The Budget

theEnd

Graham_Devon wrote: »

Converting the grant for uni to a loan is likely to see 30-60% less students from the poorer end able to attend university.

That sounds like rubbish to me. The loan is more a graduate tax on higher incomes. Shouldn't stop anyone smart going.

cells

gagahouse wrote: »

I think in your example they would be able to claim 20% of the £400 as tax relief so £80 would be deducted from 1000 .

1000-80=920@40% tax = 368

1000-400-368= 232 in hand

400-232=168 per month less profit assuming no other expenses

that's a 42% loss, quite a hit for a higher rate taxpayer

this will have several effects

1) disincentivise owning >2 or 3 BTL
2) will drive the marginal profitability landlords out of the market, good for some FTB's
3) reduce supply and increase some rents in some areas

it goes some way to levelling the playing field with FTB's and will put a brake on the BTL share of overall mortgage market currently around 15% but growing fast

Someone already posted but....

Currently

£1000 Rent - £400 Interest = £600 Gross on which to pay income tax. Post income tax at 40% = £360 in your pocket

New

£1000 Rent - £400 Interest - £80 tax differential = £520 Gross on which you pay income tax. Post income tax at 40% = £312


So it goes from £360 to £312 in your pocket

theEnd

Graham_Devon wrote: »

And this just goes to show what's actually going on....

Currently...
Taylor Wimpey down 5.19%
Barratt Down 5.9%
Foxtons down 4.6%
Countrywide down 2.4%

Reaction from the non dom rules!!!

Potentially everything. It's not a house buying friendly budget (for the first time in a long, long time).

Non dom, BTL tax, Divd tax, lower benefits (inc HB).

michaels

Graham_Devon wrote: »

Sums are starting to come in now.

A single parent working school hours on minimum wage will gain £400 in extra income, but will lose £860 in tax credits.

The OBR state that the inheritance tax changes will lead to older people having less of a reason to downsize meaning overoccupation for the younger generations.

Converting the grant for uni to a loan is likely to see 30-60% less students from the poorer end able to attend university.

Is the reduction in the tax credits withdrawal threshold from 6420 to 3850 for all claimants or only new claimants like the restriction in the child tax credits to 2 kids?

vivatifosi

lostinrates wrote: »

I pretty much agree with this. I am less sure if what I gleaned from radio four on the disability allowance ( whatever we call it) was right, that new applicants also face changes. Unlike having many children, facing lifetime illness/ disability is not a choice, and it seems unjust that people falling ill / facing disability or claiming it after a certain date get less.

I agree. I've gone through the book for mentions of disabled and disability. This is what it says (please note, have edited these points so to take out points about non-disabled people:

1.144 From April 2016, the government will reduce the level of earnings at which a household’s tax credits and Universal Credit award starts to be withdrawn for every extra pound earned. In tax credits, this point (known as the income threshold) will be reduced
from £6,420 to £3,850. The equivalents in Universal Credit (work allowances) will be reduced to £4,764 for those without housing costs, £2,304 for those with housing costs, and removed altogether for non-disabled claimants without children.

1.148 ....The disabled child premia in tax credits and UC
will also continue to be paid to all children with a disability.

1.152 The government believes that those out of work should not receive more from benefits than many working families earn. (Goes on to talk about cap reducing) Exemptions will continue to apply for the most vulnerable disabled people. How is this defined?

2.102 Changes to tax credits income thresholds and Universal Credit work allowances... Work allowances in Universal Credit will be abolished for non-disabled childless claimants

2.103 Limit Child Element in tax credits and Universal Credit.... Furthermore, children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in tax credits and the equivalent in Universal Credit (this is restated in 2.107)

2.115 Benefits uprating – Most working-age benefits will be frozen for 4 years from April 2016....This excludes Statutory Sick Pay;
disability, carers and pensioners’ premia in the frozen benefits; the Employment and Support Allowance Support Group component; and other disability, carer and pensioner benefits, which will continue to be uprated in relation to prices or earnings as applicable.

