[Politics] The Labour Government

[Bold Seagull]

I think more will return to the Tories but since you asked these are all very business friendly Reform policies:

Reform said it would reduce the main corporation tax rate from 25 per cent to 20 per cent and raise the threshold for paying the tax from £50,000 to £100,000.

Its other proposals for the economy include the abolition of IR35 regulations introduced by the Conservatives in recent years to govern off-payroll working.

Business rates would be scrapped for small and medium firms, while an online delivery tax, levied at 3 per cent, is intended to “create a fairer playing field” for high-street businesses versus online competitors.

The VAT threshold would be raised to £120,000 to “free small entrepreneurs from red tape”.

It would be like Truss and Kwasi never left office.

 

[dsr-burnley]

Great, but since they also want to end immigration where are the workers to support this growth coming from?

We don't need a million new workers every year. (OK, I get that only 300,000 of them are workers and the others are non-working people, mostly members of their families.) But we have over 5 million people on out-of-work benefits. Many of them want jobs but can't (apparently) find them. Plenty of slack in the system without needing to import workers.

 

[Weststander]

We don't need a million new workers every year. (OK, I get that only 300,000 of them are workers and the others are non-working people, mostly members of their families.) But we have over 5 million people on out-of-work benefits. Many of them want jobs but can't (apparently) find them. Plenty of slack in the system without needing to import workers.

A radio phone in covered exactly that. Many want to work, but are caught in age old cost of childcare v potential wages dilemma. Hopefully the recent changes will help.

 

[dsr-burnley]

Which manifesto promise is being breached?

Not this one - because that clearly applied to the NI I pay, not the NI my employer pays - and that's how I understood it: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.” They are not 'increasing the tax on the worker' so the context of the manifesto is being kept to.

Obviously there are two ways of interpreting the manifesto. Many people understood "we will not increase National Insurance" to mean that they would not increase National Insurance, which (if a manifesto was a contract) would certainly be the legal interpretation. But as a manifesto is not a contract, it can be made as misleading (deliberately or otherwise) as they wish, and if people niss the hidden trap, the party can laugh and say "fooled you".

Why do you think they didn't make it clear and say "we will not increase employees' National Insurance"? Was it because they had no intention of raising National Insurance at all and have now changed their mind but don't want to admit they've changed their mind? Was it because they didn't understand that National Insurance comes in two parts? Or was it a deliberate attempt to mislead?

 

[dsr-burnley]

A radio phone in covered exactly that. Many want to work, but are caught in age old cost of childcare v potential wages dilemma. Hopefully the recent changes will help.

Which is where Reform would say, and with some justification, that paying people as much to stop at home as they would pay them to work, is a sure way to collapse the economy. The obvious first step is to reduce the cost of childcare, as (I think) Johnson proposed, but too many people's incomes (especially the beaurocrats') depend on keeping the system complex and labour intensive.

 

[Weststander]

Which is where Reform would say, and with some justification, that paying people as much to stop at home as they would pay them to work, is a sure way to collapse the economy. The obvious first step is to reduce the cost of childcare, as (I think) Johnson proposed, but too many people's incomes (especially the beaurocrats') depend on keeping the system complex and labour intensive.

Is that the very British belt n braces thing? Look at the cost of new railways per mile compared to on the continent, there’s an astonishing stat I once posted on nsc. Similarly new housing building, even without the profit.

The UK in 2024 is a bloody expensive place.

 

[Guinness Boy]

We don't need a million new workers every year. (OK, I get that only 300,000 of them are workers and the others are non-working people, mostly members of their families.) But we have over 5 million people on out-of-work benefits. Many of them want jobs but can't (apparently) find them. Plenty of slack in the system without needing to import workers.

I think a lot of them don’t want jobs. And clearly almost none of them want to pick fruit, work in hotels or in the care sector.

 

[Bodian]

Obviously there are two ways of interpreting the manifesto. Many people understood "we will not increase National Insurance" to mean that they would not increase National Insurance, which (if a manifesto was a contract) would certainly be the legal interpretation. But as a manifesto is not a contract, it can be made as misleading (deliberately or otherwise) as they wish, and if people niss the hidden trap, the party can laugh and say "fooled you".

