The Autumn Statement 2023

[jamesbrown]

I'm inclined to agree. But, genuine question, who does represent contractors right now? There are Labour murmurings of a 'wealth tax'. Rumours of equalising dividend tax with income tax, which would effectively destroy contracting. I'm not sure where the Lib Dems stand on anything really. I know they want to legalise cannabis which sounds eminently sensible from an economic point of view.

It seems SMEs and PSCs don't have much of a home at the moment. Tories are pro big biz because their C-suite mates lobby them. Labour appeal to their base which has never traditionally been PSCs / SMEs. And Lib Dems are seemingly rudderless.

Let's all vote Green?

Realistically, no party that has a serious chance of governing. I’d say the chance of a wealth tax is quite low, especially one that impacts contractors (we’re not that rich). The chance that all forms of income are taxed the same way is higher, but quite hard to introduce. The chance that dividend taxes are raised to income tax levels and BADR is removed are both extremely high and both have been trailed by Labour at various points in the recent past. They are both quite easy to implement. On the other hand, the chance that Labour resembles a competent gov’t is also higher. The Tories require a kicking.

[malvolio]

Realistically, no party that has a serious chance of governing. I’d say the chance of a wealth tax is quite low, especially one that impacts contractors (we’re not that rich). The chance that all forms of income are taxed the same way is higher, but quite hard to introduce. The chance that dividend taxes are raised to income tax levels and BADR is removed are both extremely high and both have been trailed by Labour at various points in the recent past. They are both quite easy to implement. On the other hand, the chance that Labour resembles a competent gov’t is also higher. The Tories require a kicking.

Don't get hung on on dividends. The bulk of the service economy, most corporate investment and almost all pension and similar funds are paid by dividends. We've seen the disastrous impact of Brown's cancellation of tax relief on pension funds which actually reduced tax income from them to HMT so hopefully nobody else will be that stupid. Our use of divis to avoid NICs is trivial in comparison to the pressures to leave them alone.

[Andy2022]

Well, I think the party is over.

Additionally, when you search for IR35 on Twitter/X, you will find that 10 out of 10 comments are complaints.

Yeh but most of them seem to purposefully confused having a PSC with being self-employed which have completely different taxation approaches

Raising the dividend tax to the level of employers NI seems the most equitable way of getting rid of IR35 to me

Along with merging employees Ni into income tax so earned and unearned income are treated the same

[malvolio]

Yeh but most of them seem to purposefully confused having a PSC with being self-employed which have completely different taxation approaches

Raising the dividend tax to the level of employers NI seems the most equitable way of getting rid of IR35 to me

Along with merging employees Ni into income tax so earned and unearned income are treated the same

IR35 is nowhere near the front of HMG's thinking, regardless of party. Specific action is not going to happen.

Putting NICs with Income Tax is a non-starter. The UK's 12.5m pensioners don't pay NICs for one thing, and no chancellor is going into the history books as the one who raised Income Tax by 20%.

[56samba]

I'm not sure where the Lib Dems stand on anything really. I know they want to legalise cannabis which sounds eminently sensible from an economic point of view.

Thats my 'Plan B' sorted then.

[Andy2022]

IR35 is nowhere near the front of HMG's thinking, regardless of party. Specific action is not going to happen.

Putting NICs with Income Tax is a non-starter. The UK's 12.5m pensioners don't pay NICs for one thing, and no chancellor is going into the history books as the one who raised Income Tax by 20%.

Oh I know that but when everyone's clamouring for the state pension to be means tested then reducing NI and increasing Income Tax is a far lower cost way of doing it

Simplifying the tax system is a win for everyone (except for tax advisors), I'd do things like increase NI over 50K and scrap the taper on Child Benefit, bring down the start of the 45% band and leave everyone with their personal allowance to avoid the 100K-125K tax trap

Thing is as much as the Tories talk about reducing bureaucracy what they really mean is removing things like employment rights, environmental protections rather then removing real bureaucracy

