Spring Budget 2017

[jamesbrown]

So much for discouraging tax-motivated incorporation. "Oh, let's tax the guys who aren't incorporated even more."

Which is precisely why there's zero chance that the budget will go without measures that do address the perceived "tax gap" for PSCs as distinct from sole traders, because that's where the gap is greatest according to the Chancellor, the IFS and others. It may be as simple as a comprehensive review and consultation, with measures to be announced at the Autumn Budget, or it could be coupled with some interim measures. However, the Spring Budget will definitely mark a continuation of the closure of the perceived tax gap. In order of most likely to least likely (and not all mutually exclusive), I would say:

• Increase in Class 4 NI, as leaked (could be a trail balloon to gauge pushback, I suppose)
• Review of taxation of PSCs and sole traders, with measures to be announced in the Autumn Budget.
• Immediate increase in dividend tax of, say, 2.5%
• Review of taxation for the Autumn Budget, as above, but with substantive/preferred options flagged, such as PS rules in the private sector or even look-through
• Substantive measures predetermined (i.e. sham consultation) with a target date (e.g. Autumn Budget)

I suspect they'll leave the low-earning self-employed to the courts, as they seem to have woken up recently. That said, if you've watched any Select Committee hearings recently (e.g. Work and Pensions), you'll know that there's cross-party support for doing something to prevent the exploitation of low-paid workers, perhaps even something statutory on what constitutes self-employment. The reality of that is complicated though.

[heyya99]

If changes are announced on Wednesday, when are they implemented? Can it be any time or must it be before a new tax year starts?

[jamesbrown]

If changes are announced on Wednesday, when are they implemented? Can it be any time or must it be before a new tax year starts?

Depends on the change. For example, taxes can be collected with immediate effect, by convention, and don't need to wait for the passage of a Finance Bill into an Act. More info here:

The Budget and Parliament - UK Parliament

[eek]

Depends on the change. For example, taxes can be collected with immediate effect, by convention, and don't need to wait for the passage of a Finance Bill into an Act. More info here:

The Budget and Parliament - UK Parliament

+1 its typical for some taxes to be implemented immediately just to remove the incentive of people rushing things through.

It was also upto some point in the 1990's (possibly 97) for tax rate changes to be announced in March to start 3 weeks later. Nowadays things are usually announced for the following year (i.e. the things being announced on Wednesday will in many cases be for April 2018 onwards).

Going forward with the budget moved to November I think there will be a 6 month announcement period rather than the 12 months we often currently see.

[ruasonid]

At this rate, I may be right behind you. I WFH, so the only thing that ties me here is family and friends. I contracted overseas for 10+ years before 5 years ago, so it was wearing thin for them and me, but that was 5 years ago...

Also considering my options for the future. Are there any locations that look viable purely from a financial perspective (other factors, lifestyle, etc. are more a personal choice)?

[jamesbrown]

Going forward with the budget moved to November I think there will be a 6 month announcement period rather than the 12 months we often currently see.

Agreed. It always used to be in the Autumn. I think Brown introduced the Spring Budget, right? Pure politics, which Gidiot was obviously quite happy to promulgate. Autumn makes sense. It's just irritating that a multi-budget year happens to coincide with HMT having a hard-on for contractors

[jamesbrown]

Also considering my options for the future. Are there any locations that look viable purely from a financial perspective (other factors, lifestyle, etc. are more a personal choice)?

Very difficult to answer, as it depends on your personal circumstances. Denmark, perhaps, as they have an expat scheme, which amounts to about 36% all in (~30% plus social security) for five years IIRC. There are obviously places closer to home if you WFH and aren't tied to the UK for family reasons (Isle of Man etc.), but none of them are quite as appealing as they might initially seem. You also need to bear in mind that, once you've become a UK resident, most forms of unearned income (and sometimes earned income) are now very difficult to have taxed outside the UK unless you're really planning to cut all ties and leave for a long period (five years for dividends, capital gains, and even salary/wages under certain anti-avoidance provisions...).

[b r]

tbh a better approach to the whole tax and NI would be to start again...

- abolish NI and it's 'rules'
- have a personal tax code for all citizens
- have a single level of income tax that covers all INCOME for all citizens, whether PAYE, pension, benefit, dividend, inheritance etc
- single level of employment tax, calculated on all employment paid
- the tax code at whatever the minimum wage is (standard 'adult' rate, so currently circa £12.5k)
- set the tax rate at whatever percentage is needed, but never more than 50%

And cut the UK tax back down to a single book rather than a shelf

Thoughts?

[MrMarkyMark]

tbh a better approach to the whole tax and NI would be to start again...

- abolish NI and it's 'rules'
- have a personal tax code for all citizens
- have a single level of income tax that covers all INCOME for all citizens, whether PAYE, pension, benefit, dividend, inheritance etc
- single level of employment tax, calculated on all employment paid
- the tax code at whatever the minimum wage is (standard 'adult' rate, so currently circa £12.5k)
- set the tax rate at whatever percentage is needed, but never more than 50%

And cut the UK tax back down to a single book rather than a shelf

Thoughts?

Sounds great

You are Gawkes illegitimate son and I collect my CUK money off tokens

[Bluenose]

he won't have to tweak current tax policy too much as a percentage our tax take from personal taxation is historically low compared to our peers, this is why the Swedish comparisons and the like do not stick.

I am hoping that the changes only relate to rolling out the changes in the public sector IR35 status etc that we have in the other thread into the private sector. If he does that, I am not affected anyway.