2021 Budget Predictions
Discussion
poordecisions said:
youngsyr said:
If a company has invested a significant amount in this fiscal year, but has a 31 May year end, do we know if it will benefit from the Superdeduction, will it be pro-rated, or not available at all?
It’s from 2023, so this year doesn’t really effect thingsI heard Sunak say super deduction was "for the next 2 years".
CT hike is from 2023.
He hasn’t gone after small business. You could argue he will be going after reasonably profitable businesses in a cpl of yrs. Crucially though, it will be on businesses that can afford it. Yes, it’s govt putting their hands in your pockets, BUT...well...your country has called, what are you going to do?
I own/run a reasonably profitable engineering consultancy. In 2023 I may/not be on the hook for the 26% CT, depending on life, accountants and f
k knows what else. But if I am...what kind of tt would I be to complain about my lot in life? I’ve got to pay another £15k in tax, leaving me some 200k to the good. The country just took a kicking, I’m in and hopefully will continue to be in a financial place that I can afford to shoulder more of the burden to pay up, than say a nurse. That’s called being a society in my book.
I own/run a reasonably profitable engineering consultancy. In 2023 I may/not be on the hook for the 26% CT, depending on life, accountants and f
k knows what else. But if I am...what kind of tt would I be to complain about my lot in life? I’ve got to pay another £15k in tax, leaving me some 200k to the good. The country just took a kicking, I’m in and hopefully will continue to be in a financial place that I can afford to shoulder more of the burden to pay up, than say a nurse. That’s called being a society in my book. ant1973 said:
I was actually thinking about reduced NI contributions. If you have looked at my other posts, I favour tax and NI (of all flavours) being merged to bring simplicity and coherence to what is a needlessly complex area of tax. Taxing employment in the form of employer's NI is a dumb idea. It's even dumber in the face of what looks like a pretty unpleasant economic environment.
I don't disagree with you generally.Simplifying the tax system may give the opportunity to remove loopholes. But govt would be poor at executing it.
Ditto all policies that can be used to encourage employment should be. As it is, Sunak is pussying about at the moment. The CT changes will net not very much. Lots of fluff, no substance, other than let's give more free cash out. (Not entirely sure of the logic of keeping furlough going for a quarter after all restrictions are due to lit for example).
J4CKO said:
Chris Type R said:
J4CKO said:
With the Furlough payments based on declared income, its almost like the govt are having a proper go at those who are self employed and perhaps playing a bit fast and loose with the old tax stuff.
Perhaps I should have played fast and loose in the past as my sole trader profits put me outside of the support for the self employed.There's not that much difference between PAYE and someone working through a Ltd company. You pay corporation tax, potentially some PAYE related taxes and then tax on dividend. The main saving is Employers NI. No paid holidays / sick leave.
Edited by Chris Type R on Wednesday 3rd March 21:17
Murph7355 said:
ant1973 said:
I was actually thinking about reduced NI contributions. If you have looked at my other posts, I favour tax and NI (of all flavours) being merged to bring simplicity and coherence to what is a needlessly complex area of tax. Taxing employment in the form of employer's NI is a dumb idea. It's even dumber in the face of what looks like a pretty unpleasant economic environment.
I don't disagree with you generally.Simplifying the tax system may give the opportunity to remove loopholes. But govt would be poor at executing it.
Ditto all policies that can be used to encourage employment should be. As it is, Sunak is pussying about at the moment. The CT changes will net not very much. Lots of fluff, no substance, other than let's give more free cash out. (Not entirely sure of the logic of keeping furlough going for a quarter after all restrictions are due to lit for example).
The tax code has been vastly complicated over the past 40 years precisely to remove loop holes.
Think of it as a contract between companies and the government. Lawyers on both sides spend a huge amount of time setting out exactly what each party's responsibilities and deliverables are.
If they don't, one side or another will run a coach and horses through it.
Look up "double Dutch sandwich" for just one example!
ant1973 said:
According to the Budget report, the cost of the "super deduction" will be just under £25bn.
That is more than the increase in corporation tax is estimated to raise by 2025 - 2026 (c. 17bn).
So this is in effect a tax transfer from non-capital intensive businesses to capital intensive businesses.
Which is reasonable from a "rebalancing" perspective. That is more than the increase in corporation tax is estimated to raise by 2025 - 2026 (c. 17bn).
So this is in effect a tax transfer from non-capital intensive businesses to capital intensive businesses.
