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Budget 2015 predictions

Budget 2015 predictions

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With two Budgets on the cards this year, what are your predictions for the first one on 18 March?

Will we see a further shift in the burden of taxation from companies to individuals?

With a general election around the corner what surprises will George Osborne pull out of the red briefcase?

Replies (30)

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By Duhamel
04th Mar 2015 18:02

AIA
To go back up to 100k from 1 jan 16 for a year or two.

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By thacca
04th Mar 2015 19:15

hike in personal allowance
Ive got a feeling we will see a hike in the personal allowance over the already planned 10500

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Replying to Martin Schneider:
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By sumo69
04th Mar 2015 23:55

More than a feeling...

thacca wrote:
Ive got a feeling we will see a hike in the personal allowance over the already planned 10500

Errr,,,yes you may be right given the Chancellor announced in the pre-Xmas "mini-budget" that it will actually be £10600!!

David

 

 

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Replying to Lone_Wolf:
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By thacca
05th Mar 2015 09:23

even so
Ooops ill send back my certificates. I still think it could be raised further.

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By Old Greying Accountant
04th Mar 2015 19:28

Middle earners ...

... will be screwed some more.

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Replying to Tickers:
By ShirleyM
04th Mar 2015 19:33

Spot on, OGA

Old Greying Accountant wrote:

... will be screwed some more.

Tax cuts for the wealthy and big business has to be funded somehow.

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paddle steamer
By DJKL
05th Mar 2015 10:30

How to be generous when has no money?

How can George make us all love him and Dave when he has no money to fund anything?

Hand out all the shares in Royal Bank to the electorate, divide the number of shares held by the number on the electoral roll and issue each a share certificate.

Why depart from tradition, bribery has worked for hundreds of year in British politics.

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By dropoutguy
05th Mar 2015 13:54

Election bribes


How about (a) a 35% band for the first £10,000 of what is now 40% earnings; (b) allow people under 55 to withdraw the tax relief from their pensions once every five years (c) a lower rate band for inheritance tax; (d) reduce rate of CGT on entrepreneurs gains to 8%; (e) restore indexation allowance

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Replying to John Stokdyk:
paddle steamer
By DJKL
05th Mar 2015 15:20

Your bribe

dropoutguy wrote:


How about (a) a 35% band for the first £10,000 of what is now 40% earnings; (b) allow people under 55 to withdraw the tax relief from their pensions once every five years (c) a lower rate band for inheritance tax; (d) reduce rate of CGT on entrepreneurs gains to 8%; (e) restore indexation allowance

I am not sure your bribe is reaching the target audience, you need something that benefits the many not the few. 

The Roman's had the right idea, bread and circuses.

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By memyself-eye
05th Mar 2015 15:34

"something that benefits the many not the few"

Or the one.....

Sorry, a Spock moment.

Beer duty will be cut again, that will benefit this one!

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Replying to gainsborough:
paddle steamer
By DJKL
05th Mar 2015 16:29

I was thinking yesterday......

memyself-eye wrote:

Or the one.....

Sorry, a Spock moment.

Beer duty will be cut again, that will benefit this one!

I was thinking yesterday, when this thread started, of what a budget inspired by Farage would be like, to date I have:

Beer duty slashed

Duty on cigarettes slashed

Passport application fee increased to £20,000.

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By Martin B
05th Mar 2015 15:54

IHT

Nil rate band to increase to £400k or at a reduced flat rate of 25%

 

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By jon_griffey
05th Mar 2015 18:27

[***] the self-employed

"Will we see a further shift in the burden of taxation from companies to individuals?"

This is increasingly the theme in Budgets.

Those who choose to trade as a partnership or LLP are viewed on as a tax avoiding ne'er-do-wells and not genuine businesses and so have to suffer continual tax hikes and anti-avoidance measures, but trading as a limited company, where you can simply opt out of NIC is considered virtuous.

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By the_fishmonger
06th Mar 2015 11:59

Pensions permitted to hold mixed commercial/dwelling properties

would be a sure-fire vote winner. It achieves many things:

 

People with pension pots but no cash in their own right could purchase shop/offices with living accomodation and start their businessesAll those vacant properties above shops which are in buildings owned by large pension schemes could be let out - what housing shortage?*The 'High Street' suddenly becomes populated and crime is reducedMoney is injected into the economy which is currently relatively idle (and will make better longer term returns in both the rentals and appreciation in value)The money is not lost from the pensions

* assuming c10,000 towns and cities could supply 20 such properties, the 200k homes required would be there almost instantaneously, subject to upgrade works**, etc.

