Just makes no sense to tax based on value of house, I live in a 4 bed detached with only me my wife and child, Whilst there is a family of 8 in a 3 bed down the road, Who is likely to use more of council services? Should be similar to how BTL HMOs are done, Its based on the number of occupants which is much fairer
It's a rent payment to the council. So you never really own the land you occupy, it's still effectively owned by the council because they charge you rent on it.
@@tancreddehauteville764 Yes well there is the theory of council tax used as a method to gradually get the population to hand over their keys and make everyone a renter... pay per day for everything you touch and breathe haha
I'm genuinely worried about the council tax changes, everyone has to pay this no matter how rich or poor they are so how are they going to make it so "those with the broadest shoulders" carry the burden?? It's already going up each year and it's almost higher than my energy bills at this rate.
it is quite easy to forget what the purposes of the taxes were originally for. Council Tax is should not be about the value of the house, but for the services the council needs to provide. i live in the countryside and the only service we have used or seen so far is having the bins collected every 2 weeks. i know this is an over simplification, by de-linking these taxes from the original purpose enables irresponsible politicians to collect more and more without recourse.
This is what I keep thinking. I live in a house band D on my own whilst a family of 5 adults resides in a 2 bed flat band B. Not saying we should go back to poll tax days, but I do understand the logic they had at the time.
Absolutely, my 86yr old Mum still lives in the family house (alone). She's already paying well over £3k a year in CT, and 'if' they do away with the 25% single persons allowance, £4000. It literally takes her months to fill a bin, she doesn't go anywhere and uses no council services. Potentially CT could take 30% of her state pension, let alone if they increase it. Me? Like many on here I suspect, the possible tax increases are basically a long checklist: yes, yes, probably, yes, definitely etc. That said, I voted Labour as could see disparity between poor and rich was getting wider and the country looks more and more neglected. If I have to pay more to live in a better country, so be it.
That's like saying someone who pays the 40% income tax rate doesn't use twice the NHS. Its called socialism funded by 'those with the broadest shoulders' in Starmers words...
@@stevo728822Apparently, all councils pay it into a central pot as shown by the same account number in use everywhere. From this, much gets sent abroad.
Increase is not based on services used but on property value. If you own big house you are asset rich. You then pay more council tax. The current tax bands system is also based on home valuations but these valuations are from decades ago. It's crazy how stupid this is. Old outdated and unfari system. Btw other countries don't have councli tax to pay at all, UK citizens are shafted again. Yet no people on the streets. Try to do the same in France and you will see cars on fire. Complecency of people in UK with whatever government impose on us is the biggest tragedy. For example can you believe that some sources speculate to increase state pension age to 70yo? Noody protests. But how can one be surprised if state pension in this country is called "benefit" when in reality it is people own money they earned over the years of employment.
The people of the UK don’t need any more pain. Everything you buy is taxed to high heaven. These governments needs to stop wasting tax payers money on helping others who aren’t from the UK, the people here have paid into the system their whole lives yet the government are more happy to give it away rather than helping out our own. Also the whole 30% flat rate tax relief is a nonsense. What if you are salary sacrifice at a higher rate? Are you going to have to pay back the additional 10%? Those who voted in this Labour lot will regret it shortly I think
UK is a poor country with low rate of working population. Start of tax increases for rest of our lives begins Oct 2024. We should have an oil transition fund like Norway to live off free billions money tree but don't.
In reply to edc1569 - I think this is the problem with most government 'allowances' and is never really reported enough by the media. The reason the government don't increase 'allowances' is that the 'allowances' would then generate the government less income. Fiscal Drag is the fancy term.
@Psybx-r4g Inflation is a increase in monetary supply. If you own 10% of existing £ and then they just double the supply your ownership in the network is decreased to 5% meaning they stole 5% of your wealth through printing.
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 vast majority of people don’t understand what fiscal drag is in regards to inflation and tax bands. They are the ultimate stealth taxes. You are absolutely clobbered by taxes as a whole in the U.K. when you run the numbers and delve deeper.
It’s in every OBR forecast and has helped take tax % GDP from 35% in 2022 to 40% in 24/25. That’s still on the low side for taxation Vs other European countries
@alistairrobinson3865 thank you. I think if you combine that with our rates of all other taxes, we must be amongst the highest in Europe but we have governments who want to give us European levels of tax but American level of public services
@@gixxer0506 Ramin seems to think the U.K. doesn’t have high taxes. I think he points to a generous pension allowance. But, most other countries the retirement age is lower than the U.K. Besides, I believe when you run the numbers it equates to over 50% tax. There’s plenty of other places to live where they encourage you to live with much lower tax regimes.
So much focus on extracting more money from workers and no thought to reducing government spending. I think the people should impose their own budget on government spending!
@@chriscoleman2489 Starmer also said he would "not scrap private schools’ charitable status", "Refuse to end the two-child limit", Scrap tuition fees abolish Universal Credit ... He's a liar. And don't call me Shirley. 😉
Basically even higher taxes and more austerity under a different name. If i was rich I'd be out of here. Low growth and short term thinking has landed us here. If we had a government willing to focus on the next 50 years rather than the next election id have some confidence things might improve. But we are where we are!
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 dare raise them. There is no big tax revenue windfall in any of them.
The previous tory government was giving big tax cuts for big corporate businesses since 2010. And raising the 40% tax band threshold since 2010 thus helping the higher earners and big business with big tax cuts. But they also increased indirect stealth taxes a lot since 2010, council tax, Vat, road fund tax and other indirect taxes. But since 2020 the personal tax allowance of £12570 was frozen and the 40% tax band was also frozen. So we now have the highest taxes in 70 yrs. So I don't understand why they are so desperate to raise yet more tax when there must already now be a lot more tax coming into the treasury. And I think they promised not to raise income tax, vat or NI because they was worried about winning the election. But it appears to have been a big mistake
@@coderider3022 Kier promised not to increase income tax, vat or NI. But income tax has gone up a lot since 2021 as the personal tax allowance & 40% tax band threshold were frozen. Also all indirect stealth taxes have gone up a lot since 2010 under the tories. I think this was a big mistake on Kier's part, he was just trying not to lose votes I assume 🤔
Low productivity britain about to be saddled with yet more millstones round its neck. They may see a short term tax take boost but IMO it wont last. I actually think thr size of the state is too large for the tax base to support it properly. Or it will be soon. Something is going to have to give surely?
It's already far too big, that is why debt grows every year. We must slash the numbers in the public sector by at least half. Pen pushers and non-jobs like diversity officers can easily be shed
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.
@@andyyu5957 Savings interest outside an ISA is taxed. However, they got rid of the old system where basic rate tax was deducted before you even received it while the ISA allowance has increased dramatically. I recall when a Cash ISA was limited to £3000 a year.
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.
Hi @george11419 my guess is that Labour would favour progressive taxation i.e. greater taxes for those with a higher income or higher wealth. So those at the bottom of the income scale would not be pushed further into poverty. 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!!!