ITP said:
They, and by they I mean Rishi and his henchman Jesse Norman, have some kind of vendetta against ltd company contractors. They just want to ‘win’ against them, because they keep getting beaten in court, apart from the odd case. Everyone is telling them what they are doing is wrong but they just want to prove a point. They say what they are doing with IR35 will bring in more tax. It won’t, it will bring in less, but that’s not really their motivation.
Anyone with any wish to bring the public finances into balance would be moving against "ltd company contractors" for the simple reason you pay significantly less tax and NI (including the employer NI borne by the employer) than when you were on PAYE (often doing the exact same job and hours). Labour brought in IR35 and the Tories gave it some teeth. As contracting via a limited company grew it creates the seeds of its own demise IMO, as once it reaches a certain size it becomes unaffordable.
J4CKO said:
So corporation tax goes to 25 percent, from 19.
How does that fit in with us PAYE folk paying 40% once we get to 50 grand or so, and 20 percent past the personal allowance ? Plus NI ?
I get the impression that costs will just be passed on but it doesn't seem that unfair based on what salaried folk have to pay unless i am missing something ?
Plus, obviously, the accountants will be working overtime to reduce it for their clients, if you claim that its hit you for five figures then you are still doing alright and were really doing all right before.
With the Furlough payments based on declared income, its almost like the govt are having a proper go at those who are self employed and perhaps playing a bit fast and loose with the old tax stuff.
I think Rishi is doing a decent job, I think the mark of his stewardship would be if he could coerce some of the local takeaways to maybe accept cards as their reluctance seems to be mainly based on tax evasion.
We 40% mob get reamed as usual.How does that fit in with us PAYE folk paying 40% once we get to 50 grand or so, and 20 percent past the personal allowance ? Plus NI ?
I get the impression that costs will just be passed on but it doesn't seem that unfair based on what salaried folk have to pay unless i am missing something ?
Plus, obviously, the accountants will be working overtime to reduce it for their clients, if you claim that its hit you for five figures then you are still doing alright and were really doing all right before.
With the Furlough payments based on declared income, its almost like the govt are having a proper go at those who are self employed and perhaps playing a bit fast and loose with the old tax stuff.
I think Rishi is doing a decent job, I think the mark of his stewardship would be if he could coerce some of the local takeaways to maybe accept cards as their reluctance seems to be mainly based on tax evasion.
In the eyes of the low earners, we in the 40% bracket are ‘rich’ and fair game, in the eyes of the MP’s we’re just a cash cow to be relentlessly milked as a popularity contest to win the low earners votes.
In our eyes we’re the ones flogging ourselves to death with high mortgages, childcare costs and low/middle management stresses.
Bend over chaps, I reckon we can squeeze a bit more out of us.
People seem to believe that if you work as a contractor/single person limited company, you only pay corporation tax at 19%. But they fail to understand that once you take out dividends over the higher rate threshold, you will pay tax at 40% just like anyone else.
But the media constantly tells people that "they only pay 19%" and forget to mention the 40% you will pay if you exceed said threshold and also forget to mention the 7.5% additional dividend tax as well.
But the media constantly tells people that "they only pay 19%" and forget to mention the 40% you will pay if you exceed said threshold and also forget to mention the 7.5% additional dividend tax as well.
You aren’t getting reamed at all. In fact Rishi explicitly *didnt* ream you yesterday. The 40% tax start line is in fact increasing to 50k...it was only 42k a few yrs ago! All the duty escalators are stopped, furlough schemes extended, etc, etc.
The only ppl who took a potential reaming yesterday are company directors and owners who are looking at 250k of pre tax profits. And that’s in 2 years. And that stick is mitigated by the carrot of massive tax deductions for company investment.
The only ppl who took a potential reaming yesterday are company directors and owners who are looking at 250k of pre tax profits. And that’s in 2 years. And that stick is mitigated by the carrot of massive tax deductions for company investment.
m3jappa said:
I wonder if the new 'super deduction' will apply to someone like me, want to buy a new digger and a truck, probably a used truck but if theres a 130% deduction.....might be new!
In fact i need a whole load of new equipment, interested to find out what applies.
I think that's exactly what it's meant for. Awaiting exactly what plant is approved for this, but it does start next month. A mate of mine has £1m of plant paid for and about to ship from the US right now so he's kinda interested in this!In fact i need a whole load of new equipment, interested to find out what applies.
DeejRC said:
You aren’t getting reamed at all. In fact Rishi explicitly *didnt* ream you yesterday. The 40% tax start line is in fact increasing to 50k...it was only 42k a few yrs ago! All the duty escalators are stopped, furlough schemes extended, etc, etc.
