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Emergency budget 6th July


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HOLA441
Just now, sammersmith said:

All this reminds me of the Cyprus money grab from a few years back, though IIRC the narrative there was that 'it's all Russian laundered money'.

If they did this where do they draw the line? Taking money from children's savings accounts? Cue videos of children crying. Look what you did to the children, Rishi! 

Yes from memory the limit was 100,000 EURO before the tax took, in each account. 

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HOLA442
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HOLA443
1 minute ago, Pmax2020 said:

I earn a pretty average wage and fully expect and agree that tax contributions will rise to help with this crisis. I would however be pretty p*ssed if my savings get raided!!!

Again why this wont happen - there are lot less "screamingly unpopular" tax rises than this.

Worth noting the only "rumour" that it would is an unsubstantiated post here. 

Edited by captainb
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HOLA444
2 minutes ago, Dorkins said:

Why would they introduce an unpopular tax hike when the cost of borrowing is so low? Just chuck it on the credit card and let someone else worry about it later.

They can borrow or print, provided the markets will let them.

Either way, that will just devalue the currency. You either pay your 5% wealth tax or you get your cash devalued by 5% through inflation.

I think the government is in a dangerous place regarding borrowing. It almost certainly wants to inflate to devalue the debt, but the minute the markets get a sniff of that they are going down that route its going to get really interesting.

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HOLA445
33 minutes ago, longgone said:

being prudent gets you jack. 

I agree.  You get hit at every turn.  In hindsight, it may have been better not to save and spend instead.  At least if I lost my job, I would get my rent, bills and money paid to me every month.

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HOLA446
1 hour ago, Pmax2020 said:

Forgive me for sounded daft but would a 5% wealth tax literally mean if you have £10k in your savings account the government could immediately take £500 from you?!?!

You are probably earning 0,01% in that savings account compared to perhaps 1.5% pre COVID. That is £149 a year before you even start!

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HOLA447
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HOLA448
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HOLA449

Distinct lack of sources here.

How do you tax Defined Benefit Pensions? The bulk of those are probably unfunded so would actually cost the treasury, and a good chunk payable to NHS staff, really bad politics. Private sector DB mostly in deficit. DC are easier as there is a pot, but bad optics.

Savings, again possible, but the MPs are just recovering from their Cummings email avalanche. They don't want a bunch of angry 50-75 year olds turning up at their office/house in the nice tory shires with pitchforks.

Self Employed NI, Sunak already trailed an increase in this, I suspect that increases in the rate of this might be tied to the increases in the NI threshold so that no-one, or only relatively high earners see an increase in their actual bill. Though the self employed might not get the reductions.

At the moment they can pay for it all with very cheap BoE toilet paper. Something like a car scrappage scheme or extending newbuild HTB* would make more sense, they/we need British people to get back to work and make stuff or at least do stuff. If a tax is easy to collect and widely popular it has probably already been done. The only  ones I could really see fly are some sort of Tobin Tax (hard to do unilaterally) or LVT.

*if this is linked to housebuilders having to maintain or increase their current rate of building I don't think it's the worst idea in the world. Given we need brickies laying and joiners joining etc.

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HOLA4410
43 minutes ago, Tulip_mania said:

Distinct lack of sources here.

How do you tax Defined Benefit Pensions? 

https://pensionhelp.co.uk/cetv/

The actual proposition is a % of net assets, allowing for a personal allowance with the option to deduct direct from your pension pot. Prob ably a non starter given the difficulty collecting it from a lot of people.

More likely outcome; significant increase in income tax. 

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HOLA4411
5 minutes ago, Hullabaloo82 said:

More likely outcome; significant increase in income tax. 

Back to contracting for a bit then I spose.. 

Bit fiddly these days with the need to have demonstrably genuine multi clients, use own gear, convince clients to allow self direction.  But doable, some mates have already.

Or maybe its time to just Jack it in, live humbly & drawdown at a lower rate for more years (57 in Aug).

Its going to be quite pants to very pants for most people for the next decade or so.. hard to see a way round it.

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HOLA4412
14 minutes ago, hotblack42 said:

Back to contracting for a bit then I spose.. 

Bit fiddly these days with the need to have demonstrably genuine multi clients, use own gear, convince clients to allow self direction.  But doable, some mates have already.

Or maybe its time to just Jack it in, live humbly & drawdown at a lower rate for more years (57 in Aug).

Its going to be quite pants to very pants for most people for the next decade or so.. hard to see a way round it.

Late 30s here. I will likely gamble in contracting in the event off a significant income tax rise also. 

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HOLA4413
43 minutes ago, Hullabaloo82 said:

Late 30s here. I will likely gamble in contracting in the event off a significant income tax rise also. 

IR35 is going to ruin that route. That was planned before all this, makes me wonder if this wasn't all intended.

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HOLA4414
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HOLA4415
6 hours ago, Hullabaloo82 said:

Late 30s here. I will likely gamble in contracting in the event off a significant income tax rise also. 

5p on VAT? After all the tories have form on this, after Black Wednesday and the poll tax riots

Edited by debtlessmanc
Got my black days mixed up
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HOLA4416
11 hours ago, btl_hater said:

So they are going to tax our housing deposits?

In an ISA?......cash ISAs have some of the lowest interest rates ever, lower than other saving accounts, used to pay a top rate...now on the floor....I wonder how much has been withdrawn over the last few years??

