Government Help for Private Pensions?

MK62

When I heard Mr Sunak's "observation", my immediate reaction was that he was thinking about more than just NI equalisation - perhaps he also has dividend income in his sights for tax "equalisation". Perhaps he has plans to sort the IR35 mess out at the same time by using a "different approach"....

Whatever happens, this massive bailout will have to be paid for somehow.......tax rises are inevitable, at least imho.

Anonymous101

MK62 said:

When I heard Mr Sunak's "observation", my immediate reaction was that he was thinking about more than just NI equalisation - perhaps he also has dividend income in his sights for tax "equalisation". Perhaps he has plans to sort the IR35 mess out at the same time by using a "different approach"....

Whatever happens, this massive bailout will have to be paid for somehow.......tax rises are inevitable, at least imho.

From what I hear HMRC already had IR35 in its sights.
His "observation" was interesting... I tend to agree with him that avoiding paying PAYE level tax and NI on income through paying yourself in dividends has to come at some cost. However a method to equalise income tax across the board, which doesn't penalise investments, sounds incredibly complex to me. Be interested to hear other peoples thoughts on possible methods for this.

crv1963

Tories to follow the most socialist policies of any party in the countries history or JC lost the election but won the argument are two posts that have popped up on my FB feed this morning! 

dunstonh

Anonymous101 said:

MK62 said:

When I heard Mr Sunak's "observation", my immediate reaction was that he was thinking about more than just NI equalisation - perhaps he also has dividend income in his sights for tax "equalisation". Perhaps he has plans to sort the IR35 mess out at the same time by using a "different approach"....

Whatever happens, this massive bailout will have to be paid for somehow.......tax rises are inevitable, at least imho.

From what I hear HMRC already had IR35 in its sights.
His "observation" was interesting... I tend to agree with him that avoiding paying PAYE level tax and NI on income through paying yourself in dividends has to come at some cost. However a method to equalise income tax across the board, which doesn't penalise investments, sounds incredibly complex to me. Be interested to hear other peoples thoughts on possible methods for this.

It does come at cost.
1 - They are not self employed so don't get the package for self employed people
2 - They qualify under the employee scheme but as most will be on £719 pm salary, they can only get 80% of that.  Dividends do not go qualify.

Tories to follow the most socialist policies of any party in the countries history or JC lost the election but won the argument are two posts that have popped up on my FB feed this morning! 

I saw that too.  JC is deluded.   The Tories are doing this as a one off (until the next pandemic/financial crisis) and the debt caused will be paid by future generations forevermore.  JC wanted to spend this sort of amount as routine and not as an emergency.  Just think of the state we would be in if we had JC's spending AND the CV spending.

Anonymous101

dunstonh said:

It does come at cost.
1 - They are not self employed so don't get the package for self employed people
2 - They qualify under the employee scheme but as most will be on £719 pm salary, they can only get 80% of that.  Dividends do not go qualify.

Sorry - yes the cost now is fairly clear, but ordinarily its not. Its just seen as a way to pay less tax.
A little like investing in equities. There is a general understanding that what you might expect to gain in long term growth you take the risk on shorter term volatility. The current situation perhaps has shown paying yourself in dividends might be better from an annual tax perspective however you do sacrifice a safety net which being an employee brings.

crv1963

I agree dunstanh- the level of spending is a one off and would not be sustainable in the long term. I also think that the cost of it all will leave us all worse off in the longer term, but there will be consequences of decisions taken  The future generations will also be paying the debt off.

Possibly the opportunity for major changes to be driven through that would not under normal circumstances be politically possible and hopefully we will all be a little more altruistic. Though a hope over reality most probably- or my delusion.

Thrugelmir

Anonymous101 said:

MK62 said:

When I heard Mr Sunak's "observation", my immediate reaction was that he was thinking about more than just NI equalisation - perhaps he also has dividend income in his sights for tax "equalisation". Perhaps he has plans to sort the IR35 mess out at the same time by using a "different approach"....

Whatever happens, this massive bailout will have to be paid for somehow.......tax rises are inevitable, at least imho.

From what I hear HMRC already had IR35 in its sights.
His "observation" was interesting... I tend to agree with him that avoiding paying PAYE level tax and NI on income through paying yourself in dividends has to come at some cost. However a method to equalise income tax across the board, which doesn't penalise investments, sounds incredibly complex to me. Be interested to hear other peoples thoughts on possible methods for this.

Will be an opportunity for a major overhaul of the entire tax system. Not just personal but corporate. What constitutes self employment will be scrutinised closely. Society has to be equitable to all. 

Anonymous101

Thrugelmir said:

Will be an opportunity for a major overhaul of the entire tax system. Not just personal but corporate. What constitutes self employment will be scrutinised closely. Society has to be equitable to all. 

Yes - watch out for another exciting thread on the 40% tax relief on pensions being raided!

Thrugelmir

Anonymous101 said:

Thrugelmir said:

Will be an opportunity for a major overhaul of the entire tax system. Not just personal but corporate. What constitutes self employment will be scrutinised closely. Society has to be equitable to all. 

Yes - watch out for another exciting thread on the 40% tax relief on pensions being raided!

Often that's at the expense of paying down debt. As investments provide a better return. 
I had a conversation with somebody over 30 years ago. Who thought they had discovered the magic money tree using a pension mortgage. Unfortunately he had a high weighting to Japanese unit trusts............