this one seems a bit less contriversial.. on the personal side, 45p rate now comes in where the personal allowance reductions stop (I think?) at ~£120k - cuts to CGT relief, other thresholds (tax free allowance etc) are erroded by inflation.
this is beyond a u-turn on the previous budget, its actively going in the other direction..
An easy £1250 from every highest rate tax payer (unless they all switch salary contributions into pension or choose to work part-time). No abolition of the 60% rate either. Not increasing headline rates is still in manifesto, no? Moving the boundaries was not a manifesto pledge.
Yeah a bit unexpected and I had to read it more than once to make sure I’d read it right.
Is anyone else finding this quite surreal?
Basically what they’re saying is “
remember that other budget a few weeks ago? We’ll just forget all that. Nothing to do with us at all, that, guv. Never heard of this Liz woman or that Kwasi Watsisname. So we’re now doing the polar opposite of what they did, so if you could kindly just erase what happened a few weeks ago from your memory, that would be great! Thanks! Move along now, nothing to see here”
Not much sign of taxing the wealthy though…
So we’re now doing the polar opposite of what they did, so if you could kindly just erase what happened a few weeks ago from your memory, that would be great! Thanks! Move along now, nothing to see here”
Isn't that what people of all sides were wanting?
Don't think there were any fans of Kwasi's budget.
Not much sign of taxing the wealthy though…
Turkeys don't vote for Christmas.
import tariffs removed on bike frames!
Wait. Did he just say no import costs on bicycle frames?
Import Tariffs removed for Bicycle frames.
You've won me over - where do I put my X ?
Not much sign of taxing the wealthy though…
We don't tax wealth, we tax income and expenditure. About a quarter of pensioner households have wealth in excess of one million pounds.
Isn't the bike frames bit more about business rather than personal?
Kind of my point. If we just treated capital gain as income we’d raise a lot of money and actually be taxing wealth rather than just earnings.
Not much sign of taxing the wealthy though…
Turkeys don’t vote for Christmas.
12 years of Torys in this country would suggest that they do, regularly.
Isn’t the bike frames bit more about business rather than personal?
Well yes but that should hopefully reduce the cost to the consumer too.
Isn’t that what people of all sides were wanting?
Don’t think there were any fans of Kwasi’s budget.
Indeed, but do you not find it quite surreal that they’re talking about it as if the people who carried out the suicidal experiment in simpleton economics were absolutely nothing to do with them? Like they were members of a different party altogether?
Hard to tax capital gains on housing as the assets are not liquid. They could remove capital gains on sales of primary residence. As for gains in pension funds - possible in the private sector, not the public service, where there is no fund to extract from!
energy price cap held but at £3000 for the next 12mo from April. Plus additional subsidies for the lower incomes, disabled, etc.
If this 'not a budget' is costed properly and can be afforded by the increase in taxes, etc., then it's actually sounding pretty good. Big IF......
Also - politics aside, he does come across as credible, which in itself is a massive improvement over the past few months.
Indeed, but do you not find it quite surreal that they’re talking about it as if the people who carried out the suicidal experiment in simpleton economics were absolutely nothing to do with them? Like they were members of a different party altogether?
The last six months have been surreal! 🙂
"Like they were members of a different party altogether?"
Yep - they have left labour nowhere to go. Proper difficult to follow that. Hopefully Rachel Reeves can ask some difficult questions
benefits, pensions and minimum wage all rising in line with inflation as well, its a big shift towards the centre for the tories.
As for gains in pension funds – possible in the private sector, not the public service, where there is no fund to extract from!
Pension income is already taxed so not really much need to do anything there, except perhaps charge NI.
Triple lock saved, that'll be another 4 years of Tory rule then 😭
They could remove capital gains on sales of primary residence.
You mean remove the CGT *exemption*, right? Yes they could and probably should.
Though TBH they should really allow index-linking on capital gains (used to be the case, removed a long time ago). An investment that keeps pace with inflation hasn't really made any money, you shouldn't be taxed on that as if you'd made a genuine gain.
Pah. Treat all capital gain as income and be done with it. I can see no real justification to treat it differently.
Hopefully Rachel Reeves can ask some difficult questions
I wouldn't hold your breath! 🙂
Isn’t that what people of all sides were wanting?
Yes, but it's the tories doing it so racist.
I take it the fuel duty rise is proceeding as it wasn't mentioned?
Labour won't dare mention Brexit, what a complete waste of space they are. Utterly useless spineless cowards the lot of them.
Is that Racheal Reeves speaking now I think she is doing a good job.
