Autumn Statement Predictions?

dealyboy

@2nd_time_buyer said:

A 1% cut in the basic income tax rate will probably cost less than unfreezing the rates. It is easy for people to understand, will have an immediate effect, and will generate headlines. They haven't talked about it much, which makes me think it is likely to happen.

That's what I was thinking, it would also benefit more the higher the income.

Comparing 1% off the basic rate and raising the starting threshold by £1,000, the break even point is around £32k annual pay, above better to have the cut, below better to have the higher threshold. The higher the pay the greater the benefit of a rate cut and the lower the income the greater benefit from an increase of the starting threshold.

I presume if there were a cut to the basic rate it would also mean less tax relief for pension contributions, so those with income below the personal tax allowance would be worse off.

njm123

My prediction is that whatever changes are made will be aimed at working families and getting the Tory core vote out.   Some tinkering with IHT is nailed on due to the misconception's people have about the tax.    

Not sure if he'll honour the Triple Lock or fiddle the Wages element again wrapped up as intergenerational fairness.

I wouldn't be at all surprised to see a cut to  income Tax or NI rates - most likely NI,  think if the thresholds alter it'll more likely be the higher rate one or as a "rabbit out the hat" add a new "Working families allowance" that is only available to those with Children under 18 who are employment.

That would allow the income tax/NI change to only benefit families - not pensioners or the economically inactive living off savings income.    They've already announced plans to target those on benefits and the economically inactive that aren't working due to illness and given politicians dislike of the economically inactive I suspect they'd like to discourage others from becoming inactive or at least delay the decision for a bit and making them relatively a bit worse off helps .

Silvertabby

QrizB said:

2nd_time_buyer said:

A 1% cut in the basic income tax rate will probably cost less than unfreezing the rates.

1% off the basic rate is a 5% reduction on the tax tackle on the BR band. It will cost about as much as raising the personal allowance by £1500.

Raising the personal allowance will disproportionately help pensioners, and old people vote.

An increase in the personal allowance would surely be easier (and therefore cheaper) to administer?  It would benefit most people - and it would stop the whines from certain members of the pensioner community who want bigger State pensions, but then express their shock and horror at the indignity of being 'dragged into paying tax'.

But, at the end of the day, you can't please all of the people all of the time.  Something like 40% of UK adults don't pay income tax.  Not one penny.  So any tax cuts, by whatever means, will undoubtably be met with screams of "but what about me?"

RogerPensionGuy

I feel this autumn statement and next spring budget will be driven on political points mostly. 

It currently appears to many that Labour will indeed form the next government and these two budget events will be purfect instruments for the Conservatives to hold as many seats as possible and by doing this will indeed make Labour's term very awkward indeed as to how they work to win the next election in 2028 or 2029.

This statement will be managed a lot better that last years for sure, it will be smooth with plenty of reasonable comments and views as to why it's the correct way to go.

It's worth remembering that all the negative comments and views about the LTA and AA changes this spring have by and large go away currently, I expect the will do something as radical as the LTA unlimited and AA up 50% this statement, it will be interesting watching it on Wednesday. 

Hoenir

hugheskevi said:

I was more referring to the political rather than fiscal consequences. Policies such as Inheritance Tax and 45% additional rate of income tax have very little fiscal importance, but a disproportionate political significance. I think it will be a Budget with as much focus on political games as fiscal changes. 

Further derating of the creditworthiness of the UK has to be avoided. Ultimately this pushes up borrowing costs. Budgets are about far more than the media grabbing headlines. Where all the attention is focussed.  

Thumbs_Up

Silvertabby said:

  - and it would stop the whines from certain members of the pensioner community who want bigger State pensions, but then express their shock and horror at the indignity of being 'dragged into paying tax'.

This is how a budget works by trying to balance the books, give with one hand, then takeaway with the other! Until you read the small print much later then realize they take more then they give! Twas ever thus.

sevenhills

westv said:

How can the election have been in 2025 when it has to be within or at 5 years of December 2019?

If an election is called on 17th December, the process to have an election will take roughly a month.

https://www.instituteforgovernment.org.uk/explainer/next-general-election

xylophone

and it would stop the whines from certain members of the pensioner community who want bigger State pensions, but then express their shock and horror at the indignity of being 'dragged into paying tax'.

£12,570 represents around £241 a week -  if I were a single pensioner having to survive solely on that amount of money (and it's  well above GPC level), I'd certainly feel hard done by if I had to pay tax!

Audaxer

Silvertabby said:

QrizB said:

2nd_time_buyer said:

A 1% cut in the basic income tax rate will probably cost less than unfreezing the rates.

1% off the basic rate is a 5% reduction on the tax tackle on the BR band. It will cost about as much as raising the personal allowance by £1500.

Raising the personal allowance will disproportionately help pensioners, and old people vote.

An increase in the personal allowance would surely be easier (and therefore cheaper) to administer?  It would benefit most people - and it would stop the whines from certain members of the pensioner community who want bigger State pensions, but then express their shock and horror at the indignity of being 'dragged into paying tax'.

But, at the end of the day, you can't please all of the people all of the time.  Something like 40% of UK adults don't pay income tax.  Not one penny.  So any tax cuts, by whatever means, will undoubtably be met with screams of "but what about me?"

Yes, I find it strange when I hear complaints about people being being dragged into paying tax, or dragged into the higher rate tax band. I personally would be very happy to have enough income to get into the higher rate tax band.

xylophone

 Something like 40% of UK adults don't pay income tax.  

Those filthy plutocrats on an income of under £242 a week?