2021 Budget Predictions

Author
Discussion

Fittster

20,120 posts

228 months

Wednesday 3rd March 2021
quotequote all
Venisonpie said:
Digga said:
UK needs to improve productivity. The key route is through investment; one man with a shovel can only do so much, give him a mini digger he can do a whole lot more. biggrin
Yup. Encourage economic growth and shrink the debt rather than strangle GDP potential.
OBR forecast of 4% loss in productivity as a result of non-tariff barriers erected between UK and EU trade by TCA particularly in services

So more damage to the UK economy because of Brexit.

ant1973

5,693 posts

220 months

Wednesday 3rd March 2021
quotequote all
ant1973 said:
youngsyr said:
ant1973 said:
youngsyr said:
RichB said:
apologise for contributing to that thread however, I totally disagree that it's a bad budget for business.
I think I'd describe it as: could have been much worse for business.

Taxes have to go up, there's no doubt there. They could have hammered businesses a lot more. Quite impressed at the amount of investment "carrots" compare to the number of tax increase "sticks".

Using fiscal drag was a clever idea too.
6% increase in CT is pretty chunky! How much worse could it have been? The super deduction is for two years only.
Oh definitely, but how many companies are actually going to be paying the higher rate, given the amount of losses this year and the state of the economy over the next two years?

And if you are earning enough to be paying it, then you should have a significant amount of excess cash and you can drastically reduce your tax bill by investing.

So like I said, there's a big stick, but also pretty big carrots.
Will need to see whether cars are included biggrin
Cars not included....

https://www.gov.uk/government/publications/new-tem...

JagLover

44,727 posts

250 months

Wednesday 3rd March 2021
quotequote all
No doubt for political reasons the CT rate for small companies stays at 19%.

In reality it is the larger companies where you have the pressure of tax jurisdiction competition and hundreds of thousands of the smaller companies are just disguised employment and there is no logical reason for the rate to be at 19% rather than 20%.

Of course what matters for the larger companies is the effective rate and there have been changes for capital allowances, but still it seems more political than logical.

ITP

2,220 posts

212 months

Wednesday 3rd March 2021
quotequote all
richardxjr said:
Welshbeef said:
bloomen said:
The only mention is an allowance freeze until 2026. That's rather better than another 20 per cent.
All those BTL jumping ship are regretting it now
Really? 'we want generation renters to be generation home owners'
Hold your horses!
I have yet to hear any news other than the tax free allowance is not changing for CGT.
Unless someone else has heard the tax rates are also being frozen at 18%/28%?

Anyway, if CGT rates for second homes went up to 40% or so there would be less homes for first time buyers, because landlords would just keep them rather than paying huge CGT. Plus no tax income for rishi if no one sells...


poordecisions

198 posts

116 months

Wednesday 3rd March 2021
quotequote all
richardxjr said:
Really? 'we want generation renters to be generation home owners'
That one bit makes no sense to me. The stamp duty freeze and 95% mortgages will likely push prices up higher, and any 10% drop in value will cause a lot of people to drop into negative equity, reposessions, recession etc.

The BTL landlords (myself included) will have houses increase in value and not rise in CGT if we sell them.

Pushing up prices doesn't seem conducive to less rent more ownership..

Using this route, later on you BTL landlords at a later date which causes a mass sell off and house prices drop, plunging the 95% buyers into negative equity.

Am I missing something? I don't really see why people hate landlords quite so much, it's all a market, like Rolex's or GT3RS's.

Edited by poordecisions on Wednesday 3rd March 14:38

Al Gorithum

4,542 posts

223 months

Wednesday 3rd March 2021
quotequote all
Interesting about the Freeports (which I understand we had to relinquish to keep the EU happy).

I wonder how that'll work out?

poordecisions

198 posts

116 months

Wednesday 3rd March 2021
quotequote all
ITP said:
Hold your horses!
I have yet to hear any news other than the tax free allowance is not changing for CGT.
Unless someone else has heard the tax rates are also being frozen at 18%/28%?

Anyway, if CGT rates for second homes went up to 40% or so there would be less homes for first time buyers, because landlords would just keep them rather than paying huge CGT. Plus no tax income for rishi if no one sells...
That's it. We have bought houses (through a holding company) for cashflow and ROI, rather than capital gain which would be a bonus. If you taxed us for selling the houses, we just wouldn't bother selling them, ever.

In the same stroke, we work in construction consultancy (incl development), so in some ways would then contribute for the demand to our other services by not selling.

Scootersp

3,636 posts

203 months

Wednesday 3rd March 2021
quotequote all
youngsyr said:
Scootersp said:
Also I'd argue no company can really gripe too much if they've received furlough funds.........at least until the extra tax they end up paying exceeds the amount received?
That's a bit one-sided, IMO.

Companies only received furlough grants if they put employees on furlough, i.e. they weren't working for them, more often than not because the government made it illegal to operate.

