So what are peoples thoughts and any potential impact on yourself

[Spectric]

Well it has been delivered and so what are people thinking of this budget. What about the pension pot grab, you either spend it or stash it but if you leave any in your estate then 40% will be stolen by the treasury so not a great incentive for people to have large pension pots. Also all of those who employ people will now have to pay them more and pay more business national insurance so making it tougher for businesses and again taking away some of the incentive for startup's.

 

[Rhossydd]

What about the pension pot grab, you either spend it or stash it but if you leave any in your estate then 40% will be stolen by the treasury

WTF are you on about, it's not 'stolen'.
Let's be clear; When you put money into a pension scheme you get tax relief, firstly on the input payments and on interest earned throughout it's life.
At retirement you can get 25% of the total accrued back tax free. Is that fair ?
You can then either buy an annuity to provide income or leave it to take as required as drawdown. That's taxable income.
Until this budget, if there's a surplus on your death it becomes part of your estate that's tax free, is that fair ?
From now on that might be subject to inheritance tax dependant on the size of your estate.

The change is just a way to get (very rich) people to stop using pension pots as tax avoidance tools. Use them for retirement income, which is what they're meant to be, and nothing changes.

 

[Blackswanwood]

WTF are you on about, it's not 'stolen'.
Let's be clear; When you put money into a pension scheme you get tax relief, firstly on the input payments and on interest earned throughout it's life.
At retirement you can get 25% of the total accrued back tax free. Is that fair ?
You can then either buy an annuity to provide income or leave it to take as required as drawdown. That's taxable income.
Until this budget, if there's a surplus on your death it becomes part of your estate that's tax free, is that fair ?
From now on that might be subject to inheritance tax dependant on the size of your estate.

The change is just a way to get (very rich) people to stop using pension pots as tax avoidance tools. Use them for retirement income, which is what they're meant to be, and nothing changes.

Spot on.

 

[RobinBHM]

It is a realistic budget that is necessary.

£22b increase in day to day spending on NHS, sounds good to me given the massive backlog.

Anybody on here that is a pensioner would probably want to see waiting times come down

 

[ajs]

This thread has all the hallmarks of becoming a political cesspool but after watching it live my thoughts were the Employer NI hike was a good deal bigger than expected, both in headline rate and threshold. Your pub landlord will be on the hook for NI for that barmaid which does a couple of 4 hour shifts now.

Some of the hikes that had been speculated haven't materialised, e.g. fuel duty and the freeze of uplift to tax allowances.

The other sin taxes, well tobacco basically went up as planned, draught beer down a penny which you won't see in reality. In practice I suspect the permanent business rate relief for retail and hospitality will be more significant down the pub, although I haven't read the red book it sounded that is across the board as opposed to a cap for the company which would help promote small independent businesses as opposed to national chains.

 

[Rhossydd]

the Employer NI hike was a good deal bigger than expected, both in headline rate and threshold. Your pub landlord will be on the hook for NI for that barmaid which does a couple of 4 hour shifts now.

That's a great example and why this lower limit will get a kicking once people realise the full impact of it. The four employee issue will further complicate this.

I was surprised that the leak of lowering the limit of tax free lumps sums from pension schemes didn't get implemented. Similarly ISAs weren't touched either.
No increase in VED is odd.
Strange no mention of their way out of funding the prison crisis either.
Also surprised that the forthcoming changes in duty on wine hasn't been dropped after the vociferous lobbying from the importers.

 

[Hypnotic Chimera]

That's a great example and why this lower limit will get a kicking once people realise the full impact of it. The four employee issue will further complicate this.

I was surprised that the leak of lowering the limit of tax free lumps sums from pension schemes didn't get implemented. Similarly ISAs weren't touched either.
No increase in VED is odd.
Strange no mention of their way out of funding the prison crisis either.
Also surprised that the forthcoming changes in duty on wine hasn't been dropped after the vociferous lobbying from the importers.

Employment allowance will be increased from £5,000 to £10,500, reducing national insurance for smaller businesses.

 

[woodieallen]

....
No increase in VED is odd.
...

That's because they're going to implement pay-per-mile instead. You wait.

 

[Vulcan]

That's because they're going to implement pay-per-mile instead. You wait.

“In an official statement, a Government spokesperson said: “We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
https://www.topgear.com/car-news/bu...onfirms-it-has-no-plans-pay-mile-road-pricing

 

[Jake]

my thoughts were the Employer NI hike was a good deal bigger than expected, both in headline rate and threshold.

My perception of expectations was that the whole 2% unfunded cut the Tories made in April was expected to be reversed, so the headline rate change clawing back 1.2% instead was smaller than I expected. Threshold reduction was not on my radar but neither was the increase in the employer's allowance, which will balance it a bit for smaller businesses.

 

[niemeyjt]

Well if a few more people become tax payers here instead of the UK, who knows, my taxes may go down.

