Very good and thought provoking. Ideally my 'want' would be to use the budget to simplify the tax system and get rid of anomalies. Unfortunately that won't happen. The likes of the Mail and Torygraph would pick up on every change that adversely impacts their readership without giving credit for the areas that help those same people. I do hope Reeves significantly increases taxes on ownership of UK homes by foreign investors though - be that to purchase, to rent out and to own. Far too much of the south is suffering from unaffordable housing created in part by foreign home ownership. Regarding my actions - unlike Ramin I'm in the process of selling investments in a GIA and transfering them to my ISA and pension - that way the chances of being adversely affected by the budget is minimized. I appreciate they could introduce totally new taxes or change Council Tax but there's very little I can do about that.
I hope to see the wasteful overseas aid budget cut to save some money. Disgraceful to see this money spent whilst grabbing back the pensioners heating allowance.
Hi @jimb7406 I think heating allowance was a surprising choice so early in their term in office given its obvious unpopularity. But it gives you a taste of what's to come i.e. some difficult and even more unpopular changes are likely to be on the cards for the Autumn budget. Thanks, Ramin.
What impact is the biggest (stealth) tax having? I.e. freezing the current tax bands until 2028. Nobody seems to ever talk about this extra tax generated
Well said. It’s the clever workaround of being able to say ‘We aren’t putting up taxes’. The majority of people don’t understand what fiscal drag is! You are absolutely clobbered by taxes in the U.K. when you run the numbers and look more deeply into it. Go where you’re treated best.
GDP productivity is broadly how much is produced in how many working hours. Our productivity started to diverge when we opened the door to large scale immigration. There were a lot more people and thus a lot more working hours. The UK also has a comparatively flexible labour market, even the legal part not to mention the attractions of the illegal part, that keep the boats coming. France has a very closed labour market. People can be hired and laid off relatively easily in the UK and it makes a lot of sense to flex capacity by hiring people over expending capital on machines. In France once hired it's near impossible to lay that person off, a French company therefore has more incentive to automate. This is why productivity is better in France than here, are these things worth the productivity improvement though?
UK productivity problem is in large part down to the expansion of low-productivity sectors (eg hospitality) of the UK economy after 2008. There is no magic wand to solve this issue for Britain.
No mention of dividends tax rates. I’m expecting 30% pension relief and maybe a drop in allowance to 50k. I think borrowing will go up, won’t all be taxes.
Good point. Another nail in the coffin for the buy to let market. Another big nail will be when Labour abolishes the Section 21 no-fault eviction option for landlords.
Great video Ramin - let's wait and see if your crystal ball is accurate. Regarding the 'no increases in income tax levels'. Don't forget about the freezing of personal allowance and higher rate thresholds are increasing income tax revenue year on year. According to the AI search I made, "the UK's frozen income tax thresholds are expected to raise over £33.5 billion in additional revenue each year by 2028/29. This is due to fiscal drag, which is when inflation or income growth moves taxpayers into higher tax brackets, increasing government revenue without raising tax rates".
Hi @jimb7406 fiscal drag is going to continue (people paying more tax because the thresholds aren't increased in line with wages). I didn't talk about this as it's not a change, strictly speaking. Thanks, Ramin
Black hole or not - surely enough money is already being collected. Spending 44.7% of GDP is way too much! Why is this never spoken about!? We should as a country agree on an acceptance (peacetime) figure as a percentage of income and not allow it to be exceeded. This is getting out of control!!!
The intelligent analysis! Very sensible likelihoods. With the emphasis on 'working people' = 'people who don't have savings' as defined by the PM, I expect some retribution and revenge on people who have saved hard and have thereby inadvertently become 'wealthy' in the PM's eyes by having the temerity to have some savings. Given that the average annual ISA subscription is 8.9K and the median quite a bit lower, I suspect they could lower the ISA limit. It may not yield much tax revenue but i sense there's appetite for retribution against hard savers. I'd favour an income tax increase as it can be made to be fairer using tax bands. Around 30% of UK households are single person, many of these are pensioners, like my mum, who has lower income in retirement but who may be subject to higher council taxes due to an illiquid asset ie house. Twiddling about with the taxation framework without any serious fully thought through analyses of consequences just to fill a 22BN pot hole is irresponsible. If they have thought it through then it was done prior to the election.
