or to equity release on it. If it became a policy would mechanisms then be created to do it.
If people don't like a market created solution, maybe you could get a loan from the Gov to pay your annual capital tax, that then gets repaid on death as part of the estate?
What a silly idea.
Ok, house price goes down. Does the government pay you tax back?
I’m half reading this whilst in a meeting, for half a moment I actually thought this might have been a real thing.
I’m waiting until the evening news to find out about the budget in detail and see how badly we are hit
Council Tax is not the same as Californians can pay tens of thousands for family sized properties
IMO a modest annual wealth tax is worth considering but the big win would be removing the exemption from CGT for houses at the point of sale as TiReD suggested. And also taxing inheritances. It's really hard to argue that already rich heirs really need the huge unearned windfall of up to a million pounds completely free of all tax when low wage earners are being squeezed hard. No doubt there will be some smug rich homeowners along to argue the point shortly....
So the old couple who've lived in the same house all their married life that they bought in the 1970s for a few thousand pounds - how do you work the gains out on that? When most of the 'gains' are outside their control.
You're lumping all the cruise-taking, golf playing pensioner types in with the ones who've led modest lives and have assets because they didn't live extravagant lifestyles.
You the also get a country divide - pensioners in north in a 4 bed detached that could be worth 250k -v- the ones in the south east in a similar property but it's worth £750k. How would it be fair that the south east pensioner pays more?
benefits, pensions and minimum wage all rising in line with inflation while public sector workers are going to have to strike to achieve nothing like that, same old same old
There’s a Tory MP, Vicky Ford, on 5 live now defending non doms tax status.
It would raise 3 billion a year but we shouldn’t tax the non doms as they apparently invest in this country so making them pay tax would deter them 🙄
How many people in the £125-£150k income bracket will suddenly be increasing their salary sacrifice pension contributions ?
They are more than likely maxed out already
How would it be fair that the south east pensioner pays more?
Mechanisms of equity release would be made available. Unearned wealth is still wealth and this country does not tax wealth. The generation that bought properties cheaply, retired on final salary pensions before closing them, enjoyed unprecedented state pension growth and voted for Brexit to saddle the UK with a 4% drop in GDP (£50bn tax revenue right there).
benefits, pensions and minimum wage all rising in line with inflation while public sector workers are going to have to strike to achieve nothing like that, same old same old
Not knocking the people receiving it, but yes, it's a bugger. Good for my civil service colleagues struggling on minimum wage though.
HMRC won't be striking though, didn't reach the 50% turnout rule.
Given that those with the most wealth never have to pay CGT anyway its all a bit academic. If you are wealthy your assets are owned by a company, especially property, when you want to sell it you sell the company not the property so no Stamp duty. You register the company in your tax haven of choice so there is no CGT liability from the profit on the sale of the company. For good measure you can take money out of the company based on the asset value rising as a director tax free within limits. Its a very good scheme if your rich enough. This is what the Panama Papers made public
Re: heating oil & energy
The BBC said this "Those using heating oil will receive a payment of £200, rather than £100."
But the £100 2022 assistance hasn't happened yet in England and Wales. Has anyone had the £100 yet?
In NI the electric supplier is providing the refund as houses can have multiple oil providers, which is a sensible approach. My parents in N Wales haven't got a clue when or if they'll get the £100 this year. It's a mess
this country does not tax wealth
Neither do many, the trend has been to get rid them as they are not very effective - and those countries that do have them generally exempt your main home.
voted for Brexit to saddle the UK with a 4% drop in GDP (£50bn tax revenue right there).
This seems to be widely quoted but this is at best a forecast, which may or may not come to pass.
this is at best a forecast, which may or may not come to pass
As will be the treasury projected tax take. Expect a pensions fund bonanza. Today's OBR forecast is hardly looking like good news. Slide 9
Even by 2018 projection, we're down 5% whilst other countries are coming back to pre-pandemic.
Council tax revaluation should be a priority. The top band is currently taxed three times that of lowest band. There is significant scope to add bands and increase the spread to make it less regressive. I suspect there are also large numbers of extended or improved properties that have a low band.
So the old couple who’ve lived in the same house all their married life that they bought in the 1970s for a few thousand pounds – how do you work the gains out on that? When most of the ‘gains’ are outside their control.
You do it the exact same way you do it for anyone who has a second home. The system is not complicated and already in place, it's just that your main residence is exempt.
ven by 2018 projection, we’re down 5% whilst other countries are coming back to pre-pandemic.
Unlikely, that means we should have grown more than twice as much as France.
