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Post by racingteatray on Sept 23, 2022 12:21:49 GMT
Thoughts?!
It’s pretty eye-popping.
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Post by michael on Sept 23, 2022 12:46:03 GMT
Encouraging direction. Puts Scotland in a tricky situation on tax.
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Post by racingteatray on Sept 23, 2022 13:04:56 GMT
Strikes me as a budget for high earners who never travel. Say, Jacob Rees-Mogg.
Because, even putting politics and wider economic concerns aside, as one of the ostensible winners from this stunt, I am looking at the not inconsiderable tax saving that I should get and just thinking yes, that’s all very nice, but there’s quite a strong risk that it is entirely negated by the plummeting value of the pound.
Is this what the Red Wall voters had in mind?
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Post by Roadrunner on Sept 23, 2022 13:11:02 GMT
It has already been described as KamiKwasi economics and the Pound continues to plummet.
We so, so desperately need a general election.
If I were a Conservative MP in anything other than a cast iron safe seat I would be making alternative career plans.
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Post by racingteatray on Sept 23, 2022 13:24:42 GMT
The markets are making for grim reading.
Normal countries like to have finance ministers with a grounding in finance. We have an ideological intellectual who read Classics. Yes he had a short stint as a financial analyst in the City, but that doesn’t really make anyone fit to be Chancellor.
We all really really need to hope this isn’t a monumental error of judgment. I worry that it is.
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Post by johnc on Sept 23, 2022 13:42:28 GMT
The stock market didn't react too favourably and the weakness of the £ is a real concern although it does make our exports very cheap.
I think the potential abolition of IR35 is long overdue and will allow a lot more flexibility in the labour market but there will need to be safeguards put in place to prevent a company handing out P45's on Friday and have the same people return on Monday as Directors of their own one man companies - that, after all, is part of what lead to IR35 in the first place.
I agree with Michael that there are now issues for the devolved Parliaments. I already have clients who have moved to the likes of Berwick and the countryside outside Preston to avoid the higher Scottish taxes. If Scotland retains the 45% band you can forget about anyone south of the border being persuaded to take a high paying job in Scotland and there may be many other high earners who may now decide the time is right to leave Scotland. I know a few high earning NHS consultants who do private work, who would save at least £6K/7K by moving south. One of them has a wife who does the same so that is somewhere between £12K and £15K saved between them.
These policies are built on the same thought process Margaret Thatcher used to restart the UK economy and keep wealthy people in the country engaged in wealth building rather than trying to find a tax haven somewhere. However at that time higher rate tax was 60% and was slashed to 40% providing a much bigger incentive and the City of London was able to blossom as a world leading market. I am not sure the same conditions exist now and Brexit and the general World depression will make it much more difficult to burst out of the gloom. Only time will tell but if it doesn't work, we don't have much time!
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Post by Roadrunner on Sept 23, 2022 13:43:39 GMT
The latest headline from Bloomberg  |
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Post by johnc on Sept 23, 2022 14:00:38 GMT
The changes in Stamp Duty are also very attractive for house buyers but are likely to spark further increases in the cost of houses so it gives with one hand and takes with the other.
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Post by Alex on Sept 23, 2022 16:57:13 GMT
The changes in Stamp Duty are also very attractive for house buyers but are likely to spark further increases in the cost of houses so it gives with one hand and takes with the other. I'm sure the reduction in stamp duty for those who can afford to buy a home will provide a nice warm fuzzy feeling to those so poor they rely on food banks to survive. The whole budget disgusts me. The key beneficiaries are the rich as per usual. I'm sure those earning £150k/PA couldn't survive without their income tax being reduced. |
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Post by ChrisM on Sept 23, 2022 19:19:43 GMT
We so, so desperately need a general election. No, no we don't. What we desperately need are proper "electable" candidates first, then an election. We seem to have gone a long, long time without anyone really credible at the head of any of the parties (major and minor) |
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Post by Alex on Sept 23, 2022 19:56:42 GMT
We so, so desperately need a general election. No, no we don't. What we desperately need are proper "electable" candidates first, then an election. We seem to have gone a long, long time without anyone really credible at the head of any of the parties (major and minor) I can very much see your point there. But that may be an incentive for Liz Truss. Call an election before the cost of living really starts biting and whilst Labour can only offer a damp sponge in opposition. |
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Post by cbeaks1 on Sept 24, 2022 11:53:14 GMT
Encouraging direction. Puts Scotland in a tricky situation on tax. Can you explain it a bit for me Michael as someone a bit closer to the decision making? I don’t get it, but I’m willing to believe that I only read one side of things. |
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Post by chipbutty on Sept 24, 2022 14:22:58 GMT
Team Truss are taking a gamble but they don’t appear to have any other choice. Even if they put tax up to 70 % it won’t be enough to fill the budget void (and it would cripple spending) and austerity is never going to happen in any meaningful way under any party. Growth is the only option and you do that by putting more money back in people’s pockets and giving them more reason to work.