@@BAmalakas - the world truly has gone nuts when 45% of GDP is considered austerity. Based on the current unfunded liabilities, predominantly pensions, this figure will keep rising! The UK is losing high value individuals hand over fist, this will cost us all in the long run.
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 thing is, if you conserve the environment and make it very hard to change anything, is it any surprise that nothing changes and everything stagnates?
@@blumousey As well as that the 3 largest UK employers (NHS England, Compass Group and Tesco) are not considered high productivity organisations, and there is no easy way to change that.
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.
You didn't mention the IHT grab on pension pots. Much as it pains me (my children!) that this is likely to be part of my estate going forward, in the cold light of day I have to concede the current rules are not exactly equitable
Hi @chrisshave7129 it was in the slides but I didn't mention it verbally. I agree that it was too generous i.e. no IHT to pay at all if you pass on a SIPP to your beneficiaries assuming no drawdown had started. Thanks, Ramin.
I wonder if energy was as expensive after WWII? My theory is debt to GDP is more of an issue now than then due to the higher cost of energy extraction these days.
If any change to CGT was "immediate", what would that technically mean? Would it be from the moment the chancellor first says it outloud or would it actually give until the last second of budget day on 30th October before the rate changed? Thanks.
Hi @Manoharan that's usually the case. Very rarely taxes can be retroactive. But by flagging changes beforehand it gives people a chance to plan ahead. Thanks, Ramin.
Thanks for posting well balanced thoughts on what might happen again and for explaining why less valuable households currently have a bigger burden of council tax revenue. Let's hope the extra revenue from whatever they introduce will be put to good use and help productivity and give younger people more hope for the future and be worth the sacrifice for those with broader shoulders.
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 believe that the government will focus on eliminating reliefs and other tax loopholes. They will definitely increase CGT tax rates. Inheritance tax - I doubt they'll alter the thresholds as that could be controversial, so a rise to 50% in the tax rate is more likely. Council tax - pretty sure that they'll add one or more tax bands to capture the highest value properties. I don't think Reeves will mess around with pension reliefs or the tax free lump sum, but I do think that the maximum pension contribution level of £60k a year will be reduced, maybe by as much as £30k. All pension funds will become liable for inheritance tax. Tobacco and alcohol duties will go up for sure, as doing so ties in with the government's health agenda. I doubt that any significant changes will happen to ISAs.
@@regarded9702 How long have you got? £600m on diversity officers, an absurd waste of money £22bn on catching carbon out of fresh air £10bn+ on "foreign aid" £10bn+ on housing immigrants in hotels and properties. Close the borders Tens of billions on a train line that runs from not quite Birmingham to not quite London £9bn on undeserved and unnecessary foreign aid at least £50bn on long term out of work - time limit it to say 12 months then they're on nothing at least £100bn in NHS inefficiencies, pen pushers, preferred suppliers, you name it And on that score, just slash the number of silly servants. I have seen first hand how little they do. Cull their numbers and let the remaining lazy bums pick up the slack or face the same outcome. Public services are atrocious and over-staffed God knows how much on debt interest, more dead money from over spending in the past.
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.
They could argue that with tax relief at 30% "workers" would be getting a better deal For someon on the average wage of £35K that would probably be true. Removing salary sacrifice would also cause a large drop in the number of EV registrations which would probably be of complete surprise to the Government.
I think the council tax idea could cause massive issues - many asset rich but cash poor people sitting on virtual equity etc. Pension tinkering is intersting if the upper contibution amount etc is changed as it's cohvert way of increasing income tax by simply brining more of people's income into the scope of the income tax
The coucil tax does need a big review. For example Windsor as well as most of London has tiny council tax both numerically and in proportion to the value of properties, sometimes (
@@NomadJRG yes let's see. I don't really get the connection between house value and council tax. We are all individuals using the service. I am as another example it would be rather strange if the price of a loaf or pint of milk altereed depenign on how much you earn etc and the thing with property value is that it doesn't take into account debt, or liquidity, or ability to move for a number of reasons. The only login in my mind is bigger house = more people = more contribution which is ok. The system will never be perfect though so let's see
Why not crystallise gains in a GIA before the budget timing it so that you can repurchase within 30 days (but after budget) if CGT rates don’t change. This is essentially a reversible sale subject to movements in the market (which could give rise to. Small gain or loss) vs a large gain built up over many years?
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.
The pensioners heating allowance was not "grabbed back", it is means tested, but what more the triple lock increase offsets the cut for those who actually experience it! It's tragic that people defend this here, people all over the UK - especially younger generations - the ones mostly paying for this right now, but who might not get as much back when they becoming pensioners. About 1 in 4 pensioners is a millionaire, the support for them needs to be cut because the pension system is not sustainable and the demographics are not there anymore to sustain it. The money that is cut must go into national investment projects. If no government has the balls to do that then the UK is in for quite the populist ride again and this time much harder.
@@Pensioncraft1.4billion saving for WFA on a 1.2 trillion per year spending plan isn’t a serious economic policy, it was theatrical gesture to make us blame the tories for the 22billion black hole, not sure that worked though…
Present Council Tax rates aren’t unfair. Someone in a small cheap property gets pretty much exactly the same services as someone in a large expensive property. They get their rubbish collected, and are actually more likely to utilise Social Services etc.
I left the U.K. to move to Andorra after the brexit vote, best move Iv ever made, just wish I’d left that depressing shxthole ten years earlier. Moved all my investments to the US dollar/US markets…..have done well, while U.K. markets as always, have gone nowhere, U.K. has terminal decline and terrible immigration problems.
I have announced to my clients that I will be reducing my hours if my taxes go up because I refuse to work for the government when they waste money on Ukraine and dinghy tourists.
I know a lot of people in Scotland personally who have done just that, and we are talking normal working class so this is already happening here especially as our tax bands in Scotland have not increased as they have in England, seems weird even saying that. So this penny has already dropped with a lot of the public, even just on the belief that Gov is using our money uneconomically whatever it is spent on . Just about to lose our only oil refinery too. Find that stunning and we have green peace and others challenging drilling licences for the North Sea , you could not make it up, no one would believe any of it. Keep stacking.
Slightly technical accounting point: the goverment imposes taxes to remove money that is has already spent. This can make room in the overall system to spend more money (without unduly creating inflationary pressure or interfering with interest rates). How the tax is levied can lead to distributional changes in behaviour and production which might be desirable (...or spectacularly backfire....)
Do you think it will effect the pound? I need a good exchange rate between GBP to CAD to send money there and maybe I need to send it quick before the budget?
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 you pound cost average into an ETF (vusa for example) over decades and then sell, how do you work out what the CGT should be? As theres not one fixed starting price
Hi @JMH2022 according to HMRC "You add together the costs of the shares in this holding: each share in the holding is treated as if acquired at the same average cost". More here www.gov.uk/government/publications/shares-and-capital-gains-tax-hs284-self-assessment-helpsheet/hs284-shares-and-capital-gains-tax-2024 Thanks, Ramin.
This is a no brainer for me. It’s mad that some money is inside IHT and some is outside. We can argue a fair rate of IHT, but randomly having certain pots that sit outside it is madness.