The companies could have fired their employees and not taken any furlough grants. Those grants weren't purely for the companies' benefit, or even mostly.
Fire or made redundant with associated costs? Losing quality staff they know they'd want back, it has business benefits........a huge one being the (hopefully) lack of general economic devastation and negative spiral in the economy effecting all?

I have a feeling it's all lip service any how and like america stimulus in some form will continue, we never operate at an annual surplus anyway so what consequences a bigger deficit........


Edited by Scootersp on Wednesday 3rd March 14:46

Fittster

20,120 posts

228 months

Wednesday 3rd March 2021
quotequote all
Al Gorithum said:
Interesting about the Freeports (which I understand we had to relinquish to keep the EU happy).

I wonder how that'll work out?
There were free port areas in Liverpool, Southampton, the Port of Tilbury, the Port of Sheerness and at Prestwick Airport until 2012. The fact that no one remembers that suggests they aren't a big deal.

Al Gorithum

4,542 posts

223 months

Wednesday 3rd March 2021
quotequote all
Fittster said:
Al Gorithum said:
Interesting about the Freeports (which I understand we had to relinquish to keep the EU happy).

I wonder how that'll work out?
There were free port areas in Liverpool, Southampton, the Port of Tilbury, the Port of Sheerness and at Prestwick Airport until 2012. The fact that no one remembers that suggests they aren't a big deal.
Good point! Seems to have been a big deal to the EU though - unfair competition IIRC.

Eric Mc

123,861 posts

280 months

Wednesday 3rd March 2021
quotequote all
A number of other EU countries had freeports too.

Shannon Airport in Ireland used to be a Freeport. I presume that got knocked on the head as well.

Having said that, the Irish have some sort of Zero Corporation Tax zone in Dublin Port these days - and they are still in the EU.

PeteinSQ

2,333 posts

225 months

Wednesday 3rd March 2021
quotequote all
poordecisions said:
That's it. We have bought houses (through a holding company) for cashflow and ROI, rather than capital gain which would be a bonus. If you taxed us for selling the houses, we just wouldn't bother selling them, ever.

In the same stroke, we work in construction consultancy (incl development), so in some ways would then contribute for the demand to our other services by not selling.
This will be true in some cases - but there are a lot of people who buy rental properties with interest only btl mortgages with a view to selling the property after a set period of time to clear the mortgage and keep the profit. Or people that buy a property purely with a view to flipping it a few months later.

This sort of transaction will be less attractive and these people are buying for a large ROI not a stream of income.

markcoznottz

7,155 posts

239 months

Wednesday 3rd March 2021
quotequote all
poordecisions said:
richardxjr said:
Really? 'we want generation renters to be generation home owners'
That one bit makes no sense to me. The stamp duty freeze and 95% mortgages will likely push prices up higher, and any 10% drop in value will cause a lot of people to drop into negative equity, reposessions, recession etc.

The BTL landlords (myself included) will have houses increase in value and not rise in CGT if we sell them.

Pushing up prices doesn't seem conducive to less rent more ownership..

Using this route, later on you BTL landlords at a later date which causes a mass sell off and house prices drop, plunging the 95% buyers into negative equity.

Am I missing something? I don't really see why people hate landlords quite so much, it's all a market, like Rolex's or GT3RS's.

Edited by poordecisions on Wednesday 3rd March 14:38
Btl was a result of brown trashing the best private pension scheme in Europe. Maybe.

Gecko1978

11,358 posts

172 months

Wednesday 3rd March 2021
quotequote all
Scootersp said:
youngsyr said:
Scootersp said:
Also I'd argue no company can really gripe too much if they've received furlough funds.........at least until the extra tax they end up paying exceeds the amount received?
That's a bit one-sided, IMO.

Companies only received furlough grants if they put employees on furlough, i.e. they weren't working for them, more often than not because the government made it illegal to operate.

The companies could have fired their employees and not taken any furlough grants. Those grants weren't purely for the companies' benefit, or even mostly.
Fire or made redundant with associated costs? Losing quality staff they know they'd want back, it has business benefits........a huge one being the (hopefully) lack of general economic devastation and negative spiral in the economy effecting all?

I have a feeling it's all lip service any how and like america stimulus in some form will continue, we never operate at an annual surplus anyway so what consequences a bigger deficit........


Edited by Scootersp on Wednesday 3rd March 14:46
Given the cap on furlough was 35k then most of the workers (not all) affected will have been in lower skilled rolls like retail for example. So while day 1 you can't replace like for like you could probably find a nearly as good replacement. But the government don't want millions more unemployed so furlough took care of that. They said 11m was predicted but only circa 4 are unemployed but 5m on furlough so it amounts to the same without furlough no job (no fault of the employee as such).

The economy can bounce back but thats not the same as the same jobs existing.

Example, you now do 1 day a week from home where as before you did 0. So you are travelling 20% less buying 20% less starbucks and pret sandwiches. Suddenly there is not as much need for thoes jobs. Same you are wearing 4 shirts not 5 20% fall in demand.

