www.bbc.co.uk/news/business-55765868
Pretty important one this year, seems fairly settled that many, if not all, of the support measures will stay. Only thing up in the air is how quickly and when will taxes rise?
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I predict Capital Gains Tax and dividend tax will both be aligned with income tax, with the nil rate band for the latter disappearing completely (it's been reduced in recent years, so the direction of travel is clear)
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My guesses...
Pension savings relief capped to the lower rate of tax (currently 20%). Has been a regular feature in the papers.
Would be very unpopular though. I hope they don't.
Tax free allowances will remain at £12.5k and the higher rate will stay at £50k.
Vehicle excise duty increases for petrol and diesel vehicles only.
Return to interest taxed at source?
Company car drivers to be hit by an increase in BIK rates for petrol and diesel vehicles (effectively a hidden tax).
IPT to increase by 1%.
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Looks like the Universal Credit uplift stays for at least another 6 months. I wonder if, on a vote, there's the support to make it permanent?
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>> Looks like the Universal Credit uplift stays for at least another 6 months. I wonder
>> if, on a vote, there's the support to make it permanent?
>>
Good. I was horrified to discover how low universal credit was when someone I know lost their job in the autumn.
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Reduce ISA allowance from 20 grand (40 grand for a couple).
I'd rather they didn't but it's not exactly benefitting Joe and Joanne Bloggs.
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>> Looks like the Universal Credit uplift stays for at least another 6 months. I wonder
>> if, on a vote, there's the support to make it permanent?
Bromp, is that sufficient / a good thing / acceptable?
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>> Bromp, is that sufficient / a good thing / acceptable?
It increases the amount Universal Credit says an adult over 25 needs to live on for a month from £322/month to £410. The couple rate is also increased by around £90/month to £594.
Looking at the single person rate it's now equivalent per week to Statutory Sick Pay; it was publicity over the UC/SSP comparison that pushed the government to implement the uplift 12 months ago.
I suspect that when responsibility for sick pay was moved from the DHSS to employers in the early eighties as SSP the weekly rates for sick pay and Job Seekers were, if not the same, then very close. Freezes on 'benefits' applied at various times when they were politically or economically expedient led to a 'driftdown' in benefit rates compared to SSP which was linked to an inflation index.
TLDR: the uplift raises benefits (but only UC and Working Tax Credits) to a level that's at least a bit nearer realistic living costs.
Last edited by: Bromptonaut on Tue 2 Mar 21 at 22:17
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Usually council tax is paid up to the equivalent of a band "C" property.
I think it would be very difficult to live on £322 a month and so the uplift seems reasonably.
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More bits and bobs out today suggest the job support program will be extended until September.
I think they'll be hints of taxes rises and a few modest ones but nothing dramatic for another year or two.
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>> Usually council tax is paid up to the equivalent of a band "C" property.
Under changes dating back to the coalition every Council sets its own reduction scheme. Initially they were funded so that, as before, people reliant on income related benefits for joblessness, ill health etc got a 100% reduction. Over the years that has reduced and most councils restrict it by limiting the payment to (say) band C or only paying a percentage. While most cluster around the 70/80% range the stingiest I have seen is a council in Lincolnshire who only cover 55%.
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stingiest I have seen is a
>> council in Lincolnshire who only cover 55%.
County or district?
www.bbc.co.uk/news/business-53319433
Seems one of the things still up in the air is stamp duty. This always strikes me as a pretty controversial tax, although looking at the article it's lower than Scotland and Wales. Although it's at a higher rate, is it as controversial as it is in England?
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ISAs may not help all but money invested in them makes money available to industry and thus helps the economy.
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>>ISAs may not help all but money invested in them makes money available to industry and thus helps the economy.
The 0.5-1% stamp duty buying/selling shares maybe.
The majority buys shares already in the market so doesn't really help business.
(Unless you mean cash ISAs which are fairly pointless right now)
The £XX,XXX annual dividends & growth I get tax free is nice to have though.
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>> ISAs may not help all but money invested in them makes money available to industry
>> and thus helps the economy.