The only ppl who took a potential reaming yesterday are company directors and owners who are looking at 250k of pre tax profits. And that’s in 2 years. And that stick is mitigated by the carrot of massive tax deductions for company investment.
Absolutely this. The only ppl who took a potential reaming yesterday are company directors and owners who are looking at 250k of pre tax profits. And that’s in 2 years. And that stick is mitigated by the carrot of massive tax deductions for company investment.
JagLover said:
ant1973 said:
According to the Budget report, the cost of the "super deduction" will be just under £25bn.
That is more than the increase in corporation tax is estimated to raise by 2025 - 2026 (c. 17bn).
So this is in effect a tax transfer from non-capital intensive businesses to capital intensive businesses.
Which is reasonable from a "rebalancing" perspective. That is more than the increase in corporation tax is estimated to raise by 2025 - 2026 (c. 17bn).
So this is in effect a tax transfer from non-capital intensive businesses to capital intensive businesses.
You have to understand how poorly the UK has done in terms of productivity which is a direct function of investment in machinery, technology and training.
My simple analogy is give a person a shovel and see how much muck they can shift, then give them a mini digger, then invest in a 20 tonne excavator and (with commensurate investment in training) they can fill 8 wheel tipper trucks all day, every working day.
Investment in manufacturing in Italy is staggering. Not only do they have a lot of SMEs, like the UK, a great many of them are extremely well equipped. The reason? They've long understood the long term benefits of generous investment allowances. It has not been uncommon for them to be over 100% in Italy - this is the first time the UK has tried it.
Moreover, I am not sure the £1m limit is really necessary or wise, Italy were at 2.5m EUR even in 2019. Even as a very small firm, we invest in machines that would mop up a decent chunk of that in one go.
I see, in their desperation to put a negative slant on what has widely been seen as a good budget, the BBC are running with an puff piece predicting that it will pull half a million people into poverty, including 200,000 children. I am guessing none of the lovies in the BBC have been to Africa or other poor countries where kids scour refuse heaps looking for plastic bottles to sell? Half a million more people in poverty today? Get real... This nonsense seriously pisses me off because it distracts from those who are genuinely suffering poverty.
Cyder said:
We 40% mob get reamed as usual.
In the eyes of the low earners, we in the 40% bracket are ‘rich’ and fair game, in the eyes of the MP’s we’re just a cash cow to be relentlessly milked as a popularity contest to win the low earners votes.
Things get very uncomfortable should you be unlucky enough to find yourself within the personal allowance taper. Like the 40% - fiscal drag & inflation will ensure more people find themselves affected.In the eyes of the low earners, we in the 40% bracket are ‘rich’ and fair game, in the eyes of the MP’s we’re just a cash cow to be relentlessly milked as a popularity contest to win the low earners votes.
Cyder said:
We 40% mob get reamed as usual.
In the eyes of the low earners, we in the 40% bracket are ‘rich’ and fair game, in the eyes of the MP’s we’re just a cash cow to be relentlessly milked as a popularity contest to win the low earners votes.
In our eyes we’re the ones flogging ourselves to death with high mortgages, childcare costs and low/middle management stresses.
Bend over chaps, I reckon we can squeeze a bit more out of us.
Yes, but fortunately they're not going to be taking that much more off us are they really? I was really worried they'd get rid of top rate pension relief and they didn't. From what I can see the additional cost to someone like me is the freezing of the thresholds and whilst that will cost me it won't be that bad. In the eyes of the low earners, we in the 40% bracket are ‘rich’ and fair game, in the eyes of the MP’s we’re just a cash cow to be relentlessly milked as a popularity contest to win the low earners votes.
In our eyes we’re the ones flogging ourselves to death with high mortgages, childcare costs and low/middle management stresses.
Bend over chaps, I reckon we can squeeze a bit more out of us.
PeteinSQ said:
Yes, but fortunately they're not going to be taking that much more off us are they really? I was really worried they'd get rid of top rate pension relief and they didn't. From what I can see the additional cost to someone like me is the freezing of the thresholds and whilst that will cost me it won't be that bad.
I think it was less bad than it could have been - I was prepared for Corp. Tax going up - but using phased increments. Certainly I'm relieved about then pension relief being left unaffected. Personally I'd have been happier seeing some additional taxes that everyone would pay - an increased online sales VAT rate / luxury VAT rate for example. It would seem fairer that the majority of the population who have benefitted from financial support will also be contributing to repaying the debt.
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