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 tax rises expected for emergency budget

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Rob
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PostSubject: tax rises expected for emergency budget   Fri 14 May - 23:03

* national insurance rise of 1% from 9p in £1 to 10p in £1

* capital gains tax rise from 18% to 40%

* capital gains personal allowance reduced to £2,000

* scrapping of isa allowance of £5,100 and returning it to £3,600

* VAT increase to 20% from 17.5%

* Con-Lib's will go against the Conservatives previous pledge to scrap Labours 'tax on jobs' which will see a rise in income tax for those earning above £20,000 from 22% to 23%

* Con-Lib's abandon Conservative pledge to raise threshold for Inheritance tax.

* abolishment of the minimum wage

* personal income tax allowance of first £6,475 of tax year earnings at lower rate for all tax payers scrapped to pay for lib dems idea of all workers under 10,000 to pay a new base rate of tax of 10p

*£250 free child trust fund abolished

any opinions? this could still be somewhat out, maybe scare mongering, given it was printed in the independant, which is an anti-government newspaper as far as i'm aware.

what's interesting is that if the above is correct, tax on workers will actually be proportionally much higher. i think the current personal allowance on income tax means we pay 15p in £1 for the first £6,475. with this scrapped most people will be paying the new rate of 23% tax on all earnings and not just those beyond the £6,475 threshold. and then there's the rise in national insurance, which is basically to ensure the ring fencing of front line services from the £6bn. cuts. so, tax will be 33% for the average joe on all earnings. lets face it the only people who earn less than £10,000 are 16 hour a week part timers on child tax credits. child tax credits and working tax credits will all be revamped for sure to make up for the kind hand dealt to lower incomes so those people shouldnt be fooled into thinking they're exempt and being ring fenced, cos where they deal in one hand they'll skin you with the next!

its certainly clever politics for Cameron to say he's lowering taxes, hats off to him for the spin he's already put on it, but this is the nature of all governments and there's sure to be a back lash. Part of these rises and cuts surely has to be what the new government has inherited with the national debt and not just the cliched old 'tory tax rises'. gordon brown was going to implement some of these changes aswell it should be noted so it'll be interesting to see the reaction in the house of commons by labour MPs when the emergency budget is announced in 47 days time. that's July 1st.

the question really is how bad is the debt? is it really this bad and did labour cock everything up? is it their fault entirely? who on earth do we believe? are we being fooled into believing things are so bad in order for tories to gloss over cuts to line their own pockets? none of the above cuts/rises are particularly surprising given all the chat about the need for strong government and reducing the defecit. personally, i dont know what to make of any of it, since so many politicians are dishonest crooks (even Cameron).

so....is it same old tories or what?


Last edited by Stuart@Roma on Sat 15 May - 10:05; edited 1 time in total
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PostSubject: Re: tax rises expected for emergency budget   Sat 15 May - 7:10

Hmm, this isn't exactly convincing me to return to the UK. But my decision has already been made and I'll be back on June 1st.

I don't really know about the politics but yes I do believe that the UK is in pretty bad shape economically. I'm sure this could lead to a brain drain with people emigrating to other countries.

My understanding, which I readily admit could be very limited, is that the debt is pretty bad but the good news is that it's not due to be repaid for some time yet. There's time to implement plans to reduce the debt. Although some of what is mentioned above may happen I doubt all of it will. ISA allowance is £10,200 anyway not £5,100. I heard another increase in the minimum retirement age could happen too.
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Rob
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PostSubject: Re: tax rises expected for emergency budget   Sat 15 May - 9:52

Dan@Plymouth wrote:
ISA allowance is £10,200 anyway not £5,100. I heard another increase in the minimum retirement age could happen too.

yeah £10,200 is the new amount you can currently have in a stocks and shares and cash ISA combined ( http://www.julianhodgebank.com/group/whatsnew.asp ). i misprinted £10,100 from this article in the telegraph ( http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/7727650/Coalition-government-how-to-beat-a-rise-in-capital-gains-tax.html ). you dont currently pay any CGT on ivestments up to that point, but the personal allowance for both is apparently being reduced. Under new proposals we'll be able to only have the first £2,000 free of CGT in stocks and shares and then cash ISA's which can have up to £5,100 at the moment will be reduced back to £3,600. So, combined only around half the amount of tax free savings investments of £5,600. The telegraph article their thinks it could be slashed to just £1,000 for CGT on investments but i think the £2,000 that i read in the independant is more realistic.

retirement age is going up to 66 for state pensions. the only good news is conservatives previously said they would set a minimum retirement age on all pensions of 59 but this is now being scrapped. I guess this was negotiated out of the manifesto with all the company bosses who backed David Cameron into office. I'm sure they are enjoying their free gifts of government gilts too. Smile
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