@@kw8757decent chance he wouldn’t have been affected. Less than 10% of estates pay it…. I’ve never understood the hatred of IHT (and I am someone that stands to inherit quite a lot)
Instead of constantly taxing working people, it’s time they taxed companies based on UK sales. Companies like Apple use loopholes to pay minimal tax, and then when they do have tax to pay, funnel profits via Ireland to minimise the cost. A UK sale should mean UK tax, no ifs or buts, no loop holes. Don’t like it then don’t sell in the UK.
I live in the Isle of Man, we don't have CGT or inheritance tax. I was talking about the likely UK CGT increase today with my financial advisor, I was saying he could be getting a lot of enquiries soon. He said they have already started 😂
Hi @wulfsorenson8859 only about 7% of deaths in the UK result in any inheritance tax being paid. Once you combine a couple's allowances after the death of one partner the threshold for estates to start paying IHT is £1 million. Paul Johnson talks about this in his excellent book "Follow the Money". Thanks, Ramin.
@@Pensioncraft That’s and total and utter lie and why are you focusing only on couples??? When the boomers die off well over 40% of the population will be hit by IHT. Especially in the south east. Average property price there easily fall into that bracket already. Labour are now discussing increasing it to 55% and removing the £175k relief for direct descendants. They want to prevent the boomers passing on their wealth so their children will NEVER own a home. You will own nothing and ‘be happy’.
Hi @Blackfire-Five I believe it's very likely that this will happen in 2025 educationhub.blog.gov.uk/2024/09/06/vat-private-schools-everything-you-need-to-know/ Thanks, Ramin.
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
It will be interesting to see if they ever let the Full State Pension exceed the Basic Rate Tax Threshold. It happens with some SERPS pensions already.
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.
This has to one of the most idiotic policies as now there will be an exodus of students from private schools into the already struggling and rubbish state schools. Talk about penny wise and pound foolish! 😂
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.
There are / were lots of working people with large savings. So much so that there has been an exodus of people around 60 from where I work. I find it annoying that they aren't paying National Insurance while trying to work out how to burn through their £200K Tax Free Lump Sums.
@@jeffocks793 I actually do think they should pay NI on Pension Income until they reach State Pension age. Do you think it is fair that that a 65 year old earning £20000 a year pays NI while 57 year olds blowing their tax free lump sum on £20000 motorbikes, £60000 SUVs, and cruises don't ?
@@MrDuncl well, I understand what you are saying. But I'm not sure we should establish a general principle based on inadvisable spending by a few. If they spent the money on a long term care policy, or paid of a mortgage, or bought a further annuity would that be acceptable? Buying SUVs etc seems wasteful to me but people plan their finances differently to me. I wouldn't want to be taxed further because some people are profligate with their lump sums. On the other hand I can see a case for paying NI into retirement if it can be fully planned for in advance. That is, we can't just decide to cream off £££ from people's pensions if they had no opportunity to factor it into their advance pension planning.
@@jeffocks793 If they spent the money on a long term care policy, or paid of a mortgage, or bought a further annuity would that be acceptable? Yes, Yes, and Yes. If you hadn't realised the examples I gave are real ones of younger colleagues who have now retired. According to one "It is essential to spend all your pension before you get dementia" . Yes I could retire now and do the same thing. However, I wouldn't expect any sympathy if I ended up poor at 80. In a conversation with a different colleague we agreed how annoying it is when people ask "Are you still working ???" with a tone that implies you should see a mental health specialist.
2:37 Curious that the modern day rise in debt to GDP lines up with start of austerity. I know there was another event that happened then too and that the UK government response to that event was austerity but I wonder how many other comparable nations debt to GDP graphs match ours?
I wouldn't mind but the shocking state of roads, the more frequent flooding (because they stopped cleaning drains and other water management), the terrible condition and value of leisure facilities, not enough police or ambulances, library only open 3 half days a week etc etc. Id pay more tomorrow but i know full well none of the above would change.
People with "broader shoulders" do not pay inheritance tax. They just put their properties and assets in a Trust and use that to pass the wealth on to their relatives. That's how the Duke of Westminster inherited £9 billion without paying a penny inheritance tax.
Removing it for pensions is really bad IMO. Remember you get taxed when you draw your pension. This would be like a double dip albeit decades apart. They should keep it to encourage saving. Too many do not save enough. I can see salary sacrifice going for EVs. Really it's subsidising people with money to buy new cars. Which doesn't sit well, even though the goal is to help get electric cars into the mainstream. Part of the problem I see with the scheme is the lease companies just pocketing that relief. On the flip, removing it would almost certainly blow the arse out of the EV market. And that's on the skids as it is! Won't do their net-zero and no ICE by 2030 any favours.
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?
Hi @JD83000 I think it may be brought closer to income tax that is taxed at the higher rate - it's already taxed at the basic rate of income tax (20%). Thanks, Ramin.
Construction skill shortages are self inflicted I worked construction and year on year they shipped in migrants lower my wages to the point I was earning less than someone in a factory(when u add on the 3 hours a day travelling and parking fees to be near a site so many of us left and now u have people unqualified doing crap worm living 9 to a house building houses bought up by rich Indians
A question for Ramin. Why was the Pension Commencement Tax Free Lump Sum introduced in the first place? Neither Google or Bing gives an answer, just loads of details on how to use it.
If the reports are to be believed, Ms Reeves is finding 1bn to build new schools and social housing. She should be investing in up keeping and weather proofing the schools we already have, the social housing we also already have that are falling to rack and ruin and the same with our hospitals. Who is the government building the houses and schools for? Hopefully and rightfully the homes will be for our homeless veterans and British born citizens, but don’t hold your breath!
It’s obvious: they will raise taxation rates on dividend income to income tax levels. Not a tax on working. They may also charge NI on dividends too. Painful. The treasury has shown that raising CGT would mean less tax is raised than now.
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...
Couldn't agree more with cutting overseas aid Javi. Since the country cannot balance the books the UK is effectively borrowing the money to give away to other countries, some of which have space programs and are endemically corrupt. It is good to be generous but the truth is we as a country can't afford this.
CGT at income tax rates, (or with a zero allowance), without indexation relief would be a monumental disincentive to investing in equities outside a SIPP or ISA. Without broad equity investment there will be a lack of capital investment in the very things that companies might invest in to increase productivity. Unless CGT is broadly fair, (i.e. taxing real gains not inflationary gains), then it risks raising next to nothing as behaviour will change and nobody will sell to trigger a gain, or will invest going forward in instruments that are CGT exempt such as gilts. Since, (currently), death does not trigger a CGT calculation, surely anybody who can, will simply adjust and hold any paper CGT liabilities 'til the grim reaper appears, or, a new government with a different approach. The reality is that a typical buy to let bought 20 years ago will have appreciated in value at a headline rate that looks great, factor in CPI inflation, and it actually looks a poor investment compared to say equities. Sell post October 30th, and without indexation relief, after CGT was levied, it would become a significantly negative investment in real terms, and nobody unless desperate would sell.
