Join the Autumn Statement discussions

And so it begins!

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Hi everyone,

I thought I would create this post as a place for you all to share and comment your reactions, thoughts and burning questions during and after the Chancellor's speech. 

It will be interesting to see what Jeremy Hunt has to say and what you guys think about it. 
 

Replies (32)

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By Mr_awol
22nd Nov 2023 12:50

"borrowing is just a deferred tax on future generations"

"we are keeping the triple lock"

Not statements that I'm not entirely sure are compatible with each other when today's pensioners are (on the whole) better off than their offspring.

Amazing how the magic money tree bears fruit when you are facing an election you are currently tipped to lose......

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Replying to Mr_awol:
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By rmillaree
22nd Nov 2023 13:35

"Amazing how the magic money tree bears fruit when you are facing an election you are currently tipped to lose"

yep its unbelievable disgrace and yet it seems to work with voters to a certain degree . To me the damage was probably particulalry done in 2002-2008 and 2011-2018 periods - increasing national debt in real terms when times were not bad and we had the freebie of decent oil revenues (that wont last forever) was plain silly - if only we had continued the prudence trend of paying down debt in real terms (it may still have gone up a tad) as we did up to 1973 . Hey ho perhaps hign inflation actually means its not so much an issue as i think it is if that means it could be going up less than stupidly high inflation rate.

https://www.economicshelp.org/blog/163755/economics/historical-uk-nation...

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By Wanderer
22nd Nov 2023 12:56

"110 measures"

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Replying to Wanderer:
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By Mr_awol
22nd Nov 2023 13:08

And at this rate it's going to take him five minutes to deliver each one. Might have to come back tomorrow to find out what the NI rate is

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By Mr_awol
22nd Nov 2023 13:14

Class2 gone.

Class4 down 1%.

Got to be honest, I'm struggling to see the justification for class 4 being less than class 1, and would have assumed a cut to the employees' rate would be an opportunity to level it up a bit.

If Class 1 doesn't get a similar 1% reduction i think it'll be scandalous TBH

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Replying to Mr_awol:
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By bigdave1971
22nd Nov 2023 13:18

Mr_awol wrote:

Class2 gone.

Class4 down 1%.

Got to be honest, I'm struggling to see the justification for class 4 being less than class 1, and would have assumed a cut to the employees' rate would be an opportunity to level it up a bit.

If Class 1 doesn't get a similar 1% reduction i think it'll be scandalous TBH

Unless there is a rabbit coming out of the hat for small limited companies, this is again making self employment more attractive.

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Replying to Mr_awol:
Slim
By Slim
22nd Nov 2023 13:19

going to aid the shift from ltd co to self employed.

wonder if i can get some cast iron insurance to keep my personal assets safe

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Replying to Slim:
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By Mr_awol
22nd Nov 2023 13:22

Gonna be boning up on LLP planning i guess

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Replying to Mr_awol:
By Ruddles
22nd Nov 2023 13:25

Your wish is granted

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Replying to Ruddles:
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By Mr_awol
22nd Nov 2023 13:31

Ruddles wrote:

Your wish is granted

Nearly. It's certainly a start, per my update (ironically below). And sensible too.

Once s/e and employed NI rates are equal, they can be gradually dropped and tax increased until we pop out at around 25% BR tax (based on no research or budgeting whatsoever, other than an assumption that the rake on pensioners will offset the loss on hardworking people).

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Replying to Mr_awol:
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By Mr_awol
22nd Nov 2023 13:26

OK, so that makes more sense. 2% cut to class1 brings it closer, and leads us into future abolition of NI and/or amalgamation into tax

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Slim
By Slim
22nd Nov 2023 13:25

ah there you go

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Caroline
By accountantccole
22nd Nov 2023 13:29

I wish they'd stop changing NI mid year......

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Replying to accountantccole:
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By Mr_awol
22nd Nov 2023 13:32

I could practically hear my payroll department thumping the desks at that point :D

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Replying to Mr_awol:
Caroline
By accountantccole
22nd Nov 2023 13:38

The pension consultation where we have 20 ees with 20 different pension schemes should be fun if that comes in too!

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Replying to accountantccole:
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By Mr_awol
22nd Nov 2023 13:56

Yeah - TBH i heard that and thought it could be a major headache - not so much for the payroll mob, but for the employers. Then i decided to ignore it as it's a consultation and surely they'll flag that at the time and scrap it, and if not i'll worry about it if/when it happens.

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stonks
By WinterDragon
22nd Nov 2023 13:45

Whilst many of our clients may be celebrating the cut to NI, if all our small limited companies switch to self-employed then our fees will drop quite a bit but then they'll go right back up when MTD comes along. (If or when?)

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By KennethMennie
22nd Nov 2023 13:50

Re MTD

"Simplifying Making Tax Digital for Income Tax
Self-Assessment
Measure description
This measure is a package of design changes to simplify and improve
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA). It
includes:
• Removing the requirement for End of Period Statements
• Changing the design of MTD for ITSA quarterly updates so they work
on a cumulative basis, making it simpler for customers to submit
corrections
• Enabling customers to be represented by more than one tax agent
• Introducing exemptions from MTD, including for taxpayers without a
National Insurance number
• Simplifying processes for landlords with jointly owned property
This measure will be effective from April 2026, as part of the
introduction of MTD for ITSA"

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Replying to KennethMennie:
Tornado
By Tornado
22nd Nov 2023 15:55

That is a significant improvement then, just four inaccurate quarterly submissions a year instead of five.

