Budget 29/10/18 What do we expect?
Discussion
Reading a number of news outlets and economists views it looks like this will likely be a tax rising budget which would then be followed up after Brexit next year depending on how things do or don’t go.
What do we expect?
My hunches
1. Pension tax relief restricted to 20% for all
2. 1% on National Insurance
3. 2% on VAT
4. Freezing the tax limits
5. Lowering the starting point of the removal of the tax free allowance from £100k to £60k
6. Increase in fuel duty - environment reasoning
7. Reduce the starting point at which child benefit is removed to £40k/or aligned to the higher tax rate threshold.
8. Hold back the reduction in Corporation tax
9. Increase the capacity for councils to tax higher bands more.
10. Plastic bottle tax / bring in a recycling scheme.
11. Tax land banks
12. Tax principle primary residence (gulp)
What do we expect?
My hunches
1. Pension tax relief restricted to 20% for all
2. 1% on National Insurance
3. 2% on VAT
4. Freezing the tax limits
5. Lowering the starting point of the removal of the tax free allowance from £100k to £60k
6. Increase in fuel duty - environment reasoning
7. Reduce the starting point at which child benefit is removed to £40k/or aligned to the higher tax rate threshold.
8. Hold back the reduction in Corporation tax
9. Increase the capacity for councils to tax higher bands more.
10. Plastic bottle tax / bring in a recycling scheme.
11. Tax land banks
12. Tax principle primary residence (gulp)
Nothing spectacular I can imagine due to too much uncertainty re Brexit.
The main targets will be digital service multinationals e.g. amazon, et al and corporation tax and probably self employed/PSC companies - the usual.
Other than that:
Personal tax free allowances to increase marginally and stop at 12k - more aggressive tapering off of personal allowance over £100k.
£40k annual pension allowance to be maintained/slightly reduced - contribution relief to taper in line with additional rate thresholds; removal of bringing forward unutilised allowances from prior years.
Fuel, sugar,booze duty to be be increased. Possibly additional targeting of diesel now.
Further stamp duty increases on non primary residences.
The main targets will be digital service multinationals e.g. amazon, et al and corporation tax and probably self employed/PSC companies - the usual.
Other than that:
Personal tax free allowances to increase marginally and stop at 12k - more aggressive tapering off of personal allowance over £100k.
£40k annual pension allowance to be maintained/slightly reduced - contribution relief to taper in line with additional rate thresholds; removal of bringing forward unutilised allowances from prior years.
Fuel, sugar,booze duty to be be increased. Possibly additional targeting of diesel now.
Further stamp duty increases on non primary residences.
Well we need £20b more by 2020 to pay for the NHS pledge growth will not deliver it so it’s cuts or tax rises which need to be planned now.
The manifesto promise of £50k starting point of higher rate needs to happen before the end of the govt cycle 2022. That would not get voted down as it’ was a manifesto promise.
When will they increase the starting point of the tax free threshold being removed from £100k why did it never increase with inflation? It’s been nearly 20 years now and it’s still the same. £100k in 1998 v £100m in 2018 is a very different kettle of fish.
The manifesto promise of £50k starting point of higher rate needs to happen before the end of the govt cycle 2022. That would not get voted down as it’ was a manifesto promise.
When will they increase the starting point of the tax free threshold being removed from £100k why did it never increase with inflation? It’s been nearly 20 years now and it’s still the same. £100k in 1998 v £100m in 2018 is a very different kettle of fish.
NDA said:
Reduction in Stamp Duty? It's completely fecked the market where I am.
I think that's unlikely - the crossover point versus the old system is c. £950k so I don't think it will be too high on Westminster's radar. Moreover, I would guess that what's screwing up the market locally to you is the 3% surcharge rather than the rates for single property owners.First poster has it right mentioning withdrawal of any relief over 20% for pension contributions. I could see a reduction in the £10-40k annual contribution limits as well.
Increase in fuel duty I think is unlikely despite the benefits it would have (both reducing traffic and improving air quality, environment etc).
The stamp duty is causing the £1m+ houses to stagnate totally. Instead (I’ve seen a few locally) they are vastly extending those houses and staying put. So you’ve nowhere really for those sitting in £750k houses to move into - they then develop the house they are in which takes that house forever out of the next jump up the ladder.
My point is where I live a 3 bed semi is £500k+ but if more and more extend those to 4/5 bed houses it takes them to the £800k level and removes supply at the £500k mark for good repeat at all levels
My point is where I live a 3 bed semi is £500k+ but if more and more extend those to 4/5 bed houses it takes them to the £800k level and removes supply at the £500k mark for good repeat at all levels
NickCQ said:
Increase in fuel duty I think is unlikely despite the benefits it would have (both reducing traffic and improving air quality, environment etc).
I suspect people will cover the same mileage, but just be poorer.If it reduced usage it wouldn't increase the tax take - and that's what they need.
