Budget 2024 - Predictions

[Paul Kelly ICHYB]

With the budget less than 24 hours away, what do we think will be announced that will affect businesses?

 

[Newchodge]

With the budget less than 24 hours away, what do we think will be announced that will affect businesses?

Virtually nothing.

 

[Ozzy]

I'm not expecting much but the NI 2p cut is widely leaked as expected, with freezing fuel duty and 'tax cuts'.
Overall though I'm expecting a general freeze across the board with a narrative of repaying the last few years, and restricting inflation, or words to that effect.

 

[japancool]

"The plan is working", at least once.
"Grow the economy", at least three times.
"Five pledges", maybe not.

 

[MikeJ]

Strong rumours they'll abolish the non-dom status (or at least restrict it further than they did previously) to fund the tax cut/NI cut, just to piss Labour off.

Feel it's more likely to be a basic rate income tax cut rather than an NI cut, as it's better politically. Apparently less of an impact on inflation too.

 

[Paul Kelly ICHYB]

"The plan is working", at least once.
"Grow the economy", at least three times.

Maybe we could also look at Budget Bingo phrases?
"Small businesses are the powerhouse of the (British) economy"

 

[NickGrogan]

"Hard working families" will be mentioned at least 10 times
"Lazy families" wont get a mention at all.

 

[Peter Cooper]

2p cut in main rate of NICs will shrink the tax advantages of taking dividends vs a salary a little more and lower the point where salary becomes more advantageous (though that point is still pretty high, somewhere around £400k or so). A gigantic shift from several years ago, however, where it was a no-brainer to focus on dividends. (Even a 1p cut in the higher NIC rate or the employer NIC rate would be have an even larger effect on this matter.)

 

[Newchodge]

"Hard working families" will be mentioned at least 10 times
"Lazy families" wont get a mention at all.

Pensioners who have worked hard all their lives.

 

[Newchodge]

2p cut in main rate of NICs will shrink the tax advantages of taking dividends vs a salary a little more and lower the point where salary becomes more advantageous (though that point is still pretty high, somewhere around £400k or so). A gigantic shift from several years ago, however, where it was a no-brainer to focus on dividends. (Even a 1p cut in the higher NIC rate or the employer NIC rate would be have an even larger effect on this matter.)

Charging NI equivalent on dividend payments would work wonders!

 

[NickGrogan]

Charging NI equivalent on dividend payments would work wonders!

At what, reducing the value of pensions, so more people require government support?

 

[UKSBD]

A tightening of rules on directors loans

 

[Newchodge]

At what, reducing the value of pensions, so more people require government support?

Could you explian how you think that would work?

 

[NickGrogan]

Many shares are owned by pension funds, the fund in turn owned by you and me and other people.
The pension funds get dividends that increase the value of my/your/their pension.
If the pension funds pay tax on the dividends, less money goes into the fund.
Meaning less money to buy shares, meaning fewer shares and a smaller fund on retirement.
Small fund on retirement means less income
Less income means more likely to be eligible for means-tested support
So the government has to pay me more money.
Inflation will mean that the future money will cost more than the current money.

If you reduced the growth of your pension by say 10% per year for 25 years, that's a very big impact.

 

[Newchodge]

Many shares are owned by pension funds, the fund in turn owned by you and me and other people.
The pension funds get dividends that increase the value of my/your/their pension.
If the pension funds pay tax on the dividends, less money goes into the fund.
Meaning less money to buy shares, meaning fewer shares and a smaller fund on retirement.
Small fund on retirement means less income
Less income means more likely to be eligible for means-tested support
So the government has to pay me more money.
Inflation will mean that the future money will cost more than the current money.

If you reduced the growth of your pension by say 10% per year for 25 years, that's a very big impact.

Right. I understand. Why not do away with all employee tax and NI, on that basis?

 

[NickGrogan]

Right. I understand. Why not do away with all employee tax and NI, on that basis?

Good idea, make a new simpler system. Less staff needed at HMRC, less things to go wrong, less administration, less costs.

Lets scrap income tax, employees NI, employers NI, student loan repayments via payroll, benefits via payroll, benefit reclaims via payroll and anything and everything else that's collected via payroll.

Savings for employers will be substantial as will savings for the tax man.

Replace all of the above with a simpler income tax system that doesn't tax people at 90% percent when it goes wrong.

Or go the whole way and scrap all taxes and replace everything with a slightly higher level of VAT. Keep VAT on food at zero.

Direct savings of 7BN by closing HMRC, significantly more saved by employers and no loopholes.

Any objections?

 

[Paul Kelly ICHYB]

66k people on the dole!

 

[DontAsk]

Pensioners who have worked hard all their lives.

Have had two years of good increases.

 

[Newchodge]

Have had two years of good increases.

Sorry, I was adding to the hackneyed phrases we can expect to hear during the budget. I am aware that state pensioners may never have worked a single day in their lives.

 

[NickGrogan]

66k people on the dole!

Spend a bit retraining them and they can go and do something useful

 

[JEREMY HAWKE]

I believe that he will announce our re-joining of the EU

 

[biobob]

With the budget less than 24 hours away, what do we think will be announced that will affect businesses?

The governments endless fiddling doesn’t do a fat lot in helping any part of the economy, they are just keeping themselves in highly paid civil servant jobs.