Not as much as the economy would be helped if money went to people who would spend it rather than as tax breaks for investors.
Reminds me though I need to use my ISA allowance for 20/21 and look properly at investing the Cash ISA I panic bought last year to use my allowance but when long term decisions were 'brave' with the pandemic pummelling markets.
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Not as much as the economy would be helped if money went to people who
>> would spend it rather than as tax breaks for investors.
Who do you mean?
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>> Who do you mean?
I didn't mean any particular group. It's a general economic theory around since The New Deal and possibly before that. Money in the hands of people who need stuff and will spend it is more of a stimulus to the economy than breaks for the already well off who will simply bank it.
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>>Money in the hands of people who need stuff and will spend it is more of a stimulus to the economy than breaks for the already well off who will simply bank it.
The principle is sound. In practice it is somewhat more complex than that, and far less easy to target than one might think. Still, the economy will adjust to either approach and become stable, unless it is repeatedly dicked around with.
Unfortunately what really causes the problems are the elections. For the two years before an election a Government will do things which have no fall out for two years. The first two years of any Government are picking up the fall out from the last 2 years of the previous Government. And repeat.
Essentially that usually means that Labour shaft the economy and the Conservatives shaft the services/welfare.
It is yet another reason I dislike party politics; the change between two Governments is initially large and then tainted by the length of their term, and then perverted by the upcoming election.
PR. It's the way forward. Less powerful Governments, more local representation, more minority representation etc. etc. [I actually a dream of an intelligent and benevolent dictatorship, but I could live with PR].
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>> [I actually a dream of an intelligent and benevolent dictatorship, but I could live with PR]
Ah, but one where you are not the BD?
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Well if it is an IBD then I wouldn't need to be.
But absolutely any of the clowns we have in Westminster these days should be denied access and shot if they protest.
I think the IBD needs to be firm, committed, able and, above all else, willing to employ snipers.
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>> >> Who do you mean?
>>
>> I didn't mean any particular group. It's a general economic theory around since The New
>> Deal and possibly before that. Money in the hands of people who need stuff and
>> will spend it is more of a stimulus to the economy than breaks for the
>> already well off who will simply bank it.
>>
I sort of see what your mean and I could see it working but pretty hard to set up tax/spend to identify them.
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>> Who do you mean?
>>
Me.
Once you get old, have paid off the mortgage, reasonably solvent, in decent health and have still got your marbles then monies for spending.
Better than saving it to spend later on nursing home fees
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>> stingiest I have seen is a
>> >> council in Lincolnshire who only cover 55%.
>>
>> County or district?
Unitary. It was either North Lincs or North East Lincs.
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>> It increases the amount Universal Credit says an adult over 25 needs to live on for a month
>> from £322/month to £410. The couple rate is also increased by around £90/month to £594.
>>.................
Thanks.
Surely even £410/£594 is not sufficient for a month? And even if it were, surely not uniformly across the country?
Last edited by: No FM2R on Wed 3 Mar 21 at 14:05
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>> Surely even £410/£594 is not sufficient for a month? And even if it were, surely
>> not uniformly across the country?
To be clear that's living expenses for singles/couples. There's extra for children (but limited to two where 3rd/subsequent born post 2017) severe ill health. Rent is a separate component but limited by 'bedroom tax' in social housing and a ceiling around 30th centile market letting rates in private rentals.
Take £420, deduct £20 a week for leccy/gas, £20 month for internet - arguably required for job searching, and then a contribution to Council Tax and there's not much left for food, clothing etc.
The only concession to more expensive areas of the country is that the cap (max amount payable form benefits) is higher in London Boroughs. As I pointed out a couple of weeks ago the cap would limit what's payable here for a private renter with 2 teenage children to less than they notionally need to live on.
Last edited by: Bromptonaut on Wed 3 Mar 21 at 15:14
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Are there any stats, or do you have any opinions, on the reasons people are unemployed?
How many unable, how many genuinely searching, how many just idle gits etc. etc.
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>> How many unable, how many genuinely searching, how many just idle gits etc. etc.
