Preventive action ahead of the budget

hallmark

I've thought all along and still do that there is going to be a dramatic increase in council tax.  Unfortunately for most people there's no way to mitigate or minimise that (which is precisely why I think it'll happen).

subjecttocontract

VXman said:

subjecttocontract said:

Well the fuel duty one is hardly worth worrying about, 5p or 10p a litre extra might save you £5 by topping up the day before but I'll probably be doing something far more important than that.

I've stocked up on alcoholic drinks so we can at least get drunk and make the pain go away for a few hours.

I've ordered 50 petrol cans - will fill those up gradually until October. 

Can't work out if this is genuine or a wind up.......😁😁 You have got to be joking.
50 X 5 litres = 250 
250 litres X £0.10p (potential saving) = £25 which is less than the cost of the petrol cans !

Reaper

My guess is that LISAs will be axed. Existing ones will convert into ISAs with no further government handouts.
They always seemed a bit mad to me, effectively using taxpayers money to boost house prices.

ForumUser7

Reaper said:

My guess is that LISAs will be axed. Existing ones will convert into ISAs with no further government handouts.
They always seemed a bit mad to me, effectively using taxpayers money to boost house prices.

Would they have to give notice of this? Thinking if worth securing the bonus now in case - but would be a bit of a gamble to do in advance of any announcement. But if I wait until after, they may already have withdrawn the bonus

gravel_2

CGT bump closer to income tax + periodic deemed disposal.

Albermarle

TheBanker said:

Albermarle said:

clive0510 said:

BCE1200 said:

One question that I see over 55s discussing is whether to grab the 25% tax free pension amount before October.

I don't think that hitting SalSac would raise as much tax as expected, owing to behavioural effects.  

with reference to the 25% question, if I was to draw that from my pension in the hope of avoiding the taxman, where would be the best place to put that money? all ready maxed out on isa allowance. 

The likelihood of the 25% tax free being removed must be extremely low.

So taking steps to avoid something that will most likely never happen woukd not be sensible.

Personally, I think they might decide the 25% is overly generous and want to make changes. But I think this will be a longer-term change. They will recognise that people will have built plans around the 25% (e.g. paying off mortgages), so they might need to introduce some form of protected rights or phasing in. This means it could raise more tax over the longer term, but won't help with the short term defecit.

I think the Annual Allowance is likely to be cut for 2025/6, and we might see a return of a modified Lifetime Allowance.

I also think ISA subscription limits are likely to see a reduction. I think we will get formal confirmation (if we haven't already?) that the Great British ISA is not going to go ahead, but I wonder if they will try to do something to incentivise S&S ISA holders and SIPP holders to invest more in British companies?

And there will be the usual increases to fuel/alcohol/tobacco duty, road tax, the cost of passports etc. 

I'd like to see them look at the £100k tax trap, having fallen for this myself once. I suspect it could be revenue neutral or even positive, given I do everything I can to keep my taxable income below £100k, including buying extra annual leave. If I didn't lose my personal allowance at £100k I would probably pay more tax overall as I'd be paying 40% tax + 2% NI on the income instead of finding ways to make it disappear. 

Without the 25% tax free, or a reduced amount, pension saving for a 20% taxpayer becomes more unattractive.
So maybe a <5% benefit for tying your money up for decades. Pension saving has been encouraged by governments of all stripes and this one has also made positive noises along those lines, so would be a very retrograde step.
Capping the total amount of tax free cash possible at a lower figure than now, is possible though.

gravel_2

Albermarle said:

TheBanker said:

Albermarle said:

clive0510 said:

BCE1200 said:

One question that I see over 55s discussing is whether to grab the 25% tax free pension amount before October.

I don't think that hitting SalSac would raise as much tax as expected, owing to behavioural effects.  

with reference to the 25% question, if I was to draw that from my pension in the hope of avoiding the taxman, where would be the best place to put that money? all ready maxed out on isa allowance. 

The likelihood of the 25% tax free being removed must be extremely low.

So taking steps to avoid something that will most likely never happen woukd not be sensible.

Personally, I think they might decide the 25% is overly generous and want to make changes. But I think this will be a longer-term change. They will recognise that people will have built plans around the 25% (e.g. paying off mortgages), so they might need to introduce some form of protected rights or phasing in. This means it could raise more tax over the longer term, but won't help with the short term defecit.

I think the Annual Allowance is likely to be cut for 2025/6, and we might see a return of a modified Lifetime Allowance.

I also think ISA subscription limits are likely to see a reduction. I think we will get formal confirmation (if we haven't already?) that the Great British ISA is not going to go ahead, but I wonder if they will try to do something to incentivise S&S ISA holders and SIPP holders to invest more in British companies?

And there will be the usual increases to fuel/alcohol/tobacco duty, road tax, the cost of passports etc. 

I'd like to see them look at the £100k tax trap, having fallen for this myself once. I suspect it could be revenue neutral or even positive, given I do everything I can to keep my taxable income below £100k, including buying extra annual leave. If I didn't lose my personal allowance at £100k I would probably pay more tax overall as I'd be paying 40% tax + 2% NI on the income instead of finding ways to make it disappear. 

