2021 Budget Predictions
Discussion
Venisonpie said:
Exactly, reduce tax exposure by investing or increasing other cash buckets. I think this is really the point.
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. 
bloomen said:
Rollin said:
Were there any CGT changes?
The only mention is an allowance freeze until 2026. That's rather better than another 20 per cent. 
Welshbeef said:
This is a very good budget - anyone disagree.
It's not "very good", because everything's not free etc. It does include a lot of the least worst options though. So it's a B+, could have been worse. Freezing tax bands means in theory more lower paid workers will pay tax over time, which is not ideal. I'dike to have seen a move to increase the level at which NI is paid, as the willy waving of a few years ago to raise the base tax limit doesn’t mean free money. Having tax and NI start at the same point would make sense to me at least. Obvs that would mean a cut for all workers, so it's not attractive to governments who got carried away with those headlines.
Apart from that, no VAT rise, no general "parcel tax", no CGT complexities, and no one will cry for 22,000 people who will apparently breach the LTA before 2026. Although many are GPs and NHS consultants, who I suspect will quit before that happens, which is a societal loss.
Housing move a negative, although if you think the tax raised from people moving who otherwise would not do exceeds the stamp gain, you've got more complex models than I do.
PeteinSQ said:
ant1973 said:
6% increase in CT is pretty chunky! How much worse could it have been? The super deduction is for two years only.
Corporation tax in Germany is 29.9%, France it's 32.02%, Italy 27.81%, USA 25.77%. Yes it's a big increase but compared to other markets you're only seeing it brought into line.
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.
Yup. Encourage economic growth and shrink the debt rather than strangle GDP potential. So more damage to the UK economy because of Brexit.
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.
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.
https://www.gov.uk/government/publications/new-tem...
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.
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.
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 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...
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
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.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...
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.
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.
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
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.I wonder how that'll work out?
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.I wonder how that'll work out?
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. 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 sort of transaction will be less attractive and these people are buying for a large ROI not a stream of income.
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
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