Things will never be 2019 again and they were always going to change. 2022 might see a rise in some areas but i would bet certain types of retail are done for. Also cinema (i like going). But if i can rent a new film at home with family and buy popcorn etc all for the cost of 1 ticket not 4 then its hard to see that recovering. In the 90s we all had 32 inch at best mono tvs. Now we have 65 inch 4k monsters with sound bars etc.

KTF

10,326 posts

165 months

Wednesday 3rd March 2021
quotequote all
Gecko1978 said:
Given the cap on furlough was 35k then most of the workers (not all) affected will have been in lower skilled rolls like retail for example.
My employer put the majority of its employees on furlough when the scheme was available. They claimed up to the cap from the government then topped everyones salaries up from their own funds so there was no reduction on take home pay for those on furlough - the reasoning being that if there was no reduction in pay then you would have no objection to being put on furlough.

Whilst the scheme was aimed at the lower skilled roles, I cant believe my employer was the only company that used it as a means of reducing cash leaving the business when there was no work to do as the government was effectively paying some of the wages.

.

turbobloke

111,790 posts

275 months

Wednesday 3rd March 2021
quotequote all
Fittster said:
Venisonpie said:
Digga said:
UK needs to improve productivity. The key route is through investment; one man with a shovel can only do so much, give him a mini digger he can do a whole lot more. biggrin
Yup. Encourage economic growth and shrink the debt rather than strangle GDP potential.
OBR forecast of 4% loss in productivity as a result of non-tariff barriers erected between UK and EU trade by TCA particularly in services

So more damage to the UK economy because of Brexit.
It's a forecast not a forgone conclusion, sorry to disappoint.

Try this for size - they got it wrong after the referendum and may well do just as good a job this time.

OBR Explains Errors in Forecasting Impact of Brexit
https://www.ft.com/content/d140f26e-f7b9-11e8-af46...
Essence of the article for those with no FT access - OBR admits that UK public finances deterioration it forecast after the EU referendum result has not materialised.

The OBR really should apologise to remainers for getting their hopes up.

turbobloke

111,790 posts

275 months

Wednesday 3rd March 2021
quotequote all
On topic, having just read a summary of the budget, Sunak steered a reasonable course overall.

snuffy

11,256 posts

299 months

Wednesday 3rd March 2021
quotequote all
snuffy said:
There's a lot of newspapers predicting massive tax raids for all kinds; pensions, houses, assets, wealth, corporation tax, re-introduction of the windows tax even !

My bet would be it's yet another campaign of disinformation and nothing of the sort will happen; it's standard procedure. So everyone is now prepared for HMG to steal even more of their money, and when they don't do that, everyone will then thank their lucky stars and say what a fantastic Government we have and how benevolent Boris and Rishi are !

The debt will be parked for years. And what we are seeing now is a policy of disinformation.
There we go, as I said, all those predicted massive tax raids did not happen (with the exception of corporation tax).

turbobloke

111,790 posts

275 months

Wednesday 3rd March 2021
quotequote all
snuffy said:
snuffy said:
There's a lot of newspapers predicting massive tax raids for all kinds; pensions, houses, assets, wealth, corporation tax, re-introduction of the windows tax even !

My bet would be it's yet another campaign of disinformation and nothing of the sort will happen; it's standard procedure. So everyone is now prepared for HMG to steal even more of their money, and when they don't do that, everyone will then thank their lucky stars and say what a fantastic Government we have and how benevolent Boris and Rishi are !
There we go, as I said, all those predicted massive tax raids did not happen (with the exception of corporation tax).
Good call.

Isn't it traditional to pass on corptax to consumers where possible?

It's not the sky falling in for sure and still lower than Labour promised us with no covid pandemic around.

TriumphStag3.0V8

4,637 posts

96 months

Wednesday 3rd March 2021
quotequote all
turbobloke said:
Fittster said:
Venisonpie said:
Digga said:
UK needs to improve productivity. The key route is through investment; one man with a shovel can only do so much, give him a mini digger he can do a whole lot more. biggrin
Yup. Encourage economic growth and shrink the debt rather than strangle GDP potential.
OBR forecast of 4% loss in productivity as a result of non-tariff barriers erected between UK and EU trade by TCA particularly in services

So more damage to the UK economy because of Brexit.
It's a forecast not a forgone conclusion, sorry to disappoint.

Try this for size - they got it wrong after the referendum and may well do just as good a job this time.

OBR Explains Errors in Forecasting Impact of Brexit
https://www.ft.com/content/d140f26e-f7b9-11e8-af46...
Essence of the article for those with no FT access - OBR admits that UK public finances deterioration it forecast after the EU referendum result has not materialised.

The OBR really should apologise to remainers for getting their hopes up.
Gives them all something to get frothy about, so they are happy. Doesn't have to be true, or correct, just as long as it is Grrrrrr Brexit. They will move on to the next incorrect prediction or sob story as soon as this one is proven incorrect.