After the WFA was cut, I decided to sell my second car to a scrap dealer, not because i didn't need it or want it - it was occasionally useful to me - instead I sold it out of spite knowing that the government would lose £220 VED that was due this month, insurance premium tax and around £50/month on fuel duty. I only used this car to drive around town when the other half used the car and now I'll just walk or cycle instead. If they continue to raise other taxes that affect my aspirations I may start to reevaluate other things I get taxed on such as the planned house extension. Surely if others think this way then it proves increasing taxation doesn't always solve a problem.
excellent video thank you Ramin, hope they cut the overseas aid ; charities CEO's on £100k salaries are already crying saying it will be catastrofic... well...a lot can be cut there...
Hi @JohnDoe-iv7yu we've just had an extended period of austerity so I'm not sure that tax cuts and spending cuts is a recipe that would work. Thanks, Ramin.
Im still astonished that she backed herself into a corner re NI rates . The Tories dropped the rste twice costing billions as a vote sweetener, totally unbudgeted. They should've been reversed. To do what they did scrapping the winter fuel allowance was cruel and idiotic. The winter morbid headlines will be with them for the full term annually. Ridiculous
I am taking no chances and have taken / will take a number of avoidance actions: - in case tax allowance is withdrawn for stocks and shares ISAs, switched my ISA investments (e.g. sell Vanguard UK all share index, buy HSBC all share index) so that they are treated as a disposal for CGT purposes; hopefully any retrospective changes will be judicial reviewed - salary sacrificing as much as possible into my pension - make sure that the tank and all petrol cans will be full on budget day - would have crystallised my pension (i.e. taken the 25% tax free lump sum) but still have a few years to go To be honest, if I was 15-20 years younger, I would be seriously contemplating moving to another country. This country has gone to the dogs, sadly.
Don’t forget vat on private school fees has already been announced, so there is not a blanket freeze on vat. Or should I say, they could broaden the range of VATable goods and services even further.
Hi @immers2410 true, I stuck to new things that might happen in this budget. VAT is pretty broad already. My nomination would be betting and gaming which is inexplicably exempt www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services Thanks, Ramin
@@Pensioncraftthat's bonkers, thanks for mentioning that, I had no idea!! Yet children's car seats have VAT at 5%. I guess the gambling industry could pay more in "donations" than the car seat industry could. It should be a scandal.
We should expect polititions to do what they promise. The winter fuel allowance was an about turn by Labour. The real danger here is by excluding the 3 big pools from which they can tax, they have to scabble around at the back of the sofa looking here and there for pennies. In grabbing those pennies they amend savings behaviour to the long term detriment of society. So maybe it's better they break their election promise ... and blame the Tories saying Labour "had no choice". There are probably no winners here.
Hi @radiantinred I agree about the unintended consequences in behaviour from tax changes e.g. removing or reducing the 25% tax-free lump sum may make people shift more money into ISAs or perhaps even save less into their pensions. As you say I think there won't be any winners unless the growth plan pans out. Let's hope it does. Thanks, Ramin.
Hi @simony2801 the logic seems to be to stimulate growth by government spending and reforms (e.g. planning). This often works e.g. the US has seen a huge effect on growth from its stimulus programs like the CARES act and Inflation Reduction Act which have tried to onshore chip production and improve infrastructure . But it's all a bit chicken-and-egg i.e. you need GDP to be rising to increase spending but to get that growth you have to spend and growth is currently quite anaemic. Thanks, Ramin.
I predict a deeply unimaginative budget, from a deeply unimaginative woman. While the USA restarts nuclear reactors to power Microsoft AI and is building new data centers, our chancellor is more worried about some tiddly wink money she needs to "save" on winter fuel payments for her own people. Oh, and don't forget about worrying about the gender of the people in the paintings in no.11 - that's absolutely top priority to help the UK keep up with the USA and Asia!
I do worry that whatever this government does, it will have not been thought through. Max problems for minimum gain like Winter Fuel payments. Many of these taxes are as they are because the previous government did not fare raise them. There is no big tax revenue windfall in any of them.
Hi @MultiformeIngegno I also don't agree with a lot of their suggestions (the ISA cap being one example!) but it's nice to have an alternative point of view that represents the poorest people in society. There are so many vested interests that protect the wealthy so this provides some balance I think. Thanks, Ramin.
Under modern post-Bretton Woods monetery theory, taxation isn't used to raise revenue. Its used to destroy excess money created by QE. Reeves is being disingenuous. Tax IS useful for killing inflation, and for social programs e.g tax on tobacco or public schools. I'm sure you know this Ramin. We no longer have a fixed money supply, we use a system called "fiat" and we essentially print as much money as inflation and the bond markets will let us get away with. Reeves is pretending to continue with austerity, but the "black hole" is a precursor to us rejoining the EU single market. A scare tactic. Sneaky, but I approve.