Why do you think they didn't make it clear and say "we will not increase employees' National Insurance"? Was it because they had no intention of raising National Insurance at all and have now changed their mind but don't want to admit they've changed their mind? Was it because they didn't understand that National Insurance comes in two parts? Or was it a deliberate attempt to mislead?

You have to read the whole clause/sentence. It basically says 'we won't increase taxes on working people - ie: their NI'. The NI bit is not separately addressed. It is in specific relation to workers.

Stop pretending that you think it meant something else.

 

[WATFORD zero]

It stuns me that after seeing what Truss and Kwarteng did in just a few hours of complete financial incompetence, @Giraffe and @dsr-burnley are now pushing for more of the same.

Or maybe it doesn't

 

[Bold Seagull]

It stuns me that after seeing what Truss and Kwarteng did in just a few hours of complete financial incompetence, @Giraffe and @dsr-burnley are now pushing for more of the same.

Or maybe it doesn't

Amazing ideological hubris that clearly some would vote for again despite the damage!

 

[nevergoagain]

IR35 was started by Labour in 2000.

It taxes cheating employers and de facto employees (using limited companies) from pretending the latter are genuine businesses carrying risks and controlling their working life. Famously John Birt head of the BBC was a tax cheat in the 90’s with his organisation’s collusion.

Depriving the public purse of billions in national insurance and tax.

The untold benefit of IR35 is that most people did the right thing and are engaged as employees.

Interesting one. I ran my ltd company and was outside of IR35 quite legitimately but the thought of going back on payroll was something I couldn't ever consider. Yes those ltd company contractors do benefit from lower personal tax but I paid way more tax overall than if I had been under PAYE when you consider the 20% VAT, Corp Tax, dividend tax, personal tax/NI etc. The forgotten element to that is that the contractor bears all the risk, no holiday pay, no sick pay, no pension/benefits etc. and the non earning gaps between assignments.

A lot of the roles needed in this sector are projects, which have a defined start and end point, if the employer doesn't have the staff in place to do it themselves then they will of course need to bring people in and it wouldn't make sense for them to do it as a perm role with all the other considerations that entails.

 

[A1X]

It stuns me that after seeing what Truss and Kwarteng did in just a few hours of complete financial incompetence, @Giraffe and @dsr-burnley are now pushing for more of the same.

Or maybe it doesn't

As with Brexit, it WILL work if only we did it HARDER. And believed in it more. And stopped listening to the experts.

 

[Weststander]

Interesting one. I ran my ltd company and was outside of IR35 quite legitimately but the thought of going back on payroll was something I couldn't ever consider. Yes those ltd company contractors do benefit from lower personal tax but I paid way more tax overall than if I had been under PAYE when you consider the 20% VAT, Corp Tax, dividend tax, personal tax/NI etc. The forgotten element to that is that the contractor bears all the risk, no holiday pay, no sick pay, no pension/benefits etc. and the non earning gaps between assignments.

A lot of the roles needed in this sector are projects, which have a defined start and end point, if the employer doesn't have the staff in place to do it themselves then they will of course need to bring people in and it wouldn't make sense for them to do it as a perm role with all the other considerations that entails.

The overall tax loss to us the public from ‘contractors’ who have a single employer is definite. The loss is from employers NI, employees NI and tax relief claimed by the ‘contractors’ on an array of expenses not available to employees. I won’t go into the detail here, but VAT, CT, income tax on dividends all balance out across all the businesses and individuals involved in the chain.

We know why contractors want to be contractors. A flexible life, much higher net income due to the lower taxes, usually paid significantly greater per hour.

But one or a contrived two clients, and not meeting long established tests on being a true business for tax purposes it was a sham. I personally know folk who were paid between £300 and £900 per day, to all intents they were an employee. Ignoring contracts drawn up to try to trick the courts, they were in reality under the control of the customer, they didn’t have substitute folk available to carry out identical work, didn't carry the risk of being sued by the engagers customer or anyone, worked regular hours and had to, it was a master and servant relationship.

 

[WATFORD zero]

As with Brexit, it WILL work if only we did it HARDER. And believed in it more. And stopped listening to the experts.

Brexit, Boris, Reform, it's almost as if they are following some strange plan to destroy the country

 

[Herr Tubthumper]

IR35 was started by Labour in 2000.