 

[AJB Temple]

A business that I am close to thinks it is much worse for them as employers than they expected. Contingency plans were in place but will now be ramped up unfortunately. The result will be to close a warehouse in Kent (lease break is close) and make the workers redundant, and close a peripheral business near Manchester by letting it fold, making close to 30 staff redundant on statutory terms straight away. Recruitment freeze, trainee scheme cancelled. Still being mulled over but they will take action that stops overall payroll gross cost from going up.

 

[Phil Pascoe]

“In an official statement, a Government spokesperson said: “We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
https://www.topgear.com/car-news/bu...onfirms-it-has-no-plans-pay-mile-road-pricing

That was then.

 

[Phil Pascoe]

A penny off draght beer. Why on earth do they do stupid things like this? It costs to do it and is of no benefit even if it actually happens - 20p or 30p off might make a difference, but a penny? Why???

 

[Spectric]

This thread has all the hallmarks of becoming a political cesspool

It is about the budget, the fact it is a labour budget has nothing to do with it so let's just stay on track and talk financial and it's impact on us then the thread can run and no one will need a holiday !

WTF are you on about, it's not 'stolen'.
Let's be clear; When you put money into a pension scheme you get tax relief, firstly on the input payments and on interest earned throughout it's life.
At retirement you can get 25% of the total accrued back tax free. Is that fair ?
You can then either buy an annuity to provide income or leave it to take as required as drawdown. That's taxable income.
Until this budget, if there's a surplus on your death it becomes part of your estate that's tax free, is that fair ?
From now on that might be subject to inheritance tax dependant on the size of your estate.

You tell that to many relatives when their loved one passes on and they now have to pay 40% . Until now the pension has not been included in inheritance tax calculations and for many they have not had to pay anything but now think of adding a pension pot into the sums and you fall into having to pay. I believe it is around £300K before you pay 40% so not hard to exceed when you think of property values in many areas so as I said spend it or stash it.

 

[Billy_wizz]

“In an official statement, a Government spokesperson said: “We have no plans to introduce road pricing. We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
https://www.topgear.com/car-news/bu...onfirms-it-has-no-plans-pay-mile-road-pricing

So it's coming very soon but will be given a different name lol

 

[Phil Pascoe]

I believe it is around £300K before you pay 40% so not hard to exceed when you think of property values in many areas so as I said spend it or stash it.

In one of the poorest areas of Cornwall £300,000 is a small two bed bungalow.

 

[Rhossydd]

I believe it is around £300K before you pay 40% so not hard to exceed when you think of property values in many areas so as I said spend it or stash it.

Go and look it up and stop making stuff up.
Dependant on circumstance (married or single) inheritors might not have to pay anything on up to £1m estates.
https://www.moneysavingexpert.com/family/inheritance-tax-planning-iht/
"meaning together a couple can currently leave £1 million tax-free (2 x £325,000 tax-free allowances + 2 x £175,000 main residence allowances)."

 

[Chris152]

I believe it is around £300K before you pay 40% so not hard to exceed when you think of property values in many areas so as I said spend it or stash it.

Rhossydd beat me to it. £1million including a home is the no-tax norm for a couple leaving their estate.

 

[deema]

The change in the tax on pension funds will affect everyone including those who think it’s a good change. Many people have banked on the 25% cash free sum to for instance pay off their mortgage and enable them to have a reasonable retirement. The change, along with preventing any surplus in the pension to be passed onto the next generation tax free will further de-incentives people to pay into a pension fund. All that happens as a consequence is that government financial support for pensioners will increase, the amount of money that’s pension scheme’s invest in the stock exchange will reduce (restricting business growth) and people will become more reliant on the state and have to work longer as they cannot afford to retire. Won’t affect the wealthy, it will hit primarily the ‘working class’. Absolutely brilliant!

Labour under Blair raided the pension funds and put an effective stop on final salary schemes which had a massive negative affect again on the working class, this is just history repeating itself. It’s really a a home goal for all those traditional labour supporters. The wealthy will simply off shore their pensions and move to a better weather tax haven, just an added incentive to move where your domincile. It won’t affect the really wealthy, the change will only ever affect the middle and working classes.

It will be Interesting to see what happens in the NHS. A massive number of consultants and senior staff when the pension fund limit was dropped to (I think £1.25 million) retired early as the way their pensions are calculated meant they were effectively reducing their pension every day they worked. That led to the reversal of the pension fund limit a complete home goal for the Tories who continued a policy brought in originally by our good old friend Gordon Brown under Labour. So, the latest change will mean that the top consultants will effectively be working for free if they don’t retire early and take their tax free lump sump befire the window closes. Absolutely brilliant! At a time we need every doctor the good old Labour introduce a policy that is almost guaranteed to create a big exit of the most experienced people in the NHS…..wonder how long it will be before they do a U-turn…..but the damage will be done by then.