** further stimulating the economy with the 'trades'

There would need to be anti-abuse measures to prevent large pensions being used to provide lavish mansions to fat cats or their close relatives but that should be fairly simple to legislate.

I put this to the house as a bloody sensible...oh [***]!

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Replying to [email protected]:
paddle steamer
By DJKL
09th Mar 2015 13:47

Great Idea Fishmonger

the_fishmonger wrote:

would be a sure-fire vote winner. It achieves many things:

 

People with pension pots but no cash in their own right could purchase shop/offices with living accomodation and start their businessesAll those vacant properties above shops which are in buildings owned by large pension schemes could be let out - what housing shortage?*The 'High Street' suddenly becomes populated and crime is reducedMoney is injected into the economy which is currently relatively idle (and will make better longer term returns in both the rentals and appreciation in value)The money is not lost from the pensions

* assuming c10,000 towns and cities could supply 20 such properties, the 200k homes required would be there almost instantaneously, subject to upgrade works**, etc.

** further stimulating the economy with the 'trades'

There would need to be anti-abuse measures to prevent large pensions being used to provide lavish mansions to fat cats or their close relatives but that should be fairly simple to legislate.

I put this to the house as a bloody sensible...oh [***]!

There may be a vacancy for a Chancellor post election, I would get your CV in now, one of the most innovative ideas around. Have a Rec.

You could extend it further with simplification/relaxation of the rules re trapped input vat on conversion followed by exempt leasing which often involves jumping through hoops re setting up an entity to perform the design and build  contract to deal with vat on the professional fees, these can be a significant element of the total cost re conversions.

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By Ian_mcdonald
09th Mar 2015 12:52

Same old same old ....

I predict 2 themes in the budget measures;

1. There will be lots of little give away vote winning treats and a few heavily disguised claw backs to fund them.

2. Although we desperately need tax simplification we will not see any -  the above measures will just make it worse.

As I say - same old same old.

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By raybackler
09th Mar 2015 12:57

Mixed commercial/dwellings is a great idea

Well done the _fishmonger!

I once went to a Fish Mongers where the family lived above the shop - it was great.

Property often has a dual use, such as living in a pub or above a shop, but as has been noted there is a huge amount of dead space, where the shop is occupied, but the upstairs areas are wasted.  Because this type of property is prevented from being in pension funds, it stops those in high street retail businesses from taking the route of using their pension funds that many business people take with commercial property.  The law as it stands effectively disadvantages this type of retail property.  This would contribute towards rejuvenating the high streets that are under threat in most smaller towns.

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By Montrose
09th Mar 2015 13:53

Politics

1] Announce revaluation of properties for Council Tax, with new bands aboive "H"-  so shooting the mansion tax fox

2] Double IHT exempt gift levels, which have been unchanged for 40 years!

3] Possibly announce  notice of termination of UK / Irish and UK/ Luxembourg DTA's , subject to EU rules to enforce taxation of multinationals 

And in second budget, regardless of party

Increase in Fuel Duty

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By the_fishmonger
09th Mar 2015 15:12

Basic VAT Reform

Since I've had quite a few clients with this problem, I'd also instigate an income tax-like, progressive tax regime for VAT to prevent the 'falling off a cliff' effect which hits so hard.

Cafes (or similar buy zero-rated/sell standard-rate businesses) can suddenly find almost £10k* of their income becomes VAT payable to HM Treasury with very little to gain in input tax.

As with PAYE, using modern tills and IT for record-keeping, there is no real argument that this would add unnecesary burden on small businesses, especially if it allowed them to manage growth into higher taxation brackets more easily.

It should be possible to either reduce other business taxes using offset from the increase in VAT coming through or raise the 20% VAT threshold a little higher. The former being preferable so as not to disadvantage the small business owner.

VAT and the voluminous case law should tell us however, that any changes ought to be the forerunner of making VAT simpler altogether. I wouldn't fancy volunteering for that task!