Just one accurate submission a year is all that is really needed

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By Duggimon
22nd Nov 2023 13:56

So just to be clear, the axing of class 2 NIC means all my self employed clients earning below the class 4 threshold now need to pay four times as much for an NIC credit? A valuable concession to the lowest earners removed so those who can afford it pay £200 less?

Seems like they could have knocked an extra 1/4 percent off the class 4 rate and left it in there instead of quadrupling the tax bill for anyone getting by on £6K self employment who still needs their NI credits.

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Replying to Duggimon:
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By Mr_awol
22nd Nov 2023 14:06

I'm not sure anyone 'getting by on £6k s/e income' and paying nothing into the system needs (or should that be deserves?) their (cheap?) NI credits.

Harsh i'll admit but fair I'd say. God i can feel myself turning ever so slightly Tory as i type that. Must go bleach my fingers.

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Replying to Mr_awol:
By Duggimon
22nd Nov 2023 15:08

I guess to save the system anyone getting by on £6k a year should just die when they reach pensionable age then.

The point of the state pension isn't to give back to everyone what they put in, it's to financially support people who are too old to work and advocating for withdrawing that support is a lot more than slightly Tory, imo.

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Replying to Duggimon:
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By Mr_awol
22nd Nov 2023 15:25

No. People scraping by on £6k a year on a s/e basis are, in my experience, likely to come under one or more of the following categories:
- not main source of income (lifestyle business, supplemented by employment or rental portfolio, etc)
- suppressed (cash) income not declared
- Supported by wealthy parents or spouse
- I wont go on, but you get the idea - people who don't 'need' cheap NI credits because they are 'choosing' to accept a nominal s/e income (yes, very Tory, I'll be saying homelessness is a choice next but read on and i'll explain where i'm coming from).

Ultimately my stance is about stopping a wealthy landlord/lady from accumulating cheap NI credits because they run candle parties or reiki workshops for their rich mates and show a nominal profit which entitles them to voluntary Class 2 or low earnings exception.

Your example seems to indicate someone is trying their best, with no outside source of income, and still only making£6k pa and somehow surviving on that. I reckon they'd be better off on benefits and in the event that they reach retirement age without a (state or other) pension they will claim pension credit, housing benefit, etc etc etc.

If you care to give anonymous examples of the situations of some of these clients of yours who work full time, aren't supported by another person or income source, and continually get by on £6k a year by all means i will consider them and there might be a few who are genuinely hard done by - but if it's people who chose to take early retirement from a cushy job at the council so they could spend all day playing golf, but want a few extra quid to top up their income and havent yet got full State Pension entitlement, then sympathy may be in short supply.

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Replying to Duggimon:
Caroline
By accountantccole
22nd Nov 2023 14:15

Thought he said something about not losing benefits accrued ....

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Replying to Duggimon:
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By suepg
22nd Nov 2023 14:21

Wasn't this proposed, then subsequently scrapped in 2018?

At that time, they dealt with the question of contributing for the purpose of contributory benefits as follows:

Access to contributory benefits for the self-employed is currently gained through Class 2 NICs. After abolition, those with profits between the Small Profits Limit and Lower Profits Limit will not be liable to pay Class 4 contributions but will be treated as if they have paid Class 4 contributions for the purposes of gaining access to contributory benefits. All those with profits at or above the Class 4 Small Profits Limit will gain access to the new State Pension, contributory Employment and Support Allowance (ESA) and Bereavement Benefit.

Clearly this will not be the case now!

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By JCresswellTax
22nd Nov 2023 13:57

But they never cut employers NIC, the most ridiculous tax there is!

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By charlied
22nd Nov 2023 14:14

Given that in April 2022 increased NI by 1.25% for money for social care and an overstretched NHS.
How does Mr Hunt now continue to maintain the increased funding to the social care and the NHS?

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By Truthsayer
22nd Nov 2023 14:23

Class 2 abolished....the details will be crucial. Will there be a zero rate of Class 4 between £6725 and £11908 to replace it? Does it mean if your profits are below £6725 you will have to pay Class 3 to make the year count towards state pension?

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Replying to Truthsayer:
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By FrankTax
22nd Nov 2023 14:46

This is what I'm wondering...

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Replying to Truthsayer:
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By bigdave1971
22nd Nov 2023 17:03

From the government factsheet ...

Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so. The weekly rate they pay will be frozen at £3.45 for 2024-25, rather than rising by CPI to £3.70.

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Replying to Truthsayer:
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By bigdave1971
22nd Nov 2023 17:05

0.5 Key National Insurance Rates and Thresholds from 6 April 2024
NICs Primary Threshold / Lower Profits Limit £12,570 (annual)
Class 1 NICs Main Rate (from 6 January 2024) 10%
Class 4 NICs Main Rate 8%
Lower Earnings Limit £6,396 (annual)
Small Profits Threshold £6,725 (annual)
Class 2 Rate (for those paying voluntarily) £3.45 (per week)
Class 3 Rate £17.45 (per week)

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By Matrix
22nd Nov 2023 17:07

So will the NIC and SA offices ensure that the newly self-employed get an NI stamp by aligning the registration process?

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