Without the 25% tax free, or a reduced amount, pension saving for a 20% taxpayer becomes more unattractive.
So maybe a <5% benefit for tying your money up for decades. Pension saving has been encouraged by governments of all stripes and this one has also made positive noises along those lines, so would be a very retrograde step.
Capping the total amount of tax free cash possible at a lower figure than now, is possible though.

Matter of perspective. This is only really true of additional subscriptions which I would hazard the average person (especially a basic rate tax payer) does not do. The main benefit to most people is tax relief now PLUS employer contribution. Any detrimental change at the top end of pensions could be justified to the electorate depending on the focus. They could make pensions worse for the more wealthy/clued up but set this off for the majority of voters by forcing (or subsidising) increased employer matching. This potentially drives more money into the unwrapped retail market, generating tax, while at the same time improving the pension position of the average Joe.

Not advocating it but worth remembering not everyone is as fortunate as those who can make the current pension system work in their favour.

Albermarle

gravel_2 said:

Albermarle said:

TheBanker said:

Albermarle said:

clive0510 said:

BCE1200 said:

One question that I see over 55s discussing is whether to grab the 25% tax free pension amount before October.

I don't think that hitting SalSac would raise as much tax as expected, owing to behavioural effects.  

with reference to the 25% question, if I was to draw that from my pension in the hope of avoiding the taxman, where would be the best place to put that money? all ready maxed out on isa allowance. 

The likelihood of the 25% tax free being removed must be extremely low.

So taking steps to avoid something that will most likely never happen woukd not be sensible.

Personally, I think they might decide the 25% is overly generous and want to make changes. But I think this will be a longer-term change. They will recognise that people will have built plans around the 25% (e.g. paying off mortgages), so they might need to introduce some form of protected rights or phasing in. This means it could raise more tax over the longer term, but won't help with the short term defecit.

I think the Annual Allowance is likely to be cut for 2025/6, and we might see a return of a modified Lifetime Allowance.

I also think ISA subscription limits are likely to see a reduction. I think we will get formal confirmation (if we haven't already?) that the Great British ISA is not going to go ahead, but I wonder if they will try to do something to incentivise S&S ISA holders and SIPP holders to invest more in British companies?

And there will be the usual increases to fuel/alcohol/tobacco duty, road tax, the cost of passports etc. 

I'd like to see them look at the £100k tax trap, having fallen for this myself once. I suspect it could be revenue neutral or even positive, given I do everything I can to keep my taxable income below £100k, including buying extra annual leave. If I didn't lose my personal allowance at £100k I would probably pay more tax overall as I'd be paying 40% tax + 2% NI on the income instead of finding ways to make it disappear. 

Without the 25% tax free, or a reduced amount, pension saving for a 20% taxpayer becomes more unattractive.
So maybe a <5% benefit for tying your money up for decades. Pension saving has been encouraged by governments of all stripes and this one has also made positive noises along those lines, so would be a very retrograde step.
Capping the total amount of tax free cash possible at a lower figure than now, is possible though.

Matter of perspective. This is only really true of additional subscriptions which I would hazard the average person (especially a basic rate tax payer) does not do. The main benefit to most people is tax relief now PLUS employer contribution. Any detrimental change at the top end of pensions could be justified to the electorate depending on the focus. They could make pensions worse for the more wealthy/clued up but set this off for the majority of voters by forcing (or subsidising) increased employer matching. This potentially drives more money into the unwrapped retail market, generating tax, while at the same time improving the pension position of the average Joe.

Not advocating it but worth remembering not everyone is as fortunate as those who can make the current pension system work in their favour.

On the other hand those not enjoying employer contributions, such as the self employed, are only engaged with pensions at a too low level already. They should be encouraged to be more involved but reducing the 25% tax free would work against that.
In any case it seems one of the less likely options.

flaneurs_lobster

subjecttocontract said:

VXman said:

subjecttocontract said:

Well the fuel duty one is hardly worth worrying about, 5p or 10p a litre extra might save you £5 by topping up the day before but I'll probably be doing something far more important than that.

I've stocked up on alcoholic drinks so we can at least get drunk and make the pain go away for a few hours.

I've ordered 50 petrol cans - will fill those up gradually until October. 

Can't work out if this is genuine or a wind up.......😁😁 You have got to be joking.
50 X 5 litres = 250 
250 litres X £0.10p (potential saving) = £25 which is less than the cost of the petrol cans !

If it's not a wind-up  then it's illegal - 30 litres is the limit to store at home without a licence (and you're not allowed to keep it in the bath).

masonic

ForumUser7 said:

Reaper said:

My guess is that LISAs will be axed. Existing ones will convert into ISAs with no further government handouts.
They always seemed a bit mad to me, effectively using taxpayers money to boost house prices.

Would they have to give notice of this? Thinking if worth securing the bonus now in case - but would be a bit of a gamble to do in advance of any announcement. But if I wait until after, they may already have withdrawn the bonus

You "secure the bonus" 6-8 weeks after making a deposit, but I can't imagine any money paid in before the budget would be excluded from receiving a bonus. If they become ISAs then there is no risk adding money now that you would have committed later in the year anyway.