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.
Rather than politicians patronising us by telling us we should be giving up our avocado toast how about the state goes on a diet? The state has become too big and too greedy of late. Just look at countries like Singapore, the state is a fraction of the size of the UK and taxes are (funnily enough) a fraction of what we pay in the UK, just 23% of the top rate? How does that work then?
When will the budget changes come into effect? Next financial year (Apr2025)? In that case, one could wait until after the budget is announced and then sell any capital gains before a change in tax comes into effect. When are budget changes usually implemented?
Hi @Christopherfife usually they come into force in the next tax year. If they are changes that require planning, such as pension changes, often they come in with a lag. I suspect a Capital Gains Tax change would come in during the next tax year as people selling beforehand would still increase revenue albeit by less than if they delayed the sale until after the change. The government needs tax now to spend on their growth plan and this would still achieve that. Thanks, Ramin
What would be the repercussions if Govt simply decided to pay interest on the national debt at a lower rate - saving 10’s of billions that way. Have heard it said that such lower rates are used in the Euro zone and in Japan.
If the UK govt weren't in the pocket of the private banks they would stop paying interest to said private banks for their LEGAL REQUIREMENT to hold reserves with the BoE. Would save us £30 billion immediately and as you say - Japan and the ECB both have a tiered capital system which does much the same. its ridiculous that we taxpayers are literally paying for private banks to profit just to keep those irresponsible scumbags who blew up the economy in 2008 honest.
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.
I don’t think you understood his valid point. Raising stamp duty would incentivise people to stay in their large family homes long after the children and husband have left/died because the hit of CGT and STLT means they would not end up with any additional capital just a smaller worse house and a big tax bill for the hassle …… therefore stagnation. Easing SDLT would obviously make this worse
Labour has a tough job and their messaging has not been good so far - the public polls reflect that - raising tax is unpopular, but expected, HOWEVER not investing it into smth that would allow growth and speaking about austerity is abysmal. I can count on one hand the projects that could actually give meaningful growth like GB Energy, but the news on austerity measures are much more plentiful. Here's hoping its a political strategy of doing the most unpopular things first... The UK needs investment in all sorts of tech companies, from space to medical...these are the high productivity, high margin sectors.
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
Yep they should do that. The winter fuel allowance was a bad policy though. The tories have diverted too many resources to the old and it is intergenerationally unfair.
@@Cassp0nk I don’t think we should fall for the “inter generational unfairness” narrative, the divide is wealth, not age Ie you can be young and broke, but if your parents have money, you’re basically fine, but if you’re young and broke but your parents are also broke, then taking their WFA isn’t going to help you.
@@Cassp0nk so I’ve heard similar arguments re the triple lock . For some inexplicable reason the left seem to think pensioners are all wealthy and spend time playing bridge , well we’re not . Most of us struggle these days . Millionaires should probably be exempt the same applies to family allowance, do posh and beck’s really need it ? The younger working population though will benefit eventually and will probably need it , thank goodness for compounding. It was introduced for a good reason , and things haven’t changed that much just a bit worse .
Apparently they aren’t going to tax gifts to politicians.
Good point @MARTINA-gc3tq 8-) Thanks, Ramin.
That’s about right 😠
Already bricking some of my windows up, in case they bring that one back!!!
Smart move, get those bricks while they're cheap ;)
A window reduction tax will apply
Council tax is becoming another large bill like the mortgage payment.
Agree and what do we get in return?
Just makes no sense to tax based on value of house, I live in a 4 bed detached with only me my wife and child, Whilst there is a family of 8 in a 3 bed down the road, Who is likely to use more of council services? Should be similar to how BTL HMOs are done, Its based on the number of occupants which is much fairer
It's a rent payment to the council. So you never really own the land you occupy, it's still effectively owned by the council because they charge you rent on it.
@@tancreddehauteville764 Yes well there is the theory of council tax used as a method to gradually get the population to hand over their keys and make everyone a renter... pay per day for everything you touch and breathe haha
I'm genuinely worried about the council tax changes, everyone has to pay this no matter how rich or poor they are so how are they going to make it so "those with the broadest shoulders" carry the burden?? It's already going up each year and it's almost higher than my energy bills at this rate.
it is quite easy to forget what the purposes of the taxes were originally for. Council Tax is should not be about the value of the house, but for the services the council needs to provide. i live in the countryside and the only service we have used or seen so far is having the bins collected every 2 weeks. i know this is an over simplification, by de-linking these taxes from the original purpose enables irresponsible politicians to collect more and more without recourse.
14:10 but those larger houses aren't using 3x the council bin services etc.
This is what I keep thinking. I live in a house band D on my own whilst a family of 5 adults resides in a 2 bed flat band B. Not saying we should go back to poll tax days, but I do understand the logic they had at the time.
Absolutely, my 86yr old Mum still lives in the family house (alone).
She's already paying well over £3k a year in CT, and 'if' they do away with the 25% single persons allowance, £4000.
It literally takes her months to fill a bin, she doesn't go anywhere and uses no council services. Potentially CT could take 30% of her state pension, let alone if they increase it.
Me? Like many on here I suspect, the possible tax increases are basically a long checklist: yes, yes, probably, yes, definitely etc.
That said, I voted Labour as could see disparity between poor and rich was getting wider and the country looks more and more neglected.
If I have to pay more to live in a better country, so be it.
That's like saying someone who pays the 40% income tax rate doesn't use twice the NHS. Its called socialism funded by 'those with the broadest shoulders' in Starmers words...
@@stevo728822Apparently, all councils pay it into a central pot as shown by the same account number in use everywhere. From this, much gets sent abroad.
Increase is not based on services used but on property value. If you own big house you are asset rich. You then pay more council tax. The current tax bands system is also based on home valuations but these valuations are from decades ago. It's crazy how stupid this is. Old outdated and unfari system. Btw other countries don't have councli tax to pay at all, UK citizens are shafted again. Yet no people on the streets. Try to do the same in France and you will see cars on fire. Complecency of people in UK with whatever government impose on us is the biggest tragedy. For example can you believe that some sources speculate to increase state pension age to 70yo? Noody protests. But how can one be surprised if state pension in this country is called "benefit" when in reality it is people own money they earned over the years of employment.
Thanks much for this video,I've never been so stressed over a budget
Glad you found it helpful @01302
Balanced and insightful as ever Ramin, many thanks.
Hi @MrHotrod79 thank you for that! I appreciate the comment and the payment. Ramin.
The people of the UK don’t need any more pain. Everything you buy is taxed to high heaven. These governments needs to stop wasting tax payers money on helping others who aren’t from the UK, the people here have paid into the system their whole lives yet the government are more happy to give it away rather than helping out our own.
Also the whole 30% flat rate tax relief is a nonsense. What if you are salary sacrifice at a higher rate? Are you going to have to pay back the additional 10%?
Those who voted in this Labour lot will regret it shortly I think
UK is a poor country with low rate of working population.
Start of tax increases for rest of our lives begins Oct 2024.