- 6, I thought you said you’d done some reading? Frozen, again, by May, removing an easy win for the wet lettuce.
Croutons said:
#6, I thought you said you’d done some reading? Frozen, again, by May, removing an easy win for the wet lettuce.
https://www.bbc.co.uk/news/uk-politics-45727383
I guess with the high prices the govt are really up on net tax take from fuel anyway. https://www.bbc.co.uk/news/uk-politics-45727383
Let’s take a longer look at this list
Road fund duty up by cpi at least, possibly with an escalator on the biggies.
He needs 20bn for the NHS, but not per annum. Steady as she goes and a robotic speech with digs at Labour will be what’s delivered. Honestly, charisma bypass. Genuinely cannot understand how he’s become a grandee...
Welshbeef said:
1. Pension tax relief restricted to 20% for all
>> Too big a deal for Hapless Hammond, esp this close to Brexit. See other thread on this.
2. 1% on National Insurance
>> Outside chance. Gordon Brown added 1% “to save the NHS”. Which apparently needs saving again. You’d think they might learn.
3. 2% on VAT
>> way too big a deal.
4. Freezing the tax limits
>> Election pledge to go? Potential... fiscal drag works for many a chancellor. Unpopular though as red and blue got into a pissing match over who gave most free. Naturally the more useful thing would be to raise the start point for NICs to align with the low rate band, but there’s no votes in common sense or neatness when you can make headlines instead.
5. Lowering the starting point of the removal of the tax free allowance from £100k to £60k
>> Nah. MP’s earn more than that. It will stay, fiscal drags again.
6. Increase in fuel duty - environment reasoning
>> As before.
7. Reduce the starting point at which child benefit is removed to £40k/or aligned to the higher tax rate threshold.
>> it’s a big enough f
k up as it is (single earner on 70, fk you, two on 49999 each, here, have free money). He’ll do nothing. Fiscal drag again. Why do we have an office for tax simplification by the way? Have they ever done anything?
8. Hold back the reduction in Corporation tax
>> And ps off big biz so close to Brexit? And show tax weakness when we’re basically threatening to become a haven if the EU don’t start playing nicely? Nah.
9. Increase the capacity for councils to tax higher bands more.
>> Probably about time. Risk that local rules interfere, eg local referenda required, which also costs.
10. Plastic bottle tax / bring in a recycling scheme.
>> he’ll probably call it a green budget. It won’t be.
11. Tax land banks
>> Possibly.
12. Tax principle primary residence (gulp)
>> goodbye to your voters. Nope.
Absent: insurance premium tax stealthily rises.>> Too big a deal for Hapless Hammond, esp this close to Brexit. See other thread on this.
2. 1% on National Insurance
>> Outside chance. Gordon Brown added 1% “to save the NHS”. Which apparently needs saving again. You’d think they might learn.
3. 2% on VAT
>> way too big a deal.
4. Freezing the tax limits
>> Election pledge to go? Potential... fiscal drag works for many a chancellor. Unpopular though as red and blue got into a pissing match over who gave most free. Naturally the more useful thing would be to raise the start point for NICs to align with the low rate band, but there’s no votes in common sense or neatness when you can make headlines instead.
5. Lowering the starting point of the removal of the tax free allowance from £100k to £60k
>> Nah. MP’s earn more than that. It will stay, fiscal drags again.
6. Increase in fuel duty - environment reasoning
>> As before.
7. Reduce the starting point at which child benefit is removed to £40k/or aligned to the higher tax rate threshold.
>> it’s a big enough f
k up as it is (single earner on 70, fk you, two on 49999 each, here, have free money). He’ll do nothing. Fiscal drag again. Why do we have an office for tax simplification by the way? Have they ever done anything?8. Hold back the reduction in Corporation tax
>> And p
s off big biz so close to Brexit? And show tax weakness when we’re basically threatening to become a haven if the EU don’t start playing nicely? Nah.9. Increase the capacity for councils to tax higher bands more.
>> Probably about time. Risk that local rules interfere, eg local referenda required, which also costs.
10. Plastic bottle tax / bring in a recycling scheme.
>> he’ll probably call it a green budget. It won’t be.
11. Tax land banks
>> Possibly.
12. Tax principle primary residence (gulp)
>> goodbye to your voters. Nope.
Road fund duty up by cpi at least, possibly with an escalator on the biggies.
He needs 20bn for the NHS, but not per annum. Steady as she goes and a robotic speech with digs at Labour will be what’s delivered. Honestly, charisma bypass. Genuinely cannot understand how he’s become a grandee...
Simpo Two said:
NickCQ said:
Increase in fuel duty I think is unlikely despite the benefits it would have (both reducing traffic and improving air quality, environment etc).
I suspect people will cover the same mileage, but just be poorer.If it reduced usage it wouldn't increase the tax take - and that's what they need.
In the long term people adapt their behaviour to suit incentives. More than enough other ways to raise revenue as well.
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