Official Summer 2015 Budget Thread

[jamesbrown]

Only the 'right kind' of people.



Well to clarify, I'm not saying that PSCs were not a target, as it does look as though it was very carefully orchestrated (and if you think about it, it could work very well indeed with the new agency reporting requirements), just that they do not appear to be the sole target of the move. My thinking is simply that whilst this will not impact "regular investors", as you put it, it certainly will impact those who have substantial holdings in shares. Coupled with a reduction in the CT, it does look as though it is an incentive to companies and their owners to reinvest the profits rather than draw them out. My assumption is predicated on the dividend drawdowns of contractors being dwarfed by those of investors with large holdings in shares, which may be wrong.

No, agreed, it wasn't purely about PSCs, but they were an important part of the picture IMO. Osborne has always been very canny about the optics of what he's doing (i.e. w/r to fecking over certain interests), and this is no exception with the news flow over the past few years on public sector contracts, incorporation for tax purposes, contractor tax schemes etc.

[Zero Liability]

It means that he can cut tax credits and those people still be paid, probably about the same or maybe even less in total, but in any case burden will be shifted from taxpayers to companies who had cheap taxpayer subsidized labour for way too long.

It all depends on the individual worker's productivity. I see it as a token move to just keep people from whining about the cuts to tax credits, as in reality value productivity is far more determinative of whether you will be hired or not (or kept on), than some number the government mandates. I'd like to see some number crunching to see what the net effect is if apprenticeships do pick up pace, because they're also subsidised, but I think they're a lesser evil than just topping up poor pay at the taxpayer's expense as there is some career skill improvement involved (notionally, anyway.)

What will happen with PSCs? I reckon people will start closing down companies to claim ER at 10%, so the end result would be that they feck ER in some way very soon.

Yeah, hopefully not too soon.

[AtW]

No, agreed, it wasn't purely about PSCs, but they were an important part of the picture IMO. Osborne has always been very canny about the optics of what he's doing (i.e. w/r to fecking over certain interests), and this is no exception with the news flow over the past few years on public sector contracts, incorporation for tax purposes, contractor tax schemes etc.

Osborne said very clearly - he reduced corp tax by 6%, and he now wants it back (10%). Does not affect foreign investors, offshore trusts etc. So what's not to like?

FFS, cutting down top rate of tax by 5% and then adding more than that, FFS.

[darmstadt]

So, a boon to recruiting more British nurses eh?

Budget 2015: Public sector pay rises to be capped at 1 per cent for another four years, George Osborne announces - UK Politics - UK - The Independent

Tories plan to kick 30,000 nurses out of Britain because they weren't born here - Mirror Online

Nurses to be among first affected by plan to cut skilled migration | UK news | The Guardian

[Zero Liability]

Osborne said very clearly - he reduced corp tax by 6%, and he now wants it back (10%). Does not affect foreign investors, offshore trusts etc. So what's not to like?

Indeed. A massive middle finger to UK investors, of course. However, if you are not drawing down dividend income in the UK, the CT reduction will be a very nice reacharound.

[WordIsBond]

There is fundamentally no reason why contractors should be able to pay less tax per £ earned than permies, this is a perk of the system not an entitlement.

There is fundamentally no reason why some cars should get hit with more road tax than others.

Unless you believe it is the role of government to encourage certain behaviours. Then, you have to decide which behaviours should be encouraged.

If it is beneficial to the economy to have a skilled and flexible workforce to aid industry in times of high demand, and have the workforce themselves be willing to absorb risk rather than demanding employment protection, then government might want to encourage it.

If contractors are a scourge on society and not helpful to industry, then it probably makes sense to have a punitive tax regime.

Since industry appears to like having contractors available, it probably makes sense to assume they are beneficial to the economy. If so, then having a tax regime that encourages people to take the risk of leaving employment protection is probably a good idea.

[WordIsBond]

Because now that the principle of a separate dividend tax charge is here, it is sure to be a target in future budgets for further increases...

From the statement, 1.189:

These changes will also start to reduce the incentive to incorporate and remunerate through dividends rather than wages to reduce tax liabilities.

Emphasis added. It won't be a shock of the dividend tax rates go up in the autumn or next March.

[Zero Liability]

There is fundamentally no reason why some cars should get hit with more road tax than others.

Unless you believe it is the role of government to encourage certain behaviours.

I'd be much happier if they just treated tax as their revenue source to cover spending for the government's basic functions, rather than these conceited attempts at socially engineering outcomes, or worse yet, bread and circuses.

[darmstadt]

[TheLordDave]

I really thought an entirely conservative budget would support our way of working. I have been harping on about thatcher for years and waiting for a decent conservative government to come in.