General Discussion and Whimsical Banter

Eirambler

Expect the only change will be to ISAs and even then it will be more aimed at the stocks and shares side of it. Which is disappointing as helping savers is a proven non-inflationary measure, but preferable to this government of course to reduce inheritance tax, which will only favour the very wealthy as next to nobody is subject to it already.

masonic

Eirambler said:

Expect the only change will be to ISAs and even then it will be more aimed at the stocks and shares side of it. Which is disappointing as helping savers is a proven non-inflationary measure, but preferable to this government of course to reduce inheritance tax, which will only favour the very wealthy as next to nobody is subject to it already.

There may be loopholes associated with the ISA changes (if enacted), as it is going to be very difficult to target "British businesses". There are all sorts of investment companies listed on the London stock exchange, including money market ETFs. As always, the devil will be in the detail.

Beddie

Cutting IHT will be like removing the LTA last year - only helps the top 10%. I realise that covers many of the contributors to this forum, who are benefitting from these changes. So I don't expect much agreement when I suggest they should instead increase personal tax allowances and give them indexation in future, just like benefits and pensions get. This helps all taxpayers, not just those at the top.

Rudyson

Beddie said:

Cutting IHT will be like removing the LTA last year - only helps the top 10%. I realise that covers many of the contributors to this forum, who are benefitting from these changes. So I don't expect much agreement when I suggest they should instead increase personal tax allowances and give them indexation in future, just like benefits and pensions get. This helps all taxpayers, not just those at the top.

For what it's worth, you'll get agreement from me

gt94sss2

Beddie said:

Cutting IHT will be like removing the LTA last year - only helps the top 10%. I realise that covers many of the contributors to this forum, who are benefitting from these changes. So I don't expect much agreement when I suggest they should instead increase personal tax allowances and give them indexation in future, just like benefits and pensions get. This helps all taxpayers, not just those at the top.

I would argue cutting IHT is nothing like LTA. For instance, the vast majority of "normal houses" in London now exceed the IHT allowance. The 325k threshold hasn't changed since 2009.

Being more controversial, while I agree that personal tax allowances should be indexed, I would argue that perhaps the basic 12570 tax free allowance is too high. We need more citizens who pay into the tax system over their lifetime rather than being net recipients 

PS these conversations might be off topic for this thread/board

Eirambler

While I definitely have no problem with the principle of a broader tax cut, if it happens (and the soundings this morning are that it might) it's purely with an eye on the election because with the inflation situation still fairly precarious I doubt many economists would recommend that course of action just now. 

Obviously I'm massively biased here as I have not insubstantial savings at this point in time, but an increase to either the PSA or the annual ISA savings allowance would represent a tax cut that is proven to support the wider goal of reducing inflation. However I have zero faith in this government to do what is best for the country.

ircE

Some more fodder for thought ahead of Wednesday:

Which? round up of rumours

The Telegraph via Yahoo Finance: The Great British ISA

In terms of ISAs, we could be looking at: measures to encourage investment in UK listed companies... scrappage of the "only pay into one ISA per year" rule... simplification of the existing labyrinthine ISA ecosystem... possible changes to how (L)ISAs help first-time home-buyers...

I would hope that any tax cuts are focused on business investment measures rather than income taxes for now. I agree with @Eirambler in that I want to see an overall increase in personal income taxes (including NICs!) being paid by the general population but I don't think now is the time given where we are with interest rates and the state of the public finances. 

The idea of inheritance tax cuts at this time really sickens me, especially if paired with yet further cuts to the non-pension welfare budget.

ETA: And this from the Telegraph trails more in the NS&I space.

talexuser

gt94sss2 said:

 I would argue that perhaps the basic 12570 tax free allowance is too high. We need more citizens who pay into the tax system over their lifetime rather than being net recipients 

I think the original Beveridge philosophy was that everyone should pay something in to get something out. I agree that low tax maybe 5 or 10% should be at the very bottom of the scale, even if benefits in some circumstances have to give back more for the very poor. The supposed inefficiency of circulating money through the tax system might encourage more social cohesion - and less division if millions of voters at the bottom have no axe to grind in tax cut arguments because they don't pay. Our large step from 0 to 20 to 40 seems to me to be counter productive incentive wise, do other countries have more progresive policies? I suppose the trouble is we have become a low wage economy. 

pecunianonolet

The UK income tax system is very simple. 

Want a very progressive system nobody really understands than move to Germany. Below table for singles, if you are married it is very different again.

https://einkommensteuertabellen.finanz-tools.de/downloads/grundtabelle-2023.pdf

talexuser

I take your point !!!
But then Germany's standard of living  wouldn't be too bad either.