Don't mention the Brexit! Nothing to see, move along.
https://twitter.com/mrjamesob/status/1593215607058886656
Unlikely, that means we should have grown more than twice as much as France.
Correct. But we voted against that, so here we are. France, like most European countries, has lots of its own economic troubles right now, but at least we’re here to make them look (relatively) good.
You the also get a country divide – pensioners in north in a 4 bed detached that could be worth 250k -v- the ones in the south east in a similar property but it’s worth £750k. How would it be fair that the south east pensioner pays more?
It's more equitable than the current setup whereby they get a huge windfall when they sell it.
Having CGT when it's sold (and inheritance tax on the remainder) is entirely equitable.
Compare and contrast to energy companies' profits; the point of a windfall tax (or capital gains tax) is it taxes "unearned" profits you didn't expect to make and were not in your control.
CGT would mean that people currently sat on hundreds of thousands of pounds worth of profit, would have to pay 20% in tax to society, which seems unfair if you have to pay it, but if you're in your 20's or 30's and still trying to get on/climb the ladder you're expected to pay 100% of that profit to the person selling?
Best implementation would just be to replace stamp duty with CGT.
If your job changes location, you're currently penalized for moving with it. Encouraging long commutes and associated pollution. Far better to build a system that makes it easy to move where people need to be.
Pretty generous again for individuals. Income tax & NI frozen. Cost of living help extended.
It's increasing dependency on handouts, though. Where's the investment in skills, roads, rail, building schools, training doctors & nurses etc?
Too much hope, not enough long-term planning.
Income tax & NI frozen.
It’s a tax rise, when thresholds are frozen and incomes need to rise 10% to keep up with the cost of living.
Where’s the investment in skills, roads, rail, building schools, training doctors & nurses etc?
Too much hope, not enough long-term planning.
This.
Where’s the investment in skills, roads, rail, building schools, training doctors & nurses etc?
It’s all been sacrificed on the alter of a 120 billion pound white elephant so you can get from Birmingham to London a bit quicker, should the mood take you
The problem isn’t building HS2, the problem is stopping there.
HS2 was always a ridiculous white elephant, but given the present economic climate it’s complete and utter madness
Council Tax is not the same as Californians can pay tens of thousands for family sized properties
It's nigh on impossible to do direct comparisons of one countries tax for a particular thing against another. They may pay more in property taxes, however things like their sales tax at 7.25% is lower than our VAT. In addition, US income taxes are lower than here, particularly at the high salary end of the scale, where these high home tax people are probably earning. Then you've got much lower petrol prices etc.
No, I disagree. HS2 not only make journey's quicker, but increases the number of people who can use the railway. It has suffered from NIMBY-ism (having to build a tunnel through the Chilterns). IMO the UK should do more of this kind of thing, we need the experience!
Investing in rail networks is perfect 'levelling up' It allows poorer people to commute into prosperous areas.
I wonder how much tax Sunak pays on his Californian property.
It’s all been sacrificed on the alter of a 120 billion pound white elephant so you can get from Birmingham to London a bit quicker, should the mood take you
Much as I think hs2 is a colossal waste of cash, at this point, how many billions would it cost to not build it, not have whatever minor benefits it might bring, undo the half done work etc etc etc?
Yes it's a waste of 120 billion but not building it could very easily be a waste of 100.
Investing in rail networks is perfect ‘levelling up’ It allows poorer people to commute into prosperous areas.
Ah yes, level up Birmingham by encouraging everyone to bugger off to London for twelve hours a day and earn more money there, increasing investment in London at the expense of Birmingham and generally doing a great job of making the UK even more London centric. Oh it'll also allow those on better wages in London who can't afford to live in a decent part of the capital to push up house prices in decent parts of Birmingham and the rest of the route to make them even more unaffordable to those working locally on lower wages.
What leveling up needs is the UK to stop acting like London is the only show in town, improved passenger rail into London is quite the opposite of that.
Big raid on renewables in the Green Book…
5.33 Electricity Generator Levy – The government is introducing the Electricity Generator Levy, a temporary 45% tax that will be levied on extraordinary returns from low-carbon UK electricity generation. For the purposes of the tax, extraordinary returns will be defined as the aggregate revenue that generators make in a period from in-scope generation at an average output price above £75/MWh. The tax will be limited to generators whose in-scope generation output exceeds 100GWh across a period and will only then apply to extraordinary returns exceeding £10 million. The tax will apply to extraordinary returns arising from 1 January 2023 and will be legislated for in Spring Finance Bill 2023.
No mention of giving them the tax loophole Shell has used to avoid paying the levy.