Either way, government spending is disciplined by financial constraints with one of them being tax. You write like you have found a great revelation yet it makes no difference whether one frames tax as revenue-raising or money-destruction. the effect is the same. It's just two perspectives on the same thing.
Certainly QE saw an explosion of asset values following GFC. Taxation is a way of dealing with the ensuing inequality. Sadly, each rounds of QE (which is now non-QE QE - they've just called it by another name) grew larger through the 2010s as each stimulus produced a more muted marginal response. Once we left the zero interest regime, this has exploded our government debt interest - the ultimate killer. Our rationale for leaving, however, was more complex: 1. Regulatory burden: we sat down one weekend and listed the additional regulation in our industry over 10 years. It was the size of a PhD thesis and we realised we were spending more time monitoring/paperwork than building the topline 2. Labour: we could see Sunak was going to lose in 2024 (although thought we had until Autumn to get out of town). We were particularly concerned about Labour's NZ/energy policy, which is called the Blackout programme in this household. This threatens what's left of our industrial base at a time of high geopolitical risk (can you have a defence industry without steel production?), threatens the burgeoning AI industry (enormous needs of data centres), and more personally it risks hypothermia and food security. When government's start playing with the lowest levels of Maslow's hierarchy, we take note 3. Government debt. We believe we're moving into a stagflationary environment and - at points - may see double digit interest. Government debt cannot be sustained at that level. 3. Taxation: the numerical broadest shoulders don't have much more to give. The IFS makes it clear that this groups has been soaked. What's needed is an increase in taxes to the average tax player, whose tax has actually gone down. Numerically it's the only way of raising the numbers anyway. Corporation Tax moving from 19 - 25% in a ONER was the final straw .... on back of the regulatory paperwork pile. So we made a short list of options and moved to a country with low tax (they are subject to same structural issues as ageing population, but at least it's starting off low base), zero government debt, no Net Zero policies, and highly cohesive society to get us through the unrest which will emerge towards end of this decade in our view. Anyway, that was our rationale and so far, so good. UK seems to look very much like the 1970s from here .... mum and dad went through that and we heard all about it!
You have missed extended producer responsibility tax changes from April 2025 onwards. Illustrative rates have been shared by the government, pointing to at least a £2bn incremental tax burden.
Allowances new tax year while tax relief / rates would be 1-3 months based on the mid year NI changes and upset to business. ISA reduction won’t give gov any money so no point, remain in bank accounts.
You think they will just double CGT for everybody? I thought the prediction was that CGT would align with your personal tax rate. So essentially it gets added to your income and you pay CGT as you would income tax?
Stamp duty should be abolished. It makes the housing market stagnate, delays people being able to get onto the housing ladder, locks people into their homes not being able to move.
Abolishing stamp duty may just drive up house prices (sellers would increase the asking price to account for the reduced stamp duty paid by buyers) leading to higher inflation. With reduced revenue and increased public debt, interest rates could be forced up, which could make getting on the housing ladder even more difficult. Not a good idea in my opinion.
This is one of the main reasons why you end up with widowed elderly people occupying large family homes. It is not good for them having to heat and maintain it or for families looking for a larger property. I can see myself doing exactly the same simply because the stamp duty will be so expensive to buy a smaller nice house in a nice area.
To have a single rate of pension tax relief they’d effectively have to kill salary sacrifice… which would be unlikely to be achievable in just 5 months remaining in the tax year. It would also lead to additional consequences for child allowance etc.
Council Tax '91 values IN ENGLAND. Wales are at 2023 values, to rise again this year. Likelihood of "garden tax" too and England to follow Wales with removal of 5% rise cap?
Hi @iantobanter9546 I agree that England will likely update its council tax bands based on more recent property valuations as Wales did. After the inflation spike removing the 5% spending increase cap is likely too. Thanks, Ramin.
If you pay higher rate Income Tax If you’re a higher or additional rate taxpayer you’ll pay: 24% on your gains from residential property *** 28% on your gains from ‘carried interest’ if you manage an investment fund 20% on your gains from other chargeable assets. *** I can see them putting the residential property gains tax up to say 30 or more percent. After all most landlords are Tories or retired or wealthy or all three, and Labour hate these with vengeance.
Great video as always! I'm really hoping pensions don't get reformed too aggressively. As a young-ish person without the bank of Mum and Dad my pension (and associated tax relief) is my main wealth building mechanism for myself and my children.