2.116 Tax credits uprating – The uprating freeze will extend to the Child Tax Credit and Working Tax Credit (excluding disability elements). All disability elements will continue to be
uprated by prices each year.

Table B1: Benefits in scope of the Welfare Cap:
Attendance allowance, DLA, Incapacity Benefit, Industrial Injuries Benefits, PIP, Severe Disablement Allowance (cold weather and winter fuel also included if disabled qualify).

1.138 Statutory payments, including Maternity Allowance, Maternity Pay, Paternity Pay and Statutory Sick Pay will continue to be indexed by CPI. Disability benefits will also continue to be indexed by CPI, including Personal Independence Payment, Attendance Allowance, Disability Living Allowance and Employment and Support Allowance (Support Group).

1.160 Increasing employment levels amongst people with disabilities and health conditions are a key part of the government’s aim to achieve full employment. The current system creates a financial incentive to claim sickness benefits over Jobseeker’s Allowance. From April 2017, new claimants of Employment and Support Allowance (ESA) who are placed in the Work-Related Activity Group will therefore receive the same rate as those claiming
Jobseeker’s Allowance, alongside additional support to help them take steps back to work. This will ensure the right incentives and support are in place for those closer to the labour market to help them make this transition when they are ready, while maintaining the extra financial support ESA provides for those in the ESA Support Group who are furthest from work. Existing ESA claimants will be unaffected.

MFW_ASAP

Graham_Devon wrote: »

Sums are starting to come in now.

A single parent working school hours on minimum wage will gain £400 in extra income, but will lose £860 in tax credits.

The OBR state that the inheritance tax changes will lead to older people having less of a reason to downsize meaning overoccupation for the younger generations.

Converting the grant for uni to a loan is likely to see 30-60% less students from the poorer end able to attend university.

Not sure where you got the sums from as you didn't provide a reference, but as far as I'm concerned I'm happy that the single parent's employer is paying their wages rather then ourselves as the taxpayer.

Tax credits were Gordon Brown's attempt to put most of the country onto benefits in the hope that they would then have to vote Labour to keep them. Happily, the electorate have seen through the ruse and voted them all out.

Graham_Devon

michaels wrote: »

Is the reduction in the tax credits withdrawal threshold from 6420 to 3850 for all claimants or only new claimants like the restriction in the child tax credits to 2 kids?

All, as far as I can see.

Hence why the example earlier of the single mother working minimum wage in school hours loses £860 in tax credits, but gains £400 from the increase to the living wage.

I personally believe calling it a living wage instead of a rise to the minimum wage was a masterstroke. All the papers are now reporting it as their main item - "george osbourne introduces living wage".

However, as I wrote earlier, it's not that big a deal. I missed the point earlier that they had already planned to increase the minimum wage by 30p in 2016. So the "living wage" is an increase of just 40p above what the minimum wage would have been.

Simply genius to call it a living wage as it makes it sound so much more than it actually is. As I say, caught me out. I literally couldn't believe Osbourne was introducing a living wage. Now I realise it's pretty much all gloss and little substance.

lisyloo

so, is someone on 30k better or worse off? what about 50k or 100k?

If you're PAYE then a little better off - only the tax thresholds moving.
If you're a contractor paying yourself dividends then probably worse off.

Graham_Devon

MFW_ASAP wrote: »

Not sure where you got the sums from as you didn't provide a reference, but as far as I'm concerned I'm happy that the single parent's employer is paying their wages rather then ourselves as the taxpayer.

Tax credits were Gordon Brown's attempt to put most of the country onto benefits in the hope that they would then have to vote Labour to keep them. Happily, the electorate have seen through the ruse and voted them all out.

Oh don't get me wrong, I'd prefer employers to be paying wages over tax credits.

But whichever way you cut it, the single mother has lost out to the tune of £460.

That will hurt many across the country. Those it will hurt are not the idle. They are the ones doing what they can to earn a crust.

lostinrates

Graham_Devon wrote: »

Sums are starting to come in now.

A single parent working school hours on minimum wage will gain £400 in extra income, but will lose £860 in tax credits.

y.

Is there not more gain in the scope from living wage from minimum wage change?