No reference to fuel duty levy in Hunt's budget but the OBR have assumed 12p/ltr from April 23 in their calcs.
If that happens - ouch.
If it doesn't, the 'black hole' will deepen.
I'm waiting for more detailed analysis of the whole package to take a better informed view.
Biggest fall in living standards since records began in 1950s; obviously that fall won't be felt equally by everyone.
I just saw that too. 12p a litre! The tabloids are gonna love that - no wonder he 'forgot' to mention it
https://twitter.com/LiamHalligan/status/1593250257672208386
TBF, the original plan was to extend HS rail to Leeds, Manchester and Sheffield.
Again, it's capacity, not just speed; this will take cars and freight off the roads too.
Remember, it's a railway for the masses, not a door2door taxi service.
In theory, it's an excellent idea. In reality, it has been dogged by local opposition and probably a lack of civil engineering skill/experience in the UK.
It might look like a waste of money during construction - the benefits are due much further into the future. High speed rail is still a good idea, especially if you care about 'social mobility'.
Just had a crafty glance at the comments on the Daily Heil story.
Guess what? Everyone's blaming refugees.
5p/litre of the 12p/litre is the end of the temp drop in fuel duty from this year thats ending. I guess they're hoping it'll come out in the wash of pump prices dropping generally (as oil price drops and the pound starts to rebound)
HS2 was always a ridiculous white elephant,
Nah, it's an essential part of a modern country. You can't complain about not having modern infrastructure then also complain when they try to give it to us.
Admittedly, they should maybe have done different bits first e.g. a trans-Pennine route, but that's a different argument. We need HS2, 3, 4, 5, 6, 7, 8 and probably more. Also they should have been operated with a view to building jobs, skills and industries in the UK not contracting out to foreign bidders. But HS2 is in no way a white elephant.
The fuel duty super-indexation assumed by OBR in their calcs is RPI plus 5p which is projected to be a total of 12p/ltr.
It would take a significant fall in fuel prices to mitigate that.
It's also questionable whether £ will retain recent gains against $.
Ah yes, level up Birmingham by encouraging everyone to bugger off to London for twelve hours a day and earn more money there, increasing investment in London at the expense of Birmingham
These things benefit both ends.
They are putting UP fuel duty by 12p/litre in this environment?? As well as home energy cost increases.
Our energy market is completely broken. Having to charge renewables producers a windfall tax whilst taking nothing from the North Sea companies is just utterly bonkers.
HS2 constrained to London - Birmingham will bring limited economic benefits for the capital cost involved.
It's real benefit - and an integral part of the levelling-up agenda - would have come from phases 2a & 2b.
An additional point is the UK has a poor track record (no pun) in delivering large scale/critical national infrastructure projects.
We cannot continue trying to live with infrastructure which, in too many cases, dates to the Victorian era; rail lines and water/sewage systems are prime examples.
dantsw13 - we don't whether or not fuel duty will increase in April; Hunt was silent on the matter but the OBR have assumed 12p.
molgrips - why would you want an infrastructure project which will further, and disproportionely, benefit London whilst delivering limited benefits elsewhere - and no benefit north of birmingham?
So far (it always takes time to work out what the hell is really in a slippery Sunak budget, and let’s face it this is his budget) it looks as if all the biggest new austerity measures kick in after the next election… what’s the implications for that? Just trying to make it the next government’s problem? Or signalling to his small state low tax low spending enthusiast back benchers, while delivering them little?
What a silly idea.
Ok, house price goes down. Does the government pay you tax back?
I’m half reading this whilst in a meeting, for half a moment I actually thought this might have been a real thing.
Exactly my thoughts…
So I have used my money that I have earned and paid income tax on , to buy a house ( my only residence). To buy that house, I have taken a mortgage that I have paid interest on ( probably ended up paying more than 50% more than it’s face value at time of buying)
And now you want to introduce a new tax, where I have to pay a yearly sum based upon whatever someone has decided that house is worth at that time .
Yeah right …. I’m oot 🙄
kelvin - in part, it's based on hope that there will be some sort of economic recovery before the next election which will (partially) mitigate any austerity from '25 onwards; it's also a potential problem for a new gov.
As for understanding the full implications of any budget, it's always best to wait until the professionals complete their analyses; for me, that will be Capital Economics and Pantheon.
I've already had a summary from my accountant - which landed only 3 hrs after Hunt sat down so probably has limited value.
Next one will be from my IFA.
Yeah right …. I’m oot
Yep, it’ll never happen here because people want to protect their capital earnings from the tax man. So the rich get richer, while those without capital must keep paying more and more tax on their earnings from working.