Despite the alarmists, I can't see significant (negative) changes within the pension system. The signalling that the government is prepared to 'alter the deal' is too damaging in itself when the country is already behind in terms of pension provision. At worst they will make changes at the margins such as death taxes on pensions and maybe lifetime allowances. Of course, I could be totally wrong :D
Squandering their best opportunity in 15 yrars to genuinely help the poor. Personal Allowance to £15,000. Reduce excise duty on fuel and beer. Reduce VAT to 18%. Extend Council Tax fo Band Z. Reduce business rates.
Here are the biggest threats to the UK economy. - a government that has no idea what it is doing. - aging population, nation of retirees. They earned it, but gov. did not plan ahead any funding for it. - public sector over generous retire early gold plated unfounded pension obligations. - A nation of unproductive gov non-jobs that need to be funded by an ever shrinking private sector. - Benefits culture, where you are economically better of by not working than trying to...especially if you can fake disability. - Trying to comply with net zero and get awarded a ‘gold star’. No other nation is, in fact they are laughing at the UK for killing its fossil fuel industry while the sell us wind turbines manufactured from their natural gas powered industry. If the UK economy were a ship it’d be less buoyant than the Titanic.
The most sensible changes to me as someone who would have to pay all of these (not necessarily easy to implement) 1% wealth tax per year over x, standarise income relief into pension going fwd to e.g. 20%. ...( think it would be massively unfair to change the rules of taking money out of pensions to those who saved in good faith) and some sort of pay to play for companies that operate in UK but don't pay taxes in UK linked to revenue (avoidance rules for internet based companoes) I think a wealth tax is better than changes to iht (harder to avoid) and would achieve same results.[ Standardisation of cap ex rates to income tax I think is a given]
You just keep churning out these ridiculously thought provoking videos; glad I stumbled upon your channel last year. I hope they don’t meddle with the Isa or pension allowances/cap, other than to increase them of course 😊. Thanks again, Ramin.
!!I recently sold some of my long-term position and currently sitting on about 250k, do you think Nvidia is a good buy right now or I have I missed out on a crucial buy period, any good stock recommendation on great performing stocks or Crypto will be appreciated.
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Why? People need to be incentivised to save into them. Lots of people already either don’t save enough or a deeply cynical about pensions without really understanding benefits. By targeting pensions you reinforce this belief. In addition retirement planning becomes impossible. 25% of a withdrawal is tax free, the rest taxable income. By having 100% taxable will mean you will have to save considerably more in your pension pot and/or live off significantly less. Targeting pensions to raise revenue is not good.
@@Gtbg641 why? Because we need the money and it’s easily collected as it’s income Pensions already receive tax and NI allowances when paying into one, most employers match the percentage invested to a certain figure. Pensions by far and away receive the biggest benefit of any asset/investment vehicle. The argument that it discourages saving can be used for everything, why on earth would any global investor put money into the UK if CGT becomes 45% like income, why would people want to stay in the country till death if their assets are taxed at 40% on death, and you can’t gift anything tax free.
Thank you. I agree with your estimation / prediction of the changes. With Capital gains tax, this one is particularly unfair as it is, because the gains are often due to inflation. Inflation used to be factored in, but now it’s ignored - conveniently 🫤
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Very good and thought provoking. Ideally my 'want' would be to use the budget to simplify the tax system and get rid of anomalies. Unfortunately that won't happen. The likes of the Mail and Torygraph would pick up on every change that adversely impacts their readership without giving credit for the areas that help those same people. I do hope Reeves significantly increases taxes on ownership of UK homes by foreign investors though - be that to purchase, to rent out and to own. Far too much of the south is suffering from unaffordable housing created in part by foreign home ownership. Regarding my actions - unlike Ramin I'm in the process of selling investments in a GIA and transfering them to my ISA and pension - that way the chances of being adversely affected by the budget is minimized. I appreciate they could introduce totally new taxes or change Council Tax but there's very little I can do about that.
I hope to see the wasteful overseas aid budget cut to save some money. Disgraceful to see this money spent whilst grabbing back the pensioners heating allowance.
Hi @jimb7406 I think heating allowance was a surprising choice so early in their term in office given its obvious unpopularity. But it gives you a taste of what's to come i.e. some difficult and even more unpopular changes are likely to be on the cards for the Autumn budget. Thanks, Ramin.
An easy change would be to bring pensions within IHT. The most likely change, I think, to IHT.
