This link will be updated as the day goes on...
www.bbc.com/news/uk-politics-46017125
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The end of PFI was a bit of a surprise.
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"Private finance initiative (PFI) contracts to be abolished in future"
I wonder what exactly that means. There is a lot of 'outsourcing' e.g. 8% (I read somewhere recently) of NHS spend is to private providers, and I suspect that excludes the cost of what is currently labelled PFI.
Last edited by: Manatee on Mon 29 Oct 18 at 18:09
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Presumably existing PFI contracts will run their course. I am still happy there will be no new PFIs.
Everyone on here should pay lower income tax which must be good news for all. Someone on low income might pay nothing in income tax.
Not sure how we should react to a special EU 50p coin to coincide with leaving the EU. So we can all be reminded of the EU for decades to come I guess.
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I watched the Budget - Hammond can be quite amusing - and he did say that he would not terminate contracts early and incur penalties.
It all sounded quite positive to me but Laura whatsername and Andrew Neill were sometimes putting up snipey comments on captions during the speech.
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I certainly do not agree with increasing the personal allowance, except in line with inflation. It only serves to be a nice extra bit of tax-free income for the middle-income households with two earners. The very poor are not helped because those on min wages, zero hours etc. are most probably not paying tax anyway.
Good news about scrapping PFI though although I'm always a bit suspicious. I wonder whether it will re-appear as some other scheme - but at face value it's good news.
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So your definition of middle income is someone earning more than £11,850 a year because that is the current personal allowance.
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Someone on the NMW working a 35 hour week would be on about £14,000.
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PFI contracts to end - good, but there have been no new PFI contracts issued for at least a year anyway.
The promise of £2bn for mental health is already included in the extra funding for the NHS - so he is effectively making the announcement twice - double counting!
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>> Someone on the NMW working a 35 hour week would be on about £14,000.
There are a lot of people on min wage jobs in retail or fast food for whom 35hrs is a dream, 16-24 would be more like it. Employer prefers flexibility and substantial Employer NI saving by having 2*16 hrs rather than one full timer. A couple both doing that sort of work gain nothing from the rise in thresholds while a couple both on good final salary pensions, get the full benefit for each of them.
Will be interesting to see how extra money for Universal Credit is utilised. There are a lot of losers at present, particularly in two 'deserving' groups; working families and severely disabled.
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>> I certainly do not agree with increasing the personal allowance, except in line with inflation.
>> It only serves to be a nice extra bit of tax-free income for the middle-income
>> households with two earners. The very poor are not helped because those on min wages,
>> zero hours etc. are most probably not paying tax anyway.
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For someone working a nominal 37.5 hour week the new minimum wage is around £16k per year. So it would make sense to increase the personal allowance to that level. I’d also increase the level at which employees NI is payable - I think the lower earnings limit is around £8k a year at the moment. But I’d also merge employees NI and income tax; they both go to the same pot anyway.
But why should pensioners pay what was NI I hear people say...well, as higher users of the healthcare system I think it’s only fair they pay something.... ;) It’d get a bit messy around tax on dividends, so I’d wrap that in too. In reality, why should where the income has come from determine the rate of tax applied to it...?
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>> For someone working a nominal 37.5 hour week the new minimum wage is around £16k
>> per year. So it would make sense to increase the personal allowance to that level.
It does appear to be ludicrous to mandate companies to pay a minimum amount, and then penalise the employee for doing so. It is in effect a tax on the employer, forcing them to pay a certain wage and then taking it away.
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>>But why should pensioners pay what was NI I hear people say...well, as higher users of the healthcare system I think it’s only fair they pay something...
Because it is National *Insurance* and this is the way insurance works.
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>> >>But why should pensioners pay what was NI I hear people say...well, as higher users
>> of the healthcare system I think it’s only fair they pay something...
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>> Because it is National *Insurance* and this is the way insurance works.
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Normally, to benefit from insurance you have to keep paying the premiums ;)
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>> But why should pensioners pay what was NI I hear people say
OK I'll bite.
Because it is already my money! I don't mind paying the tax, I either paid it when I earned it or I was let off it when I put it into the pension and pay it now*, but the NI has already been paid.
I think there is a general level of recognition that pensioners generally have a much lower level of income in retirement than they did when they were working, and we have to pay for all those holidays you know:)
We generally live on a reduced income plus savings, with no real opportunity to earn any more money if we run out.
I have no guilt about this. Don't forget inheritance tax which for most ordinary folk who own houses can only really be reduced by spending it (and incurring 20% VAT).
I agree I am more of a burden on the health service now. But it can be expensive being ill too, and it rather undermines the principle of the NHS to tax people for being poorly. You're clearly a nice chap so I'm sure you wouldn't want to tax families more highly for using the education system either.