We should have an oil transition fund like Norway to live off free billions money tree but don't.
The gov sold off north Sea for a quick buck over utilising it for the people. The uk gov is and always have been a bunch of over educated idiots
Kalergi plan.
Be careful, they will be calling you Far Right suggesting we should support our pensioners
No regrets voting Labour in our house .
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.
There used to be but having declared inflation beaten they got rid of it.
In reply to edc1569 - I think this is the problem with most government 'allowances' and is never really reported enough by the media. The reason the government don't increase 'allowances' is that the 'allowances' would then generate the government less income. Fiscal Drag is the fancy term.
@Psybx-r4g It should change to how much currency has been printed not just inflation.
@Psybx-r4g Inflation is a increase in monetary supply. If you own 10% of existing £ and then they just double the supply your ownership in the network is decreased to 5% meaning they stole 5% of your wealth through printing.
'They'll tax the air we breathe next!' Oh right, they've already done that😠
The BBC is doing that 🤨
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 vast majority of people don’t understand what fiscal drag is in regards to inflation and tax bands. They are the ultimate stealth taxes.
You are absolutely clobbered by taxes as a whole in the U.K. when you run the numbers and delve deeper.
@@VoiceOfThe agree if you include council tax Vat fuel duty insurance tax airport tax etc etc etc it's well over 50%.
It’s in every OBR forecast and has helped take tax % GDP from 35% in 2022 to 40% in 24/25. That’s still on the low side for taxation Vs other European countries
@alistairrobinson3865 thank you. I think if you combine that with our rates of all other taxes, we must be amongst the highest in Europe but we have governments who want to give us European levels of tax but American level of public services
@@gixxer0506
Ramin seems to think the U.K. doesn’t have high taxes. I think he points to a generous pension allowance. But, most other countries the retirement age is lower than the U.K.
Besides, I believe when you run the numbers it equates to over 50% tax.
There’s plenty of other places to live where they encourage you to live with much lower tax regimes.
So much focus on extracting more money from workers and no thought to reducing government spending. I think the people should impose their own budget on government spending!
Surely, the PM has stated that working people won't be taxed more.... 😐🤔
@@chriscoleman2489 Starmer also said he would
"not scrap private schools’ charitable status",
"Refuse to end the two-child limit",
Scrap tuition fees
abolish Universal Credit ...
He's a liar.
And don't call me Shirley. 😉
The best summary I’ve heard or read to date.
Hi @ShambaBasher thanks! Ramin.
Basically even higher taxes and more austerity under a different name. If i was rich I'd be out of here. Low growth and short term thinking has landed us here. If we had a government willing to focus on the next 50 years rather than the next election id have some confidence things might improve. But we are where we are!
How much of all this was included in their manifesto?
@@Capri-x8m
Nobody did. They got 35% of the vote.
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 dare raise them. There is no big tax revenue windfall in any of them.
The previous tory government was giving big tax cuts for big corporate businesses since 2010. And raising the 40% tax band threshold since 2010 thus helping the higher earners and big business with big tax cuts. But they also increased indirect stealth taxes a lot since 2010, council tax, Vat, road fund tax and other indirect taxes. But since 2020 the personal tax allowance of £12570 was frozen and the 40% tax band was also frozen. So we now have the highest taxes in 70 yrs. So I don't understand why they are so desperate to raise yet more tax when there must already now be a lot more tax coming into the treasury. And I think they promised not to raise income tax, vat or NI because they was worried about winning the election. But it appears to have been a big mistake
Paul Johnson on his podcasts said this and it’s probably easy just to whack up income tax by 2-3p. Politically toxic move but solves problem.
“..fully costed and fully funded”, remember that statement in their campaign?
@@coderider3022 Kier promised not to increase income tax, vat or NI. But income tax has gone up a lot since 2021 as the personal tax allowance & 40% tax band threshold were frozen. Also all indirect stealth taxes have gone up a lot since 2010 under the tories. I think this was a big mistake on Kier's part, he was just trying not to lose votes I assume 🤔
Low productivity britain about to be saddled with yet more millstones round its neck. They may see a short term tax take boost but IMO it wont last.
I actually think thr size of the state is too large for the tax base to support it properly. Or it will be soon. Something is going to have to give surely?
100% of GDP is current borrowing. Projected to increase to 300% highest ever.
Money under the mattress is best bet from here forwards.
Low productivity is a big problem.
It's already far too big, that is why debt grows every year. We must slash the numbers in the public sector by at least half. Pen pushers and non-jobs like diversity officers can easily be shed
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.
So should savings interest.
@@andyyu5957 Savings interest outside an ISA is taxed. However, they got rid of the old system where basic rate tax was deducted before you even received it while the ISA allowance has increased dramatically. I recall when a Cash ISA was limited to £3000 a year.
Most gains are due to the increase of the money supply out of thin air robbery
Inflation is the creation of the currency
Deeply concerned by the up coming budget. Think many will move abroad, including my family
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 to put your tin foil hat on 😂
Gone to the dogs was used forty years ago. Must be living amongst us by now 😂
I’ve dumped as much money as possible into pension since jan just in case they do something.
Only thing I would disagree on is the pension funding. Can you really trust the government nor to raid private pension funds before you retire?
So you are starting a run on fuel that you are trying to avoid?
When would the chsnges to CGT come in, if thkgs change?
The tax burden is already too heavy. Tax increases will stretch household budgets even further. Soon, we will no longer afford food.
Hi @george11419 my guess is that Labour would favour progressive taxation i.e. greater taxes for those with a higher income or higher wealth. So those at the bottom of the income scale would not be pushed further into poverty. 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!!!
Yes more austerity - just what we need!
@@BAmalakasthey need to make cuts sensible places eg 40 million rental cost of sunaks chopper etc
@@BAmalakas - the world truly has gone nuts when 45% of GDP is considered austerity. Based on the current unfunded liabilities, predominantly pensions, this figure will keep rising!
The UK is losing high value individuals hand over fist, this will cost us all in the long run.
@@davidcalvert-smith4633 maybe we need to increase GDP by giving people an incentive to work
The thought of giving that bunch of incompetent losers more money (whether it is a red or blue government) is soul destroying
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 thing is, if you conserve the environment and make it very hard to change anything, is it any surprise that nothing changes and everything stagnates?
@@blumousey As well as that the 3 largest UK employers (NHS England, Compass Group and Tesco) are not considered high productivity organisations, and there is no easy way to change that.
Tesco £13 billion profit 25% tax.
UK oil &gas £1.8 billion, 80% tax.
Wrong target = poor outcome.
I hope Rachel is better economist than Hunt.
Exactly and we cannot have a buoyant economy off the back of hoards of Uber eats and warehouse workers. No where near "value add" enough.
Presumably rebalancing pies in Trading 212 will incur stamp duty if any UK shares are involved. This never seems to get mentioned.
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.