Yup - IHT is the best tax as I'll be dead!
What impact is the biggest (stealth) tax having? I.e. freezing the current tax bands until 2028. Nobody seems to ever talk about this extra tax generated
Well said. It’s the clever workaround of being able to say ‘We aren’t putting up taxes’.
The majority of people don’t understand what fiscal drag is!
You are absolutely clobbered by taxes in the U.K. when you run the numbers and look more deeply into it.
Go where you’re treated best.
@@VoiceOfThe agree if you include council tax Vat fuel duty insurance tax airport tax etc etc etc it's well over 50%.
GDP productivity is broadly how much is produced in how many working hours. Our productivity started to diverge when we opened the door to large scale immigration. There were a lot more people and thus a lot more working hours. The UK also has a comparatively flexible labour market, even the legal part not to mention the attractions of the illegal part, that keep the boats coming. France has a very closed labour market. People can be hired and laid off relatively easily in the UK and it makes a lot of sense to flex capacity by hiring people over expending capital on machines. In France once hired it's near impossible to lay that person off, a French company therefore has more incentive to automate. This is why productivity is better in France than here, are these things worth the productivity improvement though?
In my industry I’ve seen salary’s go up by 2x in the USA while they have gone up by 30% here in the same time frame.
UK productivity problem is in large part down to the expansion of low-productivity sectors (eg hospitality) of the UK economy after 2008. There is no magic wand to solve this issue for Britain.
The best summary I’ve heard or read to date.
No mention of dividends tax rates. I’m expecting 30% pension relief and maybe a drop in allowance to 50k. I think borrowing will go up, won’t all be taxes.
CGT should include indexation to take account of inflation. It's possible now to be taxed on notional gains where no real gain has occurred.
Good point. Another nail in the coffin for the buy to let market. Another big nail will be when Labour abolishes the Section 21 no-fault eviction option for landlords.
Great video Ramin - let's wait and see if your crystal ball is accurate. Regarding the 'no increases in income tax levels'. Don't forget about the freezing of personal allowance and higher rate thresholds are increasing income tax revenue year on year. According to the AI search I made, "the UK's frozen income tax thresholds are expected to raise over £33.5 billion in additional revenue each year by 2028/29. This is due to fiscal drag, which is when inflation or income growth moves taxpayers into higher tax brackets, increasing government revenue without raising tax rates".
Hi @jimb7406 fiscal drag is going to continue (people paying more tax because the thresholds aren't increased in line with wages). I didn't talk about this as it's not a change, strictly speaking. Thanks, Ramin
Nice one. And we know the Elephant is back on the bookshelf 😁
Watched (listen mostly) all videos and never ever noticed it.
Black hole or not - surely enough money is already being collected.
Spending 44.7% of GDP is way too much! Why is this never spoken about!? We should as a country agree on an acceptance (peacetime) figure as a percentage of income and not allow it to be exceeded. This is getting out of control!!!
The intelligent analysis! Very sensible likelihoods. With the emphasis on 'working people' = 'people who don't have savings' as defined by the PM, I expect some retribution and revenge on people who have saved hard and have thereby inadvertently become 'wealthy' in the PM's eyes by having the temerity to have some savings. Given that the average annual ISA subscription is 8.9K and the median quite a bit lower, I suspect they could lower the ISA limit. It may not yield much tax revenue but i sense there's appetite for retribution against hard savers.
I'd favour an income tax increase as it can be made to be fairer using tax bands. Around 30% of UK households are single person, many of these are pensioners, like my mum, who has lower income in retirement but who may be subject to higher council taxes due to an illiquid asset ie house. Twiddling about with the taxation framework without any serious fully thought through analyses of consequences just to fill a 22BN pot hole is irresponsible. If they have thought it through then it was done prior to the election.
After the WFA was cut, I decided to sell my second car to a scrap dealer, not because i didn't need it or want it - it was occasionally useful to me - instead I sold it out of spite knowing that the government would lose £220 VED that was due this month, insurance premium tax and around £50/month on fuel duty. I only used this car to drive around town when the other half used the car and now I'll just walk or cycle instead. If they continue to raise other taxes that affect my aspirations I may start to reevaluate other things I get taxed on such as the planned house extension. Surely if others think this way then it proves increasing taxation doesn't always solve a problem.
The problem with CGT is no allowance for inflation.
The objective is to collect as much money as possible from us. They don’t care if its fair or not.
excellent video thank you Ramin, hope they cut the overseas aid ; charities CEO's on £100k salaries are already crying saying it will be catastrofic... well...a lot can be cut there...
