Non-partisan mini-budget predictions thread

Bobziz

Extension of the oil company windfall tax seems to be nailed on too, although I'd guess it'll be small numbers in reality.

I'd also expect some detail on the energy cap for businesses from next Apr. 

dunstonh

westv said:

So no budget predictions so far then.

Basically, if you are on benefits then you are going to be fine.   
If you have any wealth, you are going to be stuffed.  
And God forbid if you are a business owner.   You are going to get crucified.  

 I would not be surprised to see either 1) the allowance to be removed entirely or 2) the rate to be harmonised with income tax. Dividends have been under attack since 2014 with an ever increasing ratchet on something that had been untaxed for basic rate taxpayers (if we ignore the silly notional credit thing)

The reason dividend tax is lower is because the earnings linked to it have already had corporation tax paid against them at 19%.   Next year CT rises to 19% on the first £50k, 26.5% on the next £200k and 25% thereafter.

If they tax dividends under income tax, that would mean company earnings being taxed at upto 26.5% + upto 45%.    Why would anyone want to own a company with that level of taxation?

MX5huggy

Additional rate threshold cut to £100k

EdSwippet

ColdIron said:

I fear this mini budget will be unkind to investors

I'm struggling to recall one within the past decade or so that wasn't.

sevenhills

dunstonh said:

The reason dividend tax is lower is because the earnings linked to it have already had corporation tax paid against them at 19%.   

There will surely be a lot of dividend revenue not linked to corporation tax?
Lots of instances of being taxes multiple times, my earnings are taxed PAYE and then I could pay again each time it moves. It would be taxed again if I bought a house, then taxed again if I made a profit on the house.
The government must tax when it's easiest.

wmb194

dunstonh said:

The reason dividend tax is lower is because the earnings linked to it have already had corporation tax paid against them at 19%. 

Plenty of countries around the world levy withholding taxes on dividends and they certainly don't care that they're paid after corporation tax. A dividend withholding tax on all shareholders could be a low hanging fruit governments of various colours have ignored for the longest time. IIRC the argument was always that it would put-off international investors but if they set it at a level many other countries do for double taxation - 15% is common - they might get away with it.

dunstonh

There will surely be a lot of dividend revenue not linked to corporation tax?

Dividends can only be paid out of profit or retained profit.  

Lots of instances of being taxes multiple times, my earnings are taxed PAYE and then I could pay again each time it moves. It would be taxed again if I bought a house, then taxed again if I made a profit on the house.
The government must tax when it's easiest.

There are, but you need to remember that dividends dont just apply to investors. They apply to company owners.  You can't hit one without hitting the other.   

Plenty of countries around the world levy withholding taxes on dividends and they certainly don't care that they're paid after corporation tax. A dividend withholding tax on all shareholders could be a low hanging fruit governments of various colours have ignored for the longest time. IIRC the argument was always that it would put-off international investors but if they set it at a level many other countries do for double taxation - 15% is common - they might get away with it.

The leaks to the media (possibly painting an intentionally worse picture so things wont actually be as bad as that) do indicate that small businesses are going to be the worst hit.  So, it is possible but it would be a massive hike to so many people and will create employment issues as companies look to save money to pay extra tax.
  

hallmark

I've run limited companies in the past, those where I was the only employee (essentially to allow me to contract in IT) and those where it was more like a "real" company with employees.

In both cases, especially the latter, the level of taxes and the admin overhead are far higher than anybody who's never done it would probably imagine. Far too complex, so much so that it seems like it's designed to put people off even trying. It's why I don't have a lot of time for people who've never tried it that refer to the people who have done so successfully as "lucky" or "greedy".

I did well out of both setups but it was so much faff that eventually I was happy to go back to being an employee. Slightly less money but infinitely less hassle.  I have a lot of respect for anybody who runs a small business.

isasmurf

hallmark said:

The mini-budget is due next Thursday. 

No, that was in September. Next week is the Autumn Statement. Im not sure why it is not the Budget, which was moved to the Autumn a few years ago. It means there will be no Budget in 2022.

Albermarle

hallmark said:

I've run limited companies in the past, those where I was the only employee (essentially to allow me to contract in IT) and those where it was more like a "real" company with employees.

In both cases, especially the latter, the level of taxes and the admin overhead are far higher than anybody who's never done it would probably imagine. Far too complex, so much so that it seems like it's designed to put people off even trying. It's why I don't have a lot of time for people who've never tried it that refer to the people who have done so successfully as "lucky" or "greedy".

I did well out of both setups but it was so much faff that eventually I was happy to go back to being an employee. Slightly less money but infinitely less hassle.  I have a lot of respect for anybody who runs a small business.

AIUI, this issue is not specific to UK,  and the bureaucracy/tax regime in many other countries is significantly worse