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HOLA4417
1 hour ago, winkie said:

In an ISA?......cash ISAs have some of the lowest interest rates ever, lower than other saving accounts, used to pay a top rate...now on the floor....I wonder how much has been withdrawn over the last few years??

My savings are certainly not inflation proof. But what do I do– I want instant access to the whole lot?

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HOLA4418

I suspect that, among other measures, the IHT exemption of pension pots, including SIPPs, will be rescinded.

The rich use family trusts, land and business exemptions etc. to avoid IHT, the poor are not affected by it.

There are lots of heavily pensioned, middle class post-WW2 boomers now dying due to COVID and the other more usual causes.

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HOLA4419
1 hour ago, debtlessmanc said:

5p on VAT? After all the tories have form on this, after Black Wednesday and the poll tax riots

That is a good shout. 

Would cause a rush to buy goods and shift all the excess stock from the shops as well...

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HOLA4420
1 minute ago, The Spaniard said:

I suspect that, among other measures, the IHT exemption of pension pots, including SIPPs, will be rescinded.

The rich use family trusts, land and business exemptions etc. to avoid IHT, the poor are not affected by it.

There are lots of heavily pensioned, middle class post-WW2 boomers now dying due to COVID and the other more usual causes.

You know who the Tory donors are right?

Thats complex for the average person so they wont get why THEY benefit... and the press wont explain as LOOK AT CELEBS ON HOLIDAY.

It is however very clear to those it impacts and donate to the party.

Cant see it happening (unfortunately) 

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HOLA4421

I am amazed how much money people seem to have to spend on campers, Porches and Aston Martins.  There are places where tax could be levied on spending such as cars.  I am very opposed to tax on savings as this would prevent investment.  Rather it would be better to tax the idle rich of which there are very many.  I fear this may also hit the hard pressed savers who are not by any means rich but have 50 or 100k salted away.  

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HOLA4422

I've had a look through a few of the articles stating there will be a budget and I can't find any references to taxation, just 'job creation infrastructure projects' and 'support for new tech businesses' 

Usually they are pretty clear in indicating any tax changes up front, they get a bit of pushback then change their ideas - the changes to pension relief briefed last year for example which didn't materialise. Of course there are 4 weeks to go, bet its a bit of a roller-coaster. 

Agreed something will have to happen though, Sunak has already spent £123Bn on wage protection and business loans alone. The tax take is about to go through the floor, and now it seems he's proposing a 'peak soviet' social construction plan.

Otlichno comrade! 

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HOLA4423
17 minutes ago, satsuma said:

I am amazed how much money people seem to have to spend on campers, Porches and Aston Martins.  There are places where tax could be levied on spending such as cars.  I am very opposed to tax on savings as this would prevent investment.  Rather it would be better to tax the idle rich of which there are very many.  I fear this may also hit the hard pressed savers who are not by any means rich but have 50 or 100k salted away.  

Many of those are the 25% tax free lump sums from pensions. Certainly my in laws bought a camper then a holiday cabin with their respective 25% lump sums. 

That's a very important point, that 'poor people' can have £50 to £100k saved.... Many people were advised to hold cash and live on the interest before interest rate collapsed. Annuity rates and returns had been on a long downward slide even then and many people were waiting for rates and annuity returns to rise again, and in the interim thought it was better to sit in the cash than take a 'poor' annuity rate 

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HOLA4424
13 hours ago, GregBowman said:

Rumour has it 5% wealth tax on everything you own.

The problem with that idea is that one would then need to value everything everyone owns.  What is the value of this priceless picture of  "The Fallen Madonna With The Big Boobies by van Clomp"?  If we assume market values for assets, and we know that holding the asset will attract a 5% tax, then the value of the asset falls by 5% - but that establishes a new market value... and that will attract a 5% tax - and so on... over and over again.  This will wipe out the collateral that underpins the financial system... resulting in economic collapse.  The winners will be whoever gets to arbitrarily decide what everything is worth - their ability to charge fees will be the stuff of legends.

I'm not concerned, at all, by a 5% tax on cash.  This is equivalent to ~5.3% inflation... which (given below target inflation in recent years) would have a similar effect as a successful implementation of the 2% CPI target - when considered over a few years.  When taxes are levied uniformly, so as to avoid market distortions, they have no effect beyond nominal prices.  Taxes are disliked because they do introduce market distortions - and not everyone likes the particular distortions they cause.

I don't think any of this is very likely.  I think a budget on 6th July 2020 will reflect that the UK knows if there will be an extension to the withdrawal implementation phase past 31st December 2020. 

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HOLA4425
17 minutes ago, regprentice said:

Many of those are the 25% tax free lump sums from pensions. Certainly my in laws bought a camper then a holiday cabin with their respective 25% lump sums. 

That's a very important point, that 'poor people' can have £50 to £100k saved.... Many people were advised to hold cash and live on the interest before interest rate collapsed. Annuity rates and returns had been on a long downward slide even then and many people were waiting for rates and annuity returns to rise again, and in the interim thought it was better to sit in the cash than take a 'poor' annuity rate 

i would say 80% of (privately owned) canal boats are bought with pension lump sums, at around £40-80k perfect value for a council or NHS worker

 

 

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