There are a number of different measures of unemployment of which the claimant count is only one. It's also true to say that of those claiming Universal Credit with no work (as opposed to topping up low wages) a very significant proportion are not required to seek work. This may be down to ill health, caring for a disabled relative or friend or being a parent of very young (under 3 now, was 5 in 'legacy' benefits) children.
I'll think about the 'idle git' count. It's not just a binary strivers/skivers thing though.
Covid has of course been a game changer on this.
Last edited by: Bromptonaut on Wed 3 Mar 21 at 16:30
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>>"idle git" count.
I know there are people that take the Michael. Will never work or will work for cash and claim.
There are also people who are deserving of all the help that they can get. No doubt there are people in the middle.
I do wonder if the people who decide on the benefit rates think that all claimants fall in to the former category and therefore set the rates harshly.
I also wonder if a universal basic income would be the right way to go.
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We already have a sort of universal basic income, but it goes under different names - universal credit and state pension mostly.
Universal income will not make those who currently abuse the system suddenly contribute to society.
The real issue is how the GDP cake is shared - give more to those at the bottom of the economic pyramid and those higher up have less to spend.
Perhaps the right strategy is that which maximises GDP - makes the cake bigger!!
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I watched it live but haven't read anything yet but the way he was dealing with increasing corporation tax sounded sensible - first I like that companies are sharing some of the "pain" and second it seemed that quite some thought had been given to make sure it only affected established and successful businesses.
Shame they can't squeeze a bit more out of some though, especially those who have done rather well out of the pandemic (e.g. Amazon)
And I'm not sure about freeports yet but it's an interesting experiment at least.
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And I'm not sure about freeports yet but it's an interesting experiment at least.
>>
I don't think that they are anything new in the UK, there's been a few over the years.
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>> Perhaps the right strategy is that which maximises GDP - makes the cake bigger!!
The problem is the sharing of wealth which is generated by society as a whole - however big the "surplus", it is owned by the capitalist. That is the fundamental model and without either state intervention or philanthropy the labourer is always going to be kept at subsistence level.
The quantity isn't the problem.
The idea that the "wealth generators" morally own their wealth is fatuous anyway. The people who do the work and buy the products are all part of the system.
Never mind sustainability. The species will die when we have worked all the mines out or poisoned all the air and water. Capitalism and markets are undoubtedly the best way to do that.
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"Never mind sustainability. The species will die when we have worked all the mines out or poisoned all the air and water. Capitalism and markets are undoubtedly the best way to do that."
As a species one of our innate characteristics is the desire to own stuff. in our hunter gatherer days that meant the wherewithal to survive. A supply of food, a stone axe, the means to make fire, perhaps a cooking pot.
We still have that desire and much like the innated desire for eating food whenever ti is available it is now wolking agains us. We are driven by the desire to own things, to acquire more and more even though we dont really need all the stuff.
Ever increasin GDP is clearly not the answer and logicaly we know it is not possible but I fear that human nature will always push us down that route.
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Contactless card payments now up to £100. They were open enough to fraud before but now I think I will revert to a normal contact card.
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Even at £45 they were open to fraud - I don't think increasing the limit to £100 will materially change that. What would be a good idea would be to:
- allow individual card holders to set their own lower limit (zero if they want)
- inhibit mulitple transactions in a short timescale - eg: more than 5 in an hour
- allow card holders to set a total daily aggregate spend
- clarify whether the bank or individual is responsible for fraudulent use
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>> Contactless card payments now up to £100. They were open enough to fraud before
Nope, less than credit card fraud actually and certainly less than online fraud.
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Are they going to put a few bonded warehouses noses out of joint due to loss of business.
I worked closely with a bonded warehouse a number of years ago. The owners reported a huge fraud to HMRC perpetrated by some of their customers. (HGV would arrive to take goods to another EU country. Duty wasn't payable. HGV would be back an hour or two later having apparently gone to Spain or Italy.)
HMRC acted like total dicks and arrested and prosecuted the owner of the bonded warehouse who had literally just given them a list of all of the dodgy movements made by customers and blamed them for something that was not in their control.
They were totally exonerated.
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Budget 2021 - The Melting Snowman