The banker’s bonus cap lift and top rate tax reduction has people wound up over the wrong aspect (imo). Even with the small reductions granted, bankie bonuses will still be taxed at close to 50% when you include NI.
What’s better for HMRC, 53% of 2 times salary or 48% of 5 times salary.
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Post by bryan on Sept 24, 2022 18:09:34 GMT
Is there a reason they don't change the tax thresholds eg increase the 20% rate to start at £15 or £20k would help a lot more people and increasing the 40% rate to £60 or £70k would help the trickle down effect more,?
I guess that would get as many headlines as 19% from 20%
The top 45% rate only generates a small amount I think, so not a lot to give away but creates lots of headlines!
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Post by Big Blue on Sept 24, 2022 20:04:29 GMT
Encouraging direction. Puts Scotland in a tricky situation on tax. Can you explain it a bit for me Michael as someone a bit closer to the decision making? I don’t get it, but I’m willing to believe that I only read one side of things. John answered it above. The devolved parliaments will suddenly find themselves with fewer residents if England is more attractive for middle - high earners. That means it doesn’t matter if they have a high tax rate to pay for services and social costs for lower earners as there is no one to pay it. Tax deals with one of the simplest human issues: we’re born for self-preservation and in the developed world that puts tax close to the front of the firing line for things to be protected against, especially if the taxpayers can’t determine any societal benefit at first glance. Braverman has followed a similar route with her very public message about police priorities - you like to see effective policing ahead of politically correct policing to have faith in the police. |
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Post by Big Blue on Sept 24, 2022 20:10:22 GMT
Is there a reason they don't change the tax thresholds eg increase the 20% rate to start at £15 or £20k would help a lot more people and increasing the 40% rate to £60 or £70k would help the trickle down effect more,? That’s effectively a direct tax hand out to those perceived as skiving lefties by the party donors. 😆 |
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Post by michael on Sept 24, 2022 20:51:48 GMT
Encouraging direction. Puts Scotland in a tricky situation on tax. Can you explain it a bit for me Michael as someone a bit closer to the decision making? I don’t get it, but I’m willing to believe that I only read one side of things. The budget makes like harder for the SNP as they can be seen more clearly taxing more for worse outcomes. It makes their lives usefully more difficult. |
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Post by michael on Sept 24, 2022 20:58:21 GMT
Is there a reason they don't change the tax thresholds eg increase the 20% rate to start at £15 or £20k would help a lot more people and increasing the 40% rate to £60 or £70k would help the trickle down effect more,? I guess that would get as many headlines as 19% from 20% The top 45% rate only generates a small amount I think, so not a lot to give away but creates lots of headlines! The top 1% of tax payers pay around a third of all income tax which is a lot of eggs in one basket. Worse still they’re leaving in bigger numbers year on year for the US, Australia and Dubai amongst others. It’s worth keeping these people or more of the burden will need to be placed lower down the chain through necessity. |
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Post by Alex on Sept 25, 2022 4:44:13 GMT
Is there a reason they don't change the tax thresholds eg increase the 20% rate to start at £15 or £20k would help a lot more people and increasing the 40% rate to £60 or £70k would help the trickle down effect more,? That’s effectively a direct tax hand out to those perceived as skiving lefties by the party donors. 😆 It would massively help the middle earners to do that but as they make up the overall bulk of taxpayers you'd be losing a large proportion of the overall tax take. Also it doesn't help the poor who aren't earning enough to get to pay tax at 12k so moving it to 15k doesn't help them at all and right now they're probably the most likely to be left destitute by the current energy crisis and high inflation. |
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Post by Roadrunner on Sept 25, 2022 10:16:08 GMT
Team Truss are taking a gamble but they don’t appear to have any other choice. Even if they put tax up to 70 % it won’t be enough to fill the budget void (and it would cripple spending) and austerity is never going to happen in any meaningful way under any party. Growth is the only option and you do that by putting more money back in people’s pockets and giving them more reason to work. The banker’s bonus cap lift and top rate tax reduction has people wound up over the wrong aspect (imo). Even with the small reductions granted, bankie bonuses will still be taxed at close to 50% when you include NI. What’s better for HMRC, 53% of 2 times salary or 48% of 5 times salary. The problem with relying upon growth is that we have cut ourselves off from our largest export market. UK exports have plummeted after Brexit and we urgently need to get back into the single market. |
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Post by Big Blue on Sept 25, 2022 12:09:14 GMT
The problem with relying upon growth is that we have cut ourselves off from our largest export market. UK exports have plummeted after Brexit and we urgently need to get back into the single market. Nonsense. Brexit is a clear success on all fronts……. Oh yeah, and the bonus restriction removal gives a chance for London of retaining its financial market dominance over Frankfurt. |
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Post by racingteatray on Sept 25, 2022 16:11:36 GMT
The bonus cap was always a silly bit of politicking.