I agree with SuperScale20. And Reeves. Where's the long term investment? Where's the tax reforms for small businesses, especially those with a high street presence? Where's the mention of removing trade barriers? Where's the commitment to decarbonising our energy supply? Where's the focus on teaching and training? What about that social care plan promised in 2019? How about clawing back some of the billions lost in fraud and poor value (to put it mildly) contracts given to Tory VIPs under the cover of the pandemic?
Especially as its a response speech and not so rehersed (though obvs some of it is)
How many people in the £125-£150k income bracket will suddenly be increasing their salary sacrifice pension contributions ?
Pension income is already taxed so not really much need to do anything there, except perhaps charge NI.
The point about taxing wealth gains is that you have to be able to draw out the tax regularly. The increase in pension fund is a capital gain (if it grows) and that UNEARNED wealth is a juicy tax source for capital gains tax before you have retired. Can easily be paid by reducing fund size at the end of each tax year. Except for public sector employees who don't have any fund to remove from. Hence the dilemma. Easy source of possible tax grab, but not equitable.
And yes, for primary residence property sales it's exemption removal. Again, capital gains could be paid because there is cash to access at point of sale.
Most people would struggle to pay the capital gains on their house on an annual basis. CGT of 20% on a house of £250k growing at 5% per annum would still be a £2500 extra bill per annum per property.
be grateful we don't live in California where they pay annual property taxes related to property value
Most people would struggle to pay the capital gains on their house on an annual basis. CGT of 20% on a house of £250k growing at 5% per annum would still be a £2500 extra bill per annum per property.
But... income from working your arse off is taxed annually in that way, why not the wealth gained from the capital that's just sitting there (in many cases)? Taxing income only will always favour those sitting on capital rather than those living without much.
be grateful we don’t live in California where they pay annual property taxes related to property value
We "sort of" do. It's how local taxes are calculated. But it's never properly updated, and rolls off at a level being eroded fast by rising house prices. Additional higher bands are needed for council tax if we are to stick with it.
be grateful we don’t live in California where they pay annual property taxes related to property value
Council tax does the same doesn't it. OK, it's banded based on historic bandings, but my council tax bill goes up every year based on band?
But… income from working your arse off is taxed annually in that way, why not the wealth gained from the capital that’s just sitting there (in many cases).
Because people do not have access to their capital if it is tied up in a house. What do they pay it with. Selling their house?
All the more reason to tax it. Get some of that money back into the real economy. There are ways of people freeing up capital to pay a small share of that unearned wealth gain. We happily expect people who don't own property to magically find money for their rapidly rising rent. We reward people for sitting on wealth, while increasing taxes for those with none.
But… income from working your arse off is taxed annually in that way, why not the wealth gained from the capital that’s just sitting there (in many cases).
Yeah but unless you sell your house that capital doesn't exist. The only practical way of taxing capital gains on property is at the point of sale when the gain is realised.
You make it sound like people either own all or none of their property. The proportion of it they actually own changes every year, for most people. If we can gradually buy our homes, then we can either slow that accumulation or even in some cases reverse it. Selling a property is not the only point in which capital is or can be gained or released.
But again, I put the point that we ask people without property to magically find extra money in their budgets for increases in direct and indirect taxes, and ever increasing rent. But we have a "hands off" approach to people sitting on capital. It's an attitude that needs changing.
You make it sound like people either own all or none of their property. The proportion of it they actually own changes every year, for most people.
most people entirely own the house the day they buy it. There just happens to be some debt securitised on its value. That why, if prices drop, you don't get away with paying less mortgauge (and visa versa)
The obvious exception to this is shared ownership.
If you taxed capital gains as you're suggesting, you would end up forcing a granny to sell her one bed flat and move into rented accomodation. A really bad idea all round. taxing it at point of realisation (with a reduced deduction for primary residences) would be sensible
The value of a house is entirely made up, based on supply and demand, and peoples ability and desire to pay for it.
If you had to pay a tax based on its increase in value, then said value would not increase (or not increase as fast).
you would end up forcing a granny to sell her one bed flat and move into rented accomodation
Just like taxes paid on income, you could have thresholds, to protect those with lower value properties. Yes, you could be pushing a granny to sell the family four bed home and downsize.
then said value would not increase (or not increase as fast)
Absolutely. Making it easier for younger people to own their own home.
But this is why the change will never come... the votes of those who own their own homes, or multiple properties, are at risk. Our politics is skewed towards those with capital, and so our economy continues to be as well. Rising property prices have mattered to governments more than rising real term wages for far too long.