You didn't mention the IHT grab on pension pots. Much as it pains me (my children!) that this is likely to be part of my estate going forward, in the cold light of day I have to concede the current rules are not exactly equitable
Hi @chrisshave7129 it was in the slides but I didn't mention it verbally. I agree that it was too generous i.e. no IHT to pay at all if you pass on a SIPP to your beneficiaries assuming no drawdown had started. Thanks, Ramin.
I wonder if energy was as expensive after WWII? My theory is debt to GDP is more of an issue now than then due to the higher cost of energy extraction these days.
If any change to CGT was "immediate", what would that technically mean?
Would it be from the moment the chancellor first says it outloud or would it actually give until the last second of budget day on 30th October before the rate changed? Thanks.
If they announce the budget in Oct, from when this will come in to play? April 2025?
Hi @Manoharan that's usually the case. Very rarely taxes can be retroactive. But by flagging changes beforehand it gives people a chance to plan ahead. Thanks, Ramin.
Thanks for posting well balanced thoughts on what might happen again and for explaining why less valuable households currently have a bigger burden of council tax revenue. Let's hope the extra revenue from whatever they introduce will be put to good use and help productivity and give younger people more hope for the future and be worth the sacrifice for those with broader shoulders.
Hi @davidcollier6520 let's hope so! Thanks, Ramin.
Council tax is already eye watering high as it is
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.
Better not touch ISA's
Why not? You would be getting taxed on income you didn't earn.
@@sassasins031 it needs to stay tax free we get taxed enough in this country
@@sassasins031 Because had they not been "tax free" we'd have invested in the money in a SIPP years ago
@@sassasins031🤦♂️
@@Danzo1212 That's a different issue.
I believe that the government will focus on eliminating reliefs and other tax loopholes. They will definitely increase CGT tax rates. Inheritance tax - I doubt they'll alter the thresholds as that could be controversial, so a rise to 50% in the tax rate is more likely. Council tax - pretty sure that they'll add one or more tax bands to capture the highest value properties. I don't think Reeves will mess around with pension reliefs or the tax free lump sum, but I do think that the maximum pension contribution level of £60k a year will be reduced, maybe by as much as £30k. All pension funds will become liable for inheritance tax. Tobacco and alcohol duties will go up for sure, as doing so ties in with the government's health agenda. I doubt that any significant changes will happen to ISAs.
Why can't they address the actual root problem? They spend FAR FAR FAR too much
Go on then, what do you propose we cut spending on? Address the root of the problem for us.
@@regarded9702 How long have you got?
£600m on diversity officers, an absurd waste of money
£22bn on catching carbon out of fresh air
£10bn+ on "foreign aid"
£10bn+ on housing immigrants in hotels and properties. Close the borders
Tens of billions on a train line that runs from not quite Birmingham to not quite London
£9bn on undeserved and unnecessary foreign aid
at least £50bn on long term out of work - time limit it to say 12 months then they're on nothing
at least £100bn in NHS inefficiencies, pen pushers, preferred suppliers, you name it
And on that score, just slash the number of silly servants. I have seen first hand how little they do. Cull their numbers and let the remaining lazy bums pick up the slack or face the same outcome. Public services are atrocious and over-staffed
God knows how much on debt interest, more dead money from over spending in the past.
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.
Plus, war with powerful unions. Settle pay rises with unions and then try to screw them on pensions. But, Labour, are daft enough to try just that.
They could argue that with tax relief at 30% "workers" would be getting a better deal For someon on the average wage of £35K that would probably be true.
Removing salary sacrifice would also cause a large drop in the number of EV registrations which would probably be of complete surprise to the Government.
I think the council tax idea could cause massive issues - many asset rich but cash poor people sitting on virtual equity etc. Pension tinkering is intersting if the upper contibution amount etc is changed as it's cohvert way of increasing income tax by simply brining more of people's income into the scope of the income tax
The coucil tax does need a big review. For example Windsor as well as most of London has tiny council tax both numerically and in proportion to the value of properties, sometimes (
@@NomadJRG yes let's see. I don't really get the connection between house value and council tax. We are all individuals using the service. I am as another example it would be rather strange if the price of a loaf or pint of milk altereed depenign on how much you earn etc and the thing with property value is that it doesn't take into account debt, or liquidity, or ability to move for a number of reasons. The only login in my mind is bigger house = more people = more contribution which is ok. The system will never be perfect though so let's see
Them vs. Us continues.
Thank you Ramin -i’ve learnt more about tax collection in the last 20 minutes than I have over the last 61 years.
So pleased you found it helpful @MichaelBaker-f1o
Ramin do you really think she will increase capital gains tax to 45% across the board. And no inflation linked relief? No one will invest in the UK.
That's their plan, the destruction of the UK.
basic income earners will move from 10 to 20%. Higher earners will move to 45%.
@@bushmonster1702 And nobody will bother to invest at all any more, further expediting our demise into a third world country
@@graemejones9707agreed. If I could leave tomorrow I would.
Your RAMIN code doesn’t work on Trading 212.
Why not crystallise gains in a GIA before the budget timing it so that you can repurchase within 30 days (but after budget) if CGT rates don’t change.
This is essentially a reversible sale subject to movements in the market (which could give rise to. Small gain or loss) vs a large gain built up over many years?
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.
Calm down Nigel
The pensioners heating allowance was not "grabbed back", it is means tested, but what more the triple lock increase offsets the cut for those who actually experience it! It's tragic that people defend this here, people all over the UK - especially younger generations - the ones mostly paying for this right now, but who might not get as much back when they becoming pensioners. About 1 in 4 pensioners is a millionaire, the support for them needs to be cut because the pension system is not sustainable and the demographics are not there anymore to sustain it. The money that is cut must go into national investment projects. If no government has the balls to do that then the UK is in for quite the populist ride again and this time much harder.
Look up Matt Kennard's work on overseas aid. Most of it goes to the oligarchy.
@@Pensioncraft1.4billion saving for WFA on a 1.2 trillion per year spending plan isn’t a serious economic policy, it was theatrical gesture to make us blame the tories for the 22billion black hole, not sure that worked though…
Present Council Tax rates aren’t unfair. Someone in a small cheap property gets pretty much exactly the same services as someone in a large expensive property. They get their rubbish collected, and are actually more likely to utilise Social Services etc.
I left the U.K. to move to Andorra after the brexit vote, best move Iv ever made, just wish I’d left that depressing shxthole ten years earlier. Moved all my investments to the US dollar/US markets…..have done well, while U.K. markets as always, have gone nowhere, U.K. has terminal decline and terrible immigration problems.
Does Andorra now have terrible immigration problems?
Are you using an European based broker while living in Andorra?
I have announced to my clients that I will be reducing my hours if my taxes go up because I refuse to work for the government when they waste money on Ukraine and dinghy tourists.
I know a lot of people in Scotland personally who have done just that, and we are talking normal working class so this is already happening here especially as our tax bands in Scotland have not increased as they have in England, seems weird even saying that. So this penny has already dropped with a lot of the public, even just on the belief that Gov is using our money uneconomically whatever it is spent on . Just about to lose our only oil refinery too. Find that stunning and we have green peace and others challenging drilling licences for the North Sea , you could not make it up, no one would believe any of it. Keep stacking.