*if I did have a bad conscience it would be because I always thought that higher rate tax relief on pension contributions was unfair to lower earners who needed better value from their pensions and were denied it. I suppose there must have been some logic to it.
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I think there is a general level of recognition that pensioners generally have a much
>> lower level of income in retirement than they did when they were working, and we
>> have to pay for all those holidays you know:)
True, not to play the strawman but I would put those working on nmw in the same bracket as not much income but get no exemption.
I'd bet most of the pensioners on here are on a higher income than those on the nmw.
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I don't think anybody here would claim that we are a representative sample of the population as a whole, but there are thousands, if not millions, of pensioners who would be left a lot poorer by deducting NI from their pensions.
Far bigger problem is the proportion of self employed who are escaping NI but are actually far longer with a particular employer than many of the full time employees.
As a couple of people have pointed out we really need to get away from the view that a good budget is always one that reduces taxes.
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Of course not, just an observation on a our little sample size here and that there are holes somewhat in the principle.
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>> As a couple of people have pointed out we really need to get away from
>> the view that a good budget is always one that reduces taxes.
Don’t forget, I increased the personal allowance to £16k as well ;)
Last edited by: VxFan on Wed 31 Oct 18 at 02:00
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mega snip quote. There really is no need to quote everything, as per the pop up request hinting so!
>> *if I did have a bad conscience it would be because I always thought that
>> higher rate tax relief on pension contributions was unfair to lower earners who needed better
>> value from their pensions and were denied it. I suppose there must have been some
>> logic to it.
I agree there’s some detail to work out ;) But I’m on holiday so I’m not firing up a spreadsheet!
Still, I reckon a personal allowance of £16k which applies to both income tax and NI blended together at 32% would make an employed person on £35k around £1,500 a year better off, and a person with £35k of pension or unearned income £1,500 worse off. That’s metal arithmetic, so could be wrong! But the Chanceller just made those with a pension of £50k £900 better off next year ;) Still, some tweaking of rates required but the principle is achievable I’m sure without disadvantaging the majority.
Blending NI and income tax would also mean changing the 40% rate, though as you only currently pay 2% above the upper earnings limit it wouldn’t have to be 52%. I reckon 43% or 44% would cover it. Dump the 45% rate and limit pensions tax rate to the new basic rate of 32%. That’s 50% more tax relief for basic rate tax payers, encouraging people to save for old age. And just 15% less tax relief for higher rate tax payers. It’d make the tax system much simpler as well :)
If I was feeling bullish I might even propose transferable personal allowances, which would probably benefit pensioners as much if not more than those in employment, taking great swathes out of the tax system all together :)
And I’m certainly not taxing people for being ill or having families..., that’s reading more into my thoughts than I put in ;)
While the above I’m sure over simplifies things, I reckon it’d be pretty easy to find a blended rate and personal allowance that made no difference to those living on unearned income of £35k (or maybe even chose the £50k basic rate limit), made those with earned income of up to £50k better off and cost those on earned or unearned income a little bit more. By which I mean 3 or 4%. Easy this Chancellor of the Exchequer lark!!
Last edited by: VxFan on Wed 31 Oct 18 at 01:59
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>> But why should pensioners pay what was NI I hear people say...well, as higher users
>> of the healthcare system I think it’s only fair they pay something.... ;)
Allowing relief from NI for people over state pension age is one thing. Current situation where folks like Zero and I who are still some way off State Pension/Pension Credit age but early retired pay no NI on our occupational pensions is another.
Last edited by: Bromptonaut on Tue 30 Oct 18 at 23:37
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>> Allowing relief from NI for people over state pension age is one thing. Current situation
>> where folks like Zero and I who are still some way off State Pension/Pension Credit
>> age but early retired pay no NI on our occupational pensions is another.
I wouldn't (still) be some way off state pension age if they hadn't shifted it. But it is true, I haven't paid NI for 8 years, and will be 10 years in total by the time I get my state pension.
But on the other hand, over my career my tax/NI share was higher than the average, so It kinda evens out in the end.
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Yes but you have paid the predetermined number of years contributions to qualify for the the state pension. To change the rules retroactively would seem by most to be unfair
There is also the point that you will be returning a good chunk of your state pension back to the government in the form of tax especially if you pay at the higher rate.
There is a better case for pensioners to continue paying for that element of the NI contribution that goes towards the Health Service rather than the State pension if that could be determined.
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>> Allowing relief from NI for people over state pension age is one thing. Current situation
>> where folks like Zero and I who are still some way off State Pension/Pension Credit
>> age but early retired pay no NI on our occupational pensions is another.