Efficiency and TAX CUTS are what need to happen, period. That is ALL that needs to happen. So simple.
Hi @JohnDoe-iv7yu we've just had an extended period of austerity so I'm not sure that tax cuts and spending cuts is a recipe that would work. Thanks, Ramin.
Im still astonished that she backed herself into a corner re NI rates . The Tories dropped the rste twice costing billions as a vote sweetener, totally unbudgeted. They should've been reversed.
To do what they did scrapping the winter fuel allowance was cruel and idiotic. The winter morbid headlines will be with them for the full term annually. Ridiculous
I am taking no chances and have taken / will take a number of avoidance actions:
- in case tax allowance is withdrawn for stocks and shares ISAs, switched my ISA investments (e.g. sell Vanguard UK all share index, buy HSBC all share index) so that they are treated as a disposal for CGT purposes; hopefully any retrospective changes will be judicial reviewed
- salary sacrificing as much as possible into my pension
- make sure that the tank and all petrol cans will be full on budget day
- would have crystallised my pension (i.e. taken the 25% tax free lump sum) but still have a few years to go
To be honest, if I was 15-20 years younger, I would be seriously contemplating moving to another country. This country has gone to the dogs, sadly.
Don’t forget vat on private school fees has already been announced, so there is not a blanket freeze on vat. Or should I say, they could broaden the range of VATable goods and services even further.
Hi @immers2410 true, I stuck to new things that might happen in this budget. VAT is pretty broad already. My nomination would be betting and gaming which is inexplicably exempt www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services Thanks, Ramin
@@Pensioncraftthat's bonkers, thanks for mentioning that, I had no idea!! Yet children's car seats have VAT at 5%. I guess the gambling industry could pay more in "donations" than the car seat industry could. It should be a scandal.
We should expect polititions to do what they promise. The winter fuel allowance was an about turn by Labour. The real danger here is by excluding the 3 big pools from which they can tax, they have to scabble around at the back of the sofa looking here and there for pennies. In grabbing those pennies they amend savings behaviour to the long term detriment of society. So maybe it's better they break their election promise ... and blame the Tories saying Labour "had no choice". There are probably no winners here.
Hi @radiantinred I agree about the unintended consequences in behaviour from tax changes e.g. removing or reducing the 25% tax-free lump sum may make people shift more money into ISAs or perhaps even save less into their pensions. As you say I think there won't be any winners unless the growth plan pans out. Let's hope it does. Thanks, Ramin.
If the problem is low growth how does increasing the tax rake help
Hi @simony2801 the logic seems to be to stimulate growth by government spending and reforms (e.g. planning). This often works e.g. the US has seen a huge effect on growth from its stimulus programs like the CARES act and Inflation Reduction Act which have tried to onshore chip production and improve infrastructure . But it's all a bit chicken-and-egg i.e. you need GDP to be rising to increase spending but to get that growth you have to spend and growth is currently quite anaemic. Thanks, Ramin.
Neither do the high energy costs which Miliband is imposing.
I predict a deeply unimaginative budget, from a deeply unimaginative woman. While the USA restarts nuclear reactors to power Microsoft AI and is building new data centers, our chancellor is more worried about some tiddly wink money she needs to "save" on winter fuel payments for her own people.
Oh, and don't forget about worrying about the gender of the people in the paintings in no.11 - that's absolutely top priority to help the UK keep up with the USA and Asia!
I do worry that whatever this government does, it will have not been thought through. Max problems for minimum gain like Winter Fuel payments. Many of these taxes are as they are because the previous government did not fare raise them. There is no big tax revenue windfall in any of them.
The resolution foundation is a disgrace. They manage to propose the WORST POSSIBLE policies all the times.
Hi @MultiformeIngegno I also don't agree with a lot of their suggestions (the ISA cap being one example!) but it's nice to have an alternative point of view that represents the poorest people in society. There are so many vested interests that protect the wealthy so this provides some balance I think. Thanks, Ramin.
Under modern post-Bretton Woods monetery theory, taxation isn't used to raise revenue. Its used to destroy excess money created by QE.
Reeves is being disingenuous. Tax IS useful for killing inflation, and for social programs e.g tax on tobacco or public schools.
I'm sure you know this Ramin. We no longer have a fixed money supply, we use a system called "fiat" and we essentially print as much money as inflation and the bond markets will let us get away with. Reeves is pretending to continue with austerity, but the "black hole" is a precursor to us rejoining the EU single market. A scare tactic. Sneaky, but I approve.