Slightly technical accounting point: the goverment imposes taxes to remove money that is has already spent. This can make room in the overall system to spend more money (without unduly creating inflationary pressure or interfering with interest rates). How the tax is levied can lead to distributional changes in behaviour and production which might be desirable (...or spectacularly backfire....)
Do you think it will effect the pound? I need a good exchange rate between GBP to CAD to send money there and maybe I need to send it quick before the budget?
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.
He's right, council tax is unfair, the poll tax as much fairer....let every adult pay the same for the services they get
If you pound cost average into an ETF (vusa for example) over decades and then sell, how do you work out what the CGT should be? As theres not one fixed starting price
Hi @JMH2022 according to HMRC "You add together the costs of the shares in this holding: each share in the holding is treated as if acquired at the same average cost". More here www.gov.uk/government/publications/shares-and-capital-gains-tax-hs284-self-assessment-helpsheet/hs284-shares-and-capital-gains-tax-2024 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!
@@psprog Are your parents dead, or have you already benefitted?
This is a no brainer for me. It’s mad that some money is inside IHT and some is outside. We can argue a fair rate of IHT, but randomly having certain pots that sit outside it is madness.
@@kw8757decent chance he wouldn’t have been affected. Less than 10% of estates pay it…. I’ve never understood the hatred of IHT (and I am someone that stands to inherit quite a lot)
@@kw8757 Both dead and only got £35k total and I have no dependents. So, for me it's the best tax raise it to the roof...
Instead of constantly taxing working people, it’s time they taxed companies based on UK sales. Companies like Apple use loopholes to pay minimal tax, and then when they do have tax to pay, funnel profits via Ireland to minimise the cost. A UK sale should mean UK tax, no ifs or buts, no loop holes. Don’t like it then don’t sell in the UK.
With tax at a seventy year high they are increasing tax ?
I live in the Isle of Man, we don't have CGT or inheritance tax. I was talking about the likely UK CGT increase today with my financial advisor, I was saying he could be getting a lot of enquiries soon. He said they have already started 😂
Judging by the soaring property prices in the U.K. I’m sure at least 40% of the population now fall into the inheritance tax threshold.
Hi @wulfsorenson8859 only about 7% of deaths in the UK result in any inheritance tax being paid. Once you combine a couple's allowances after the death of one partner the threshold for estates to start paying IHT is £1 million. Paul Johnson talks about this in his excellent book "Follow the Money". Thanks, Ramin.
@@Pensioncraft That’s and total and utter lie and why are you focusing only on couples??? When the boomers die off well over 40% of the population will be hit by IHT. Especially in the south east. Average property price there easily fall into that bracket already. Labour are now discussing increasing it to 55% and removing the £175k relief for direct descendants. They want to prevent the boomers passing on their wealth so their children will NEVER own a home. You will own nothing and ‘be happy’.
If they increase stamp duty then from what date it is likely to be effective?
Very clear, objective and informative! Thank you
Thank you @davidandhelen4657! Ramin.
What are your thoughts on the private school VAT likelihood of happening?
Hi @Blackfire-Five I believe it's very likely that this will happen in 2025 educationhub.blog.gov.uk/2024/09/06/vat-private-schools-everything-you-need-to-know/ Thanks, Ramin.
Good estimation of the possibilities, do you think a tax on free assets, like clothing glasses entertainment will be in an ultra low catagory
They need to find £22bn to collect dirt and store it in other dirt.
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
It will be interesting to see if they ever let the Full State Pension exceed the Basic Rate Tax Threshold. It happens with some SERPS pensions already.
I’m looking forward to the budget, merely to end all the speculation and fear mongering.
Mercifully, this Budget won’t affect me as I escaped the U.K.
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.
This has to one of the most idiotic policies as now there will be an exodus of students from private schools into the already struggling and rubbish state schools. Talk about penny wise and pound foolish! 😂
Unfortunately I don’t think that an ISA cap will be unpopular matters as it doesn’t seem they care about popularity.
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.
There are / were lots of working people with large savings. So much so that there has been an exodus of people around 60 from where I work. I find it annoying that they aren't paying National Insurance while trying to work out how to burn through their £200K Tax Free Lump Sums.
@@MrDuncl lol you think they have too much money? Or they should pay NI on pension income or not have tax free limp sums?
@@jeffocks793 I actually do think they should pay NI on Pension Income until they reach State Pension age. Do you think it is fair that that a 65 year old earning £20000 a year pays NI while 57 year olds blowing their tax free lump sum on £20000 motorbikes, £60000 SUVs, and cruises don't ?
@@MrDuncl well, I understand what you are saying. But I'm not sure we should establish a general principle based on inadvisable spending by a few. If they spent the money on a long term care policy, or paid of a mortgage, or bought a further annuity would that be acceptable? Buying SUVs etc seems wasteful to me but people plan their finances differently to me. I wouldn't want to be taxed further because some people are profligate with their lump sums. On the other hand I can see a case for paying NI into retirement if it can be fully planned for in advance. That is, we can't just decide to cream off £££ from people's pensions if they had no opportunity to factor it into their advance pension planning.
@@jeffocks793 If they spent the money on a long term care policy, or paid of a mortgage, or bought a further annuity would that be acceptable?
Yes, Yes, and Yes.
If you hadn't realised the examples I gave are real ones of younger colleagues who have now retired. According to one "It is essential to spend all your pension before you get dementia" .
Yes I could retire now and do the same thing. However, I wouldn't expect any sympathy if I ended up poor at 80. In a conversation with a different colleague we agreed how annoying it is when people ask "Are you still working ???" with a tone that implies you should see a mental health specialist.
2:37 Curious that the modern day rise in debt to GDP lines up with start of austerity. I know there was another event that happened then too and that the UK government response to that event was austerity but I wonder how many other comparable nations debt to GDP graphs match ours?
I am looking to purchase a second property as the main house & to let one I am living in at the moment.will I pay 5%.
Surely they wouldn't be daft enough to cut the CGT allowance to ZERO, otherwise people who made a £10 gain would have to file.
Would be a silly idea to remove it all. Will follow dividend tax or personal savings allowance of 500 or 1k.
lol imagine having to pay £4.50 on £10 profit.
You need to be specific and make it clear what relates only to England.
For example stamp duty
great video as ever Ramin, keep up the great work bud
Much appreciated @chqshaitan1
I hope council tax doesn't change We are over 3k a year already it's ridiculous
I wouldn't mind but the shocking state of roads, the more frequent flooding (because they stopped cleaning drains and other water management), the terrible condition and value of leisure facilities, not enough police or ambulances, library only open 3 half days a week etc etc. Id pay more tomorrow but i know full well none of the above would change.
Well explained as ever Ramin :)
People with "broader shoulders" do not pay inheritance tax. They just put their properties and assets in a Trust and use that to pass the wealth on to their relatives.
That's how the Duke of Westminster inherited £9 billion without paying a penny inheritance tax.
My prediction, which covers both Pensions and EVs is that they will get rid of Salary Sacrifice.
