he has been listening to concerns and will act to help small companies facing the largest increases.

- He is likely to publish a consultation document with suggestions to reduce the favourable tax treatment of the self-employed and incorporated businesses and could also announce an increase in national insurance for the self-employed and a further increase in dividend taxation.

- The chancellor will also set out out further details on making sure the UK is at the leading edge of 5G mobile phone technology

- Mr Hammond is expected to allocate more than £500 million from the National Productivity Investment Fund (NPIF)

- £270 million will be earmarked for British businesses and universities to meet specific challenges with huge potential, which will include the use of robots to work in nuclear and offshore power generation, space and deep mining

- They will forge ahead with a new generation of grammars, earmarking £320 million to fund 140 new free schools.

 

[James Bond's body double]

Derby & Massive expected to be given £100 million for new strikers.

 

[Pavilionaire]

Why THE HELL does the Chancellor think the self-employed should pay exactly the same tax as employees? Things that employees get that the self-employed don't:

1. Set salary payment
2. Paid holiday / sick leave
3. Auto-enrolment employer's pension contributions
4. Opportunity for training / certification at company expense
5. Possible access to benefits-in-kind, i.e. medical / health insurance
6. PAYE tax so no tax compliance costs.

 

[Titanic]

Why THE HELL does the Chancellor think the self-employed should pay exactly the same tax as employees? Things that employees get that the self-employed don't:

1. Set salary payment
2. Paid holiday / sick leave
3. Auto-enrolment employer's pension contributions
4. Opportunity for training / certification at company expense
5. Possible access to benefits-in-kind, i.e. medical / health insurance
6. PAYE tax so no tax compliance costs.

The self-employed get the chance to 'manage' how much tax they pay.

 

[Herr Tubthumper]

The self-employed get the chance to 'manage' how much tax they pay.

Shame he doesn't go after big corporations who do the same, or worse, and deny the nation far far more.

 

[Pavilionaire]

The self-employed get the chance to 'manage' how much tax they pay.

Not much scope for management these days with the dividend tax. The reality is that a director of an owner managed company on £30K has just seen their personal tax increase by £970 in 2016/17. That's an effective tax increase of 3.24%.

It is obvious from the Tory chatter that there is an appetite to equalise personal taxation, meaning that dividend tax will rise to at least 9% to match Class 4 NI paid by the self-employed, so that is another 1 1/2% rise on the cards. I'm expecting him to commit to raising dividend tax to 12% by the end of the Parliament so that it matches Class 1 NI paid by employees.

 

[Herr Tubthumper]

Not much scope for management these days with the dividend tax. The reality is that a director of an owner managed company on £30K has just seen their personal tax increase by £970 in 2016/17. That's an effective tax increase of 3.24%.

It is obvious from the Tory chatter that there is an appetite to equalise personal taxation, meaning that dividend tax will rise to at least 9% to match Class 4 NI paid by the self-employed, so that is another 1 1/2% rise on the cards. I'm expecting him to commit to raising dividend tax to 12% by the end of the Parliament so that it matches Class 1 NI paid by employees.

Dividend tax is 30.5% here in Germany.

 

[Notters]

 

[kingcole]

Not much scope for management these days with the dividend tax. The reality is that a director of an owner managed company on £30K has just seen their personal tax increase by £970 in 2016/17. That's an effective tax increase of 3.24%.

It is obvious from the Tory chatter that there is an appetite to equalise personal taxation, meaning that dividend tax will rise to at least 9% to match Class 4 NI paid by the self-employed, so that is another 1 1/2% rise on the cards. I'm expecting him to commit to raising dividend tax to 12% by the end of the Parliament so that it matches Class 1 NI paid by employees.

Such talk is muddying the big difference between the self employed and those who are employed company owners.

The self employed cannot really control how much tax they pay apart from refusing working or taking it in a different tax year. No different to an employed person taking a job either side of the tax year to benefit from whatever rates are on offer at the time.

I see no reason why the self employed should not have the same NI as an employed person. Remember, they still don't have employer NI to contend with.

Company owners can control their income by choosing when dividends are paid. Remember, dividends are now taxed and are paid from profits AFTER the company has paid corporation tax. So an additional rate tax payer would pay dividend tax at 38.1% after the company has already paid 20% corporation tax. Conversly the self employed or employed person in such a tax bracket would only be paying 2% NI over and above £827pw.

Conclusion is that the additional NI rate for the self employed is justified but any more tinkering the dividend tax rates that would penalise the company owners who already risk all and create jobs would not be a great move.

An easy target is the huge reliefs that are avaialble to the wealthy with regards to savings. Most will consider themselves lucky if they have £50 left to save at the end of the month, yet from April the ISA limit is increasing to an astonishing £20,000. So, if you earn enough money to be able to save £20,000 a year, you can do so and not pay a penny tax on it. I should stress that this allowance is in addition to the £1000 we can earn in interest without paying tax. At today's paltry interest rates, one might need £100k save to use this allowance to the max.