Either way, government spending is disciplined by financial constraints with one of them being tax. You write like you have found a great revelation yet it makes no difference whether one frames tax as revenue-raising or money-destruction. the effect is the same. It's just two perspectives on the same thing.
Certainly QE saw an explosion of asset values following GFC. Taxation is a way of dealing with the ensuing inequality. Sadly, each rounds of QE (which is now non-QE QE - they've just called it by another name) grew larger through the 2010s as each stimulus produced a more muted marginal response. Once we left the zero interest regime, this has exploded our government debt interest - the ultimate killer. Our rationale for leaving, however, was more complex: 1. Regulatory burden: we sat down one weekend and listed the additional regulation in our industry over 10 years. It was the size of a PhD thesis and we realised we were spending more time monitoring/paperwork than building the topline 2. Labour: we could see Sunak was going to lose in 2024 (although thought we had until Autumn to get out of town). We were particularly concerned about Labour's NZ/energy policy, which is called the Blackout programme in this household. This threatens what's left of our industrial base at a time of high geopolitical risk (can you have a defence industry without steel production?), threatens the burgeoning AI industry (enormous needs of data centres), and more personally it risks hypothermia and food security. When government's start playing with the lowest levels of Maslow's hierarchy, we take note 3. Government debt. We believe we're moving into a stagflationary environment and - at points - may see double digit interest. Government debt cannot be sustained at that level. 3. Taxation: the numerical broadest shoulders don't have much more to give. The IFS makes it clear that this groups has been soaked. What's needed is an increase in taxes to the average tax player, whose tax has actually gone down. Numerically it's the only way of raising the numbers anyway. Corporation Tax moving from 19 - 25% in a ONER was the final straw .... on back of the regulatory paperwork pile.
So we made a short list of options and moved to a country with low tax (they are subject to same structural issues as ageing population, but at least it's starting off low base), zero government debt, no Net Zero policies, and highly cohesive society to get us through the unrest which will emerge towards end of this decade in our view. Anyway, that was our rationale and so far, so good. UK seems to look very much like the 1970s from here .... mum and dad went through that and we heard all about it!
I pray to god we rejoin the EU. No growth on the scale the UK needs without it i am afraid.
If they increase stamp duty then from what date it is likely to be effective?
You have missed extended producer responsibility tax changes from April 2025 onwards. Illustrative rates have been shared by the government, pointing to at least a £2bn incremental tax burden.
If they lowered the 20k limit for ISAs do you think it will become effective immediately or will we still have until april to use it?
Allowances new tax year while tax relief / rates would be 1-3 months based on the mid year NI changes and upset to business. ISA reduction won’t give gov any money so no point, remain in bank accounts.
You think they will just double CGT for everybody?
I thought the prediction was that CGT would align with your personal tax rate. So essentially it gets added to your income and you pay CGT as you would income tax?
Stamp duty should be abolished. It makes the housing market stagnate, delays people being able to get onto the housing ladder, locks people into their homes not being able to move.
Abolishing stamp duty may just drive up house prices (sellers would increase the asking price to account for the reduced stamp duty paid by buyers) leading to higher inflation. With reduced revenue and increased public debt, interest rates could be forced up, which could make getting on the housing ladder even more difficult. Not a good idea in my opinion.
This is one of the main reasons why you end up with widowed elderly people occupying large family homes. It is not good for them having to heat and maintain it or for families looking for a larger property. I can see myself doing exactly the same simply because the stamp duty will be so expensive to buy a smaller nice house in a nice area.
Well explained as ever Ramin :)
To have a single rate of pension tax relief they’d effectively have to kill salary sacrifice… which would be unlikely to be achievable in just 5 months remaining in the tax year. It would also lead to additional consequences for child allowance etc.
Let's not forget about the elephant in the room... as in the elephant is back on the shelf. 🐘
National insurance on rental income ive heard mentioned
Council Tax '91 values IN ENGLAND. Wales are at 2023 values, to rise again this year. Likelihood of "garden tax" too and England to follow Wales with removal of 5% rise cap?
Wales currently revalued in 2003.
Dripford has also floated raising Welsh income tax base rate.
Hi @iantobanter9546 I agree that England will likely update its council tax bands based on more recent property valuations as Wales did. After the inflation spike removing the 5% spending increase cap is likely too. Thanks, Ramin.