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But if NI were scrapped and merged into income tax, where would that leave the requirement to accumulate enough credits to secure the full state pension?
You would still presumably have to have "National Insurance" in order to award credits to people who were carers, etc?
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>>Merge NI and income tax
Too right. It's quite ridiculous to have two completely different sets of rules for the two taxes. Idiotic complexity.
>>How would you qualify for state pension
You don't actually have to have *paid* any NI to qualify for the full state pension... just to have earned just-about enough; currently approx £800 per month. So all you have to do is to say that you need to earn £800 per month to qualify. Easy.
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> So all you
>> have to do is to say that you need to earn £800 per month to
>> qualify. Easy.
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"Earned" rather than received benefits?
Carer's allowance, disability allowance, child allowance?
What about unpaid carers?
Any income, or just earned?
Interest, dividends, other pensions?
Could you still "buy" extra years to cover any missing?
To cut out all these complexities and need for records, why not just give a full pension to everyone at 67 or whatever?
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>> To cut out all these complexities and need for records, why not just give a
>> full pension to everyone at 67 or whatever?
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Replace earned with ‘have an income of at least’ and maybe it’s easier? That’d cover any benefits. And one of the advantages, or differences at least, of combing NI and income tax is that the actual source of the income is irrelevant...it’s all taxed at the same rate. In principle buying additional years could be permitted; the current ludicrously cheap cost would need to increase though. Doesn’t £700 odd get you > 30% return per year, for ever, at the moment?
Last edited by: VxFan on Wed 31 Oct 18 at 12:23
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>>Everyone on here should pay lower income tax which must be good news for all
Not necessarily, depends what your priorities are. If wanting more money in your own pocket then yes.
Last edited by: Bobby on Mon 29 Oct 18 at 22:28
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What doesn't stack up is tax cuts and increased spending.... I am all for increases spending especially for the NHS. And the double counting for mental health is poor form and bordering on deception IMO.
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Not sure there is double counting. The BBC says
Confirmation of an extra £20.5bn for the NHS over the next five years
A minimum extra £2bn a year for mental health services
...which is how I remember it being spelt out.
If there are more people working then the tax take could go up even though individually it reduces. There are also other taxation changes which will bring in ner revenue.
(And I got the impression that there is money currently going to the EU which can be diverted here.)
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>> (And I got the impression that there is money currently going to the EU which can be diverted here.)
You're forgetting if there's a deal then we continue paying during the transition period and owe them an extra 39bn euros too. Where did he account for that €39bn divorce bill?
Last edited by: rtj70 on Mon 29 Oct 18 at 23:43
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He definitely said something about once BREXIT is complete it should free up a pot of contingency money he is holding on to. I've no idea what it's worth.
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And we all know Brexit is going to plan and his contingency is not needed. We'll have lots of trade deals soon.
I assume you don't really believe it is going well and any contingency if there is any is available. He's already said there will be another Budget if there is no deal.
Last edited by: rtj70 on Tue 30 Oct 18 at 00:33
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I've been reluctant to post on Brexit as I regret the bile it has given rise to on this forum.
This opinion on the Budget is from a Brexit supporting group - Global Britain.
Bear that in mind before clicking on the link as you may, in the words of so many TV preambles these days " find the content upsetting" !!!
globalbritain.co.uk/a-budget-that-shows-project-fear-is-a-lie/
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Entirely ignoring the Brexit comments at the beginning and dropping down to his summary bullet points at the end; [selectively quoted]
>>Today’s budget was politically quite clever.
I think so. It remans to be seen whether or not it has the desired impact, but very clearly it was about delivering messages.
>>Reductions in business rates, for small outlets, are material but will probably only slow the inevitable decline of the High Street.
I wonder. It was said that supermarkets would destroy butchers and bakers, and in fact they went into massive decline. But in the last 10 - 15 years, certainly around my area, they have staged quite the comeback as people have started to enjoy them and value the quality and the conversation.
I do wonder if the high street might not see the same thing or similar. Although hopefully not take so long about it.
Perhaps we'll see a change in their character and the removal/failure of the large national companies and a resurgence in the smaller, more bespoke or quality provider.
If that is to have any chance at all, then every reduction to the high street is important, though it needs to be targeted.
>>Real wage growth is growing strongly and this should continue in 2020 and 2021.
I hope so, but I am not so sure. Too much is up in the air to know.
Other than that, a little optimistic on GBP growths I think. Certainly as an average over the next 5 years.
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>>Real wage growth is growing strongly and this should continue in 2020 and 2021.
With govt growth figures around 1.5% and RPI higher than that....
Last edited by: Lygonos on Tue 30 Oct 18 at 21:51
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Budget updates - sooty123