But I still doubt whether this is economically intelligent and don’t for a minute but the argument that there was no choice.
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Post by michael on Sept 25, 2022 17:43:54 GMT
The bonus cap was an EU idea, wasn’t it? This increases competitiveness which id essential at the moment. It’s also cost free as increases in bonus are only going to be taxed. Those complaining about the bankers bonuses are largely those who subscribe to the politics of envy.
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Post by racingteatray on Sept 25, 2022 18:13:18 GMT
I think you misread my post? I meant it was a silly policy in the first place.
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Post by johnc on Sept 27, 2022 8:00:20 GMT
I really struggle with politics in the UK at the moment. If I was looking in from the outside I would say it was totally dysfunctional and destructive.
Labour have been bleating for quite some time about the need to end austerity, borrow more and spend it on improving services. The only specific policy I have heard them make publicly is that they want to remove charitable status from private schools which I think speaks volumes for the depth of their envy politics. The Tories have now dropped austerity, are borrowing more and are looking for the private sector to boost the economy and improve services. According to Labour these are the worst possible policies and are leading us to public debt oblivion, despite the methods being very similar to their own!
The new Tory leadership appear to be totally taken aback by the reaction of the markets to the policies detailed in the mini budget and seem to be caught in the headlights and uncertain which direction to take. They also haven't detailed any additional help for those in genuine need through the current crisis of massively increasing prices, especially in the basics of food and heating.
Meanwhile the SNP still think independence is a good idea despite all the experts saying it would lead to a totally bankrupt and destitute Scotland.
I also had two completely independent enquiries from clients last week about moving to Dubai and one about moving to the Channel Islands.
I just wish that some Politicians of mid ground conviction and intelligence (mixed in with some real world experience) would appear from somewhere and move the country forward in a more cohesive way.
As was said above, 60% of all income tax is paid by the top 10% of earners so you don't need to lose many of those people before it starts to have a significant impact. 3 of my clients who operated one man limited companies retired when IR35 effectively closed them down - they were all earning multiples of 6 figures and that tax and spending power has evaporated all due to ill thought policies. Thankfully IR35 looks like it will be scrapped (although we have still to see the fine print) and I keep my fingers crossed that it will allow a much more flexible work environment for those who really do take the risks and rewards of short term specialist contracts.
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Post by racingteatray on Sept 27, 2022 21:34:03 GMT
I’ve yet to hear anyone say anything good about it, in the City or anywhere else.
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Post by Deleted on Sept 27, 2022 21:38:44 GMT
I am so far from being an expert in any way, or even knowledgeable about finance like this so I am sticking to my kind of logic/experience. I just cannot see the potential logic at all. I am just sitting tight and hoping basically, as I believe many others are too.
Otherwise we are all heading for a Laboured parliament or two.
It does not bear thinking about what with Corbyn's fans standing behind Starmer with their knives sharpened.
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Post by Tim on Sept 28, 2022 7:26:54 GMT
Ok this isn't funny any more.
The hedge fund Tory donors who've been shorting the pound will have topped up their billions by now, are there any donors who AREN'T these types that might get a say now?
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Post by Big Blue on Sept 28, 2022 8:16:40 GMT
Personal taxation aside, a clear consideration for individuals, how does the Scottish contingent feel about having your currency and economy tanked by a London-centric government? Again.
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Post by johnc on Sept 28, 2022 8:41:45 GMT
I think it is a clear sign, again, that too much power is centred in London. In addition it shows history repeating itself with those who are in power for too long getting corrupted. If Tim's comments hold any truth i.e. they knew it was coming and took advantage, rather than just being lucky, then they should be jailed because it's the ordinary people and their pension funds who pay the price of the large sums these guys pocket.
Although I am a proud Scot, with a surname and ancestry that take me back to one of Scotland's finest, I am still British and just consider the mess being made in Westminster to be gross ineptitude. I don't consider it to be anything other than detrimental to the UK, a part of which I live in. I think the Scottish Government are every bit as likely or capable of making a complete mess of the economy and as the recent ferry scandal has shown, they played a large part in orchestrating the feel good award of a ferry contract to a Scottish yard just before the independence referendum despite there being big misgivings about the yard's ability to build the ships on budget and on time. The only people who could have ensured the yard got more detailed plans, was able to change its plans after the closure of the tender process and not provide any of the normal guarantees were those at the very top. It's a bit disingenuous of Mr Swinney to say he is surprised and concerned about the allegations and will conduct an enquiry, when he was at the top table of Government at the time this happened.
In short, we are all in this together and we are in a far stronger position to get out of the mess together as well. We just need intelligent, diligent, conscientious public service centred Politicians to make an appearance and lead us properly. At the moment they are ALL self centred, selfish, arrogant PR monsters who will say what they need to say to get what they want.
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