If you pay higher rate Income Tax
If you’re a higher or additional rate taxpayer you’ll pay:
24% on your gains from residential property ***
28% on your gains from ‘carried interest’ if you manage an investment fund
20% on your gains from other chargeable assets.
*** I can see them putting the residential property gains tax up to say 30 or more percent. After all most landlords are Tories or retired or wealthy or all three, and Labour hate these with vengeance.
Great video as always! I'm really hoping pensions don't get reformed too aggressively. As a young-ish person without the bank of Mum and Dad my pension (and associated tax relief) is my main wealth building mechanism for myself and my children.
Despite the alarmists, I can't see significant (negative) changes within the pension system. The signalling that the government is prepared to 'alter the deal' is too damaging in itself when the country is already behind in terms of pension provision. At worst they will make changes at the margins such as death taxes on pensions and maybe lifetime allowances. Of course, I could be totally wrong :D
@@nighttrain1236 You raise very good points, and I hope you are correct!
Squandering their best opportunity in 15 yrars to genuinely help the poor.
Personal Allowance to £15,000.
Reduce excise duty on fuel and beer.
Reduce VAT to 18%.
Extend Council Tax fo Band Z.
Reduce business rates.
Here are the biggest threats to the UK economy.
- a government that has no idea what it is doing.
- aging population, nation of retirees. They earned it, but gov. did not plan ahead any funding for it.
- public sector over generous retire early gold plated unfounded pension obligations.
- A nation of unproductive gov non-jobs that need to be funded by an ever shrinking private sector.
- Benefits culture, where you are economically better of by not working than trying to...especially if you can fake disability.
- Trying to comply with net zero and get awarded a ‘gold star’. No other nation is, in fact they are laughing at the UK for killing its fossil fuel industry while the sell us wind turbines manufactured from their natural gas powered industry.
If the UK economy were a ship it’d be less buoyant than the Titanic.
also business owners who decide it isnt worth working more or expanding due to tax laws
I would say the real problem is we have a government that does not want to solve the problems and a sham of democracy to pacify us.
That’s a concise summary. 👏
I’d also add the lack of aspiration in society, which is probably related to the points already made..
@@vinay4886 Yup. You cannot have aspirations if there are few incentives to aspire, just obstacles and penalties.
It’s time to leave rip off Britain and start again somewhere else in my opinion.
Pleased we left uk last year.
🍻Where did you relocate to?
Makes no sense to stay
The most sensible changes to me as someone who would have to pay all of these (not necessarily easy to implement) 1% wealth tax per year over x, standarise income relief into pension going fwd to e.g. 20%. ...( think it would be massively unfair to change the rules of taking money out of pensions to those who saved in good faith) and some sort of pay to play for companies that operate in UK but don't pay taxes in UK linked to revenue (avoidance rules for internet based companoes) I think a wealth tax is better than changes to iht (harder to avoid) and would achieve same results.[ Standardisation of cap ex rates to income tax I think is a given]
You just keep churning out these ridiculously thought provoking videos; glad I stumbled upon your channel last year. I hope they don’t meddle with the Isa or pension allowances/cap, other than to increase them of course 😊. Thanks again, Ramin.
!!I recently sold some of my long-term position and currently sitting on about 250k, do you think Nvidia is a good buy right now or I have I missed out on a crucial buy period, any good stock recommendation on great performing stocks or Crypto will be appreciated.
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Target pensions
Private sector ones or public sector ones ?
@@radiantinred both, mostly private though.
25% lump sum tax free shouldn’t be a thing
Why? People need to be incentivised to save into them. Lots of people already either don’t save enough or a deeply cynical about pensions without really understanding benefits. By targeting pensions you reinforce this belief. In addition retirement planning becomes impossible. 25% of a withdrawal is tax free, the rest taxable income. By having 100% taxable will mean you will have to save considerably more in your pension pot and/or live off significantly less. Targeting pensions to raise revenue is not good.
@@Gtbg641 why? Because we need the money and it’s easily collected as it’s income
Pensions already receive tax and NI allowances when paying into one, most employers match the percentage invested to a certain figure.
Pensions by far and away receive the biggest benefit of any asset/investment vehicle. The argument that it discourages saving can be used for everything, why on earth would any global investor put money into the UK if CGT becomes 45% like income, why would people want to stay in the country till death if their assets are taxed at 40% on death, and you can’t gift anything tax free.
Thank you. I agree with your estimation / prediction of the changes.
With Capital gains tax, this one is particularly unfair as it is, because the gains are often due to inflation. Inflation used to be factored in, but now it’s ignored - conveniently 🫤