It taxes cheating employers and de facto employees (using limited companies) from pretending the latter are genuine businesses carrying risks and controlling their working life. Famously John Birt head of the BBC was a tax cheat in the 90’s with his organisation’s collusion.

Depriving the public purse of billions in national insurance and tax.

The untold benefit of IR35 is that most people did the right thing and are engaged as employees.

I’ll get back to the German Mittlestand discussion shortly.

Regarding your last sentence on IR35 , and only speaking from my sector and my contacts and experience within this sector , the vast majority still operate as Ltd companies. Even the reasonably recent change, where the burden and responsibility of employment status was placed on the end client, changed little. For example, everyone I knew who contracted for a major U.K. pharma switched to a small CRO which was outside of this new legislation and carried on as before. I know one agency which actively worked with the procurement department of a leading pharma and developed a handbook to facilitate hiring contractors outside of IR35. I literally only know 2 people who work under PAYE terms. I appreciate there are far more contractors/freelancers etc than I know but I just don’t see it in my field; are there any accurate figures regarding how many switched to PAYE/umbrellas etc.

There are laws in place in Germany to prevent disguised employment but they centre more on being a “true freelancer” and having multiple clients as opposed to the nature of the engagement like IR35 does. For the record I have two clients and no issues.

 

[Herr Tubthumper]

We don't need a million new workers every year. (OK, I get that only 300,000 of them are workers and the others are non-working people, mostly members of their families.) But we have over 5 million people on out-of-work benefits. Many of them want jobs but can't (apparently) find them. Plenty of slack in the system without needing to import workers.

You do need a million who are willing to work though.

 

[A1X]

Brexit, Boris, Reform, it's almost as if they are following some strange plan to destroy the country

I shall now post a definitely entirely unrelated GIF as a response

 

[Weststander]

I’ll get back to the German Mittlestand discussion shortly.

Regarding your last sentence on IR35 , and only speaking from my sector and my contacts and experience within this sector , the vast majority still operate as Ltd companies. Even the reasonably recent change, where the burden and responsibility of employment status was placed on the end client, changed little. For example, everyone I knew who contracted for a major U.K. pharma switched to a small CRO which was outside of this new legislation and carried on as before. I know one agency which actively worked with the procurement department of a leading pharma and developed a handbook to facilitate hiring contractors outside of IR35. I literally only know 2 people who work under PAYE terms. I appreciate there are far more contractors/freelancers etc than I know but I just don’t see it in my field; are there any accurate figures regarding how many switched to PAYE/umbrellas etc.

There are laws in place in Germany to prevent disguised employment but they centre more on being a “true freelancer” and having multiple clients as opposed to the nature of the engagement like IR35 does. For the record I have two clients and no issues.

To get into the nitty gritty further we'd have to see the precise details of each case, in effect doing the job of the tax tribunals or courts. What I do know is that here many people who used to be 'contractors' are now on payrolls. Both ex-clients and in my family.

Mittlestand, the German health system and German tertiary education ..... all world leading, the envy of Europe. And the public transport system seems pretty good too.

 

[chip]

To get into the nitty gritty further we'd have to see the precise details of each case, in effect doing the job of the tax tribunals or courts. What I do know is that here many people who used to be 'contractors' are now on payrolls. Both ex-clients and in my family.

Mittlestand, the German health system and German tertiary education ..... all world leading, the envy of Europe. And the public transport system seems pretty good too.

This is all true, but there if far greater wealth inequality in Germany than here and a right wing that makes Reform look like the scouts getting 30% in some states. Not sure that all our problems are really about money and worrying that someone else might be getting what I think is a slightly better deal than me. Keep encouraging the envy, it's great for mental health.

 

[Weststander]

This is all true, but there if far greater wealth inequality in Germany than here and a right wing that makes Reform look like the scouts getting 30% in some states. Not sure that all our problems are really about money and worrying that someone else might be getting what I think is a slightly better deal than me. Keep encouraging the envy, it's great for mental health.

I'm surprised, wealth inequality is the same in Germany as here according to the GINI Index (always mentioned by the socially minded as THE measure). There are an awful load of stinking rich people in both, and the top 20% have it all.