* after accounting for reduced income tax/C4NI

======

Next year - abolish income tax/NI and put VAT on everything? No more grey market or trades doing 4 for HMRC+1 for the back pocket to avoid tax...but then what would all the HMRC minions and call centre staff do all day? :-p

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By pauljohnston
10th Mar 2015 08:58

@Fishmonger

Your property idea is a good one and would cost little in tax revenue's.  It may increase pension provision for shop purchasers though.

Your VAT idea is very similar to that for stamp duty.  I would suggest that a marginal rate of VAT apply so that by the time the turnover is £127k.  All sales are assessable to VAT otherwise all businesses would have a vat free threshold.

 

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Replying to rockallj:
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By Old Greying Accountant
11th Mar 2015 11:04

VAT threshold is a nightmare ...

pauljohnston wrote:

Your property idea is a good one and would cost little in tax revenue's.  It may increase pension provision for shop purchasers though.

Your VAT idea is very similar to that for stamp duty.  I would suggest that a marginal rate of VAT apply so that by the time the turnover is £127k.  All sales are assessable to VAT otherwise all businesses would have a vat free threshold.

... and well overdue a review.

Case in point is my B&B client, went over threshold and had to register, then lost 1/6 of their income as they can't add the VAT to the price as they would lose the custom (wasn't quite that bad as they had a load of repair expenditure initially then switched to flat rate, but none the less it was them paying the VAT, not the customer!).

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Replying to whatdoyoumeanwashe:
paddle steamer
By DJKL
11th Mar 2015 11:33

Europe and vat threshold?

Old Greying Accountant wrote:

pauljohnston wrote:

Your property idea is a good one and would cost little in tax revenue's.  It may increase pension provision for shop purchasers though.

Your VAT idea is very similar to that for stamp duty.  I would suggest that a marginal rate of VAT apply so that by the time the turnover is £127k.  All sales are assessable to VAT otherwise all businesses would have a vat free threshold.

... and well overdue a review.

Case in point is my B&B client, went over threshold and had to register, then lost 1/6 of their income as they can't add the VAT to the price as they would lose the custom (wasn't quite that bad as they had a load of repair expenditure initially then switched to flat rate, but none the less it was them paying the VAT, not the customer!).

I suspect you may wait a while.

As a fair number (I think most ?) of our EU partners have no threshold (I think in Sweden it is nil) I would suspect that the nil rate threshold might well be allowed to wither and die becoming , over time, worthless.  (Harmonise taxes by the back door)

You may recall the negligible relief on interest on undated 3.5% war stock (I think it was first £30 if memory serves), no doubt of some benefit to those waiting for the, as it seemed, never arriving redemption, and I suspect when first granted a welcome benefit, however soon to become merely one of the favourite exam little extras in  tax computation questions (as of course was election for separate taxation husband and wife)  The VAT theshold could well eventually become similar.

As we march ever onward towards unified European tax (Imputation no more, Threshold no more etc sung to a song by The Proclaimers)  the scope of a chancellor to do anything will become more and more constrained.

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Replying to DKB-Sheffield:
By ShirleyM
10th Mar 2015 10:31

I think the majority of the UK would be very unhappy

Ex Pat wrote:

I do wonder what will happen in the post election budget should Labour form a government propped up by the SNP. 

We all saw what happened over tuition fees, where the Scottish MP's swung the vote for tuition fees to be applied in England, but voted against the same law for Scotland! 

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By pembo
10th Mar 2015 11:21

hopefully

A recognition that  government and their big business friends largely got us into this mess and that the deficit could be solved at a stroke if you privatised the whole of the public sector and let someone with half a brain cell run the country.

Sorry just woke up..

Although it would kill us if I was him I would reintroduce investment income surcharge of 20% on anyone with such income over £10k. How many SMEs have director/shareholders being paid minimal salary + £30k dividends I wonder. This would also mean he could scrap the ridiculous IR35 that costs more to regulate than it takes.If any pensioner starts moaning about being hit then too bad as limited sympathy for you if you've that level of investment income

Perhaps also make sure all their mates at Whitehall/the judiciary etc etc are subject to the same backdoor measures as anyone else like for instance with pensions.