Removing it for pensions is really bad IMO. Remember you get taxed when you draw your pension. This would be like a double dip albeit decades apart. They should keep it to encourage saving. Too many do not save enough.
I can see salary sacrifice going for EVs. Really it's subsidising people with money to buy new cars. Which doesn't sit well, even though the goal is to help get electric cars into the mainstream. Part of the problem I see with the scheme is the lease companies just pocketing that relief.
On the flip, removing it would almost certainly blow the arse out of the EV market. And that's on the skids as it is! Won't do their net-zero and no ICE by 2030 any favours.
Good. Let EVs stand in a free market on their own "merits"
Excellent .. have also set up trading 212 👍
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?
Hi @JD83000 I think it may be brought closer to income tax that is taxed at the higher rate - it's already taxed at the basic rate of income tax (20%). Thanks, Ramin.
Those dispensing the pain will be immune from it.
Good content, well delivered - thanks.
Much appreciated @julianwinn4502
Construction skill shortages are self inflicted I worked construction and year on year they shipped in migrants lower my wages to the point I was earning less than someone in a factory(when u add on the 3 hours a day travelling and parking fees to be near a site so many of us left and now u have people unqualified doing crap worm living 9 to a house building houses bought up by rich Indians
A question for Ramin. Why was the Pension Commencement Tax Free Lump Sum introduced in the first place? Neither Google or Bing gives an answer, just loads of details on how to use it.
They stole all the money. Clamp down on benefit fraud!
What is the tax position of a free fractional share received from Trading 212?
If the reports are to be believed, Ms Reeves is finding 1bn to build new schools and social housing. She should be investing in up keeping and weather proofing the schools we already have, the social housing we also already have that are falling to rack and ruin and the same with our hospitals. Who is the government building the houses and schools for? Hopefully and rightfully the homes will be for our homeless veterans and British born citizens, but don’t hold your breath!
It’s obvious: they will raise taxation rates on dividend income to income tax levels. Not a tax on working. They may also charge NI on dividends too. Painful. The treasury has shown that raising CGT would mean less tax is raised than now.
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...
Couldn't agree more with cutting overseas aid Javi. Since the country cannot balance the books the UK is effectively borrowing the money to give away to other countries, some of which have space programs and are endemically corrupt. It is good to be generous but the truth is we as a country can't afford this.
Overseas aid is a cheap way to boost soft power and help the global South to develop, hoping to prevent massive swarms of migrants in the future
@@obersoth09 The soft power obviously isn't working. The overseas budget should be spent on our military. More personnel, more weapons.
CGT at income tax rates, (or with a zero allowance), without indexation relief would be a monumental disincentive to investing in equities outside a SIPP or ISA. Without broad equity investment there will be a lack of capital investment in the very things that companies might invest in to increase productivity.
Unless CGT is broadly fair, (i.e. taxing real gains not inflationary gains), then it risks raising next to nothing as behaviour will change and nobody will sell to trigger a gain, or will invest going forward in instruments that are CGT exempt such as gilts. Since, (currently), death does not trigger a CGT calculation, surely anybody who can, will simply adjust and hold any paper CGT liabilities 'til the grim reaper appears, or, a new government with a different approach. The reality is that a typical buy to let bought 20 years ago will have appreciated in value at a headline rate that looks great, factor in CPI inflation, and it actually looks a poor investment compared to say equities. Sell post October 30th, and without indexation relief, after CGT was levied, it would become a significantly negative investment in real terms, and nobody unless desperate would sell.
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.
Rather than politicians patronising us by telling us we should be giving up our avocado toast how about the state goes on a diet? The state has become too big and too greedy of late. Just look at countries like Singapore, the state is a fraction of the size of the UK and taxes are (funnily enough) a fraction of what we pay in the UK, just 23% of the top rate? How does that work then?
When will the budget changes come into effect? Next financial year (Apr2025)? In that case, one could wait until after the budget is announced and then sell any capital gains before a change in tax comes into effect. When are budget changes usually implemented?
Hi @Christopherfife usually they come into force in the next tax year. If they are changes that require planning, such as pension changes, often they come in with a lag. I suspect a Capital Gains Tax change would come in during the next tax year as people selling beforehand would still increase revenue albeit by less than if they delayed the sale until after the change. The government needs tax now to spend on their growth plan and this would still achieve that. Thanks, Ramin
What would be the repercussions if Govt simply decided to pay interest on the national debt at a lower rate - saving 10’s of billions that way. Have heard it said that such lower rates are used in the Euro zone and in Japan.
If the UK govt weren't in the pocket of the private banks they would stop paying interest to said private banks for their LEGAL REQUIREMENT to hold reserves with the BoE. Would save us £30 billion immediately and as you say - Japan and the ECB both have a tiered capital system which does much the same. its ridiculous that we taxpayers are literally paying for private banks to profit just to keep those irresponsible scumbags who blew up the economy in 2008 honest.
I think the threshold for inheritance tax is frozen until 2028
Need to reform public sector pensions.. change to defined contribution and in line with private sector
Pensions are a mugs game buy gold
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.
Sorry, need more stamp duty on property.
I don’t think you understood his valid point. Raising stamp duty would incentivise people to stay in their large family homes long after the children and husband have left/died because the hit of CGT and STLT means they would not end up with any additional capital just a smaller worse house and a big tax bill for the hassle …… therefore stagnation. Easing SDLT would obviously make this worse
@@discostu2 stamp duty does not apply to homes under 250,000.
Labour has a tough job and their messaging has not been good so far - the public polls reflect that - raising tax is unpopular, but expected, HOWEVER not investing it into smth that would allow growth and speaking about austerity is abysmal. I can count on one hand the projects that could actually give meaningful growth like GB Energy, but the news on austerity measures are much more plentiful. Here's hoping its a political strategy of doing the most unpopular things first...
The UK needs investment in all sorts of tech companies, from space to medical...these are the high productivity, high margin sectors.
Thank you very helpful!
Glad it was helpful @thewrightoknow
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
Yeah definitely wouldn’t easiest just to reverse those cuts and even add a penny on basic rate income tax
Yep they should do that. The winter fuel allowance was a bad policy though. The tories have diverted too many resources to the old and it is intergenerationally unfair.
@@Cassp0nk I don’t think we should fall for the “inter generational unfairness” narrative, the divide is wealth, not age Ie you can be young and broke, but if your parents have money, you’re basically fine, but if you’re young and broke but your parents are also broke, then taking their WFA isn’t going to help you.
@@Cassp0nk so I’ve heard similar arguments re the triple lock . For some inexplicable reason the left seem to think pensioners are all wealthy and spend time playing bridge , well we’re not . Most of us struggle these days . Millionaires should probably be exempt the same applies to family allowance, do posh and beck’s really need it ?
The younger working population though will benefit eventually and will probably need it , thank goodness for compounding.
It was introduced for a good reason , and things haven’t changed that much just a bit worse .
Oh and it was introduced by the the Labour Party and the triple lock introduced by the coalition.