Also, note that the ISA limit has been increasing year on year. There are now a large number of wealthy people who have been able to shelter over £1m in ISA's and not pay a penny tax on their interest or dividends. How can this be just? A well invested £1m pot would likely be generating up to £50k a year income and if this was tax normally the government coffers would be boosted by £10k to £27500 for each ISA millionaire.

Then we have the hugely genourous limits for pensions. Who can afford to to save £40k into their pension each year? If you are rich enough HMRC will give you tax releif at your margin rate which could mean if you earn loads you just need to pay £22k of your own money and the government will put in £18k gratis!

But it gets worse! If you have not used your pension allowance from previous years, you can use this year's allowance and the previous 3 years! Mental.

Conclusion

ISA's:-

Make it so that the maximum than can be held tax free in an ISA is £100,000. And reduce the annual ISA limit to £6000. If you are lucky enough to be able to save £500pm then go for it. This move would earn HMRC billions in extra tax and might at the same time encourage those who have huge sums in their ISA's to take it out and spend it, thus helping the economy.

Pensions:-

Eliminate the ability to backdate pensions 3 years with immediate effect. A compromise might be to allow one year so that contracters with erratic incomes can take advantage in their better years. At the same time, reduce the annual limit to £30,000 from £40,000 but give everyone tax relief at 30%. It's simply not fair that someone on £150k PA gets over twice as much tax releif as someone on the average wage.

This move would ensure the maximum tax liabiilty HMRC have per person would be £9000 instead of the £76,500 you could get in releif this year!

 

[wellquickwoody]

The Tories could say absolutely anything and Jezza wouldn't agree with it.

They could offer increased benfits for all, a shorter working week, more money for the NHS, free University places for the poorest 50%, Unhindered migration from Ireland, Syria and Libya, refusal to recognise the legitimacy of Pres Trumpy, extra money for being female and other equality addressing plans ad infinitum. But Jezza wouldn't agree with any of them as it is easier to protest than to act.

 

[beorhthelm]

i predict those complaining of anti-tax avoidance/evasion criticising any changes to NI and dividends, despite them having called for these changes for years, as they suddenly find out its not just high income individuals using these methods.

 

[Pavilionaire]

The cynic in me wonders whether by putting the self-employed on an equal tax footing to the employed that this will foster a climate of resentment towards the employed who have greater security, thereby creating the conditions to "row back" on the rights for employees that were fought for and won by the EU Parliament.

 

[beorhthelm]

The cynic in me wonders whether by putting the self-employed on an equal tax footing to the employed that this will foster a climate of resentment towards the employed who have greater security, thereby creating the conditions to "row back" on the rights for employees that were fought for and won by the EU Parliament.

think thats way too cynical, and illogical when most people are employed. your list previous page is mostly employer benefits, while NI contributes to state benefits which are broadly the same regardless of your employment.

 

[Tricky Dicky]

I thought I'd heard that the inheritance tax threshold was going up from 325k to 500k, but could be wrong.

 

[Driver8]

I thought I'd heard that the inheritance tax threshold was going up from 325k to 500k, but could be wrong.

Already in statute. £425k from April 17, £450k from April 18, £475k from April 19 and £500k from April 20. You need to have a main residence worth at least as much as the extra above £325k and pass it to direct lineal descendants (children, grandchildren etc).

 

[Tricky Dicky]

Already in statute. £425k from April 17, £450k from April 18, £475k from April 19 and £500k from April 20. You need to have a main residence worth at least as much as the extra above £325k and pass it to direct lineal descendants (children, grandchildren etc).

Ah, ok, ta.

 

[nicko31]

Why THE HELL does the Chancellor think the self-employed should pay exactly the same tax as employees? Things that employees get that the self-employed don't:

1. Set salary payment
2. Paid holiday / sick leave
3. Auto-enrolment employer's pension contributions
4. Opportunity for training / certification at company expense
5. Possible access to benefits-in-kind, i.e. medical / health insurance
6. PAYE tax so no tax compliance costs.

If there isn't a tax benefit in being self employed why take the risk?

 

[beorhthelm]

If there isn't a tax benefit in being self employed why take the risk?

charge/earn more, flexible hours are the obvious answers.

 

[Taybha]

Hope they put up that foul tasting ageing hippy craft beer by a fiver a pint and reduce the price of lager and lime by 50 %

 

[deletebeepbeepbeep]

I expect we will get the promise for more money to the NHS and social services which will just be the same money announced at a previous budget and announcement of a Brexit war chest even though Brexit is going swimmingly and we should be getting that £350m a week back imminently.