 

 

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Replying to memyself-eye:
paddle steamer
By DJKL
11th Mar 2015 10:58

Harsh on pensioners/savers

pembo wrote:

A recognition that  government and their big business friends largely got us into this mess and that the deficit could be solved at a stroke if you privatised the whole of the public sector and let someone with half a brain cell run the country.

Sorry just woke up..

Although it would kill us if I was him I would reintroduce investment income surcharge of 20% on anyone with such income over £10k. How many SMEs have director/shareholders being paid minimal salary + £30k dividends I wonder. This would also mean he could scrap the ridiculous IR35 that costs more to regulate than it takes.If any pensioner starts moaning about being hit then too bad as limited sympathy for you if you've that level of investment income

Perhaps also make sure all their mates at Whitehall/the judiciary etc etc are subject to the same backdoor measures as anyone else like for instance with pensions.

 

 

I think your dividend/ savings proposals are a bit harsh on pensioners. I presume it is okay to have  pensions of say £25,000 p.a. in retirement but not pensions of £15,000 and £10,000 pa of dividends?

A fair number of business people have little free funds for pension provision during their working life and maybe  they have no employer contribution as they are self employed. They end up selling their business and often invest the funds to supplement their meagre pension income- my father received basic state pension plus small RA in retirement, the other 50-70% of his income in retirement was dividends and bank interest from investing the sale proceeds of his business and  funds realised from downsizing the family house. Why should they be penalised compared with say a teacher or similar who qualifies for a final salary scheme (mainly paid for by the taxpayer)

I know my pension (and I have been paying into it since I was 25) and my wife's pension (thanks taxpayers for paying large chunks of this over the years) will probably not be sufficient to keep us in retirement, certainly if we retire before state pension age. The game plan will at some point be to sell the family house (which is already a bit big) and downsize, release some funds and invest them. Yes using ISA allowance will over time remove the problem but why differentiate the taxation?

I am not alone with this outlook, there are vast swathes in their 40s with no pension savings/ savings, their only asset their house which will, sometime in the future, have to follow the path I propose to make ends meet.

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Replying to Jfg:
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By pembo
12th Mar 2015 11:26

OK

@ DJKL I was really tongue in cheek about pensioners so we'll let them off even though I was only thinking of the excess over £10k. Assuming a very generous yield of 5% £10k = £200k invested somewhere hence comment about limited sympathy so we'll just stop their fuel allowance instead.There may be others who would be exempted but the main targets are fair game and surprised HMRC have not come up with something like this.There used of course to be a type of IIS many years ago and HMRC have been trying to attack this ever since GB made it so simple for us by abolishing ACT in 1998. They were mooting NIC a few years back but EU blocked that as dividends are deemed capital movements and cannot be taxed that way. Be tough on us but hey you'd get over it.

 

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By pauljohnston
11th Mar 2015 10:26

@pembo

By doing as you suggest you would reduce the entrepreneurial spirt that has gotten this country out of the recession.

Cutting Govt spending or rather doing the same job more efficiently is the way ahead.  Civil Servants are expensive when one takes into account their pensions and the fact that in many parts of the country the equivalent Civil Servant wage is higher than the private sector could/can afford.

But rest assured not much will happen.  The Chancellor will continue to tinker at the edges and take more than he gives.

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By andy.partridge
11th Mar 2015 11:45

As we are in the EU (for now)

Plus ca change plus c'est la meme chose

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By raybackler
15th Mar 2015 23:00

Lifetime allowance

@pembo

Just heard of someone who has been offered redundancy/early retirement on a pension of £40K, in a final salary scheme.  This translates to a Lifetime Allowance of £1.1m, which shades just inside the £1.25m limit.  The yield on this prudent savings level is 3.6%, which is way below the annual returns being achieved from live pension schemes.

Having little sympathy with those who have funds from which pension yields as generous as 5% are achieved is harsh.   Those who have been cautious with setting aside funds for retirement should not be penalised.  These people have made do with less disposable income during their working lives, so why should they be penalised now?

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By Montrose
17th Mar 2015 17:41

Wild card prediction

 The CROSSRAIL 2 website says that the "Safeguarding direction" is scheduled to be published in March 2015.. As well as committing to HS3, I wouldn't be surprised that the next stage in approving CROSSRAIL 23 may also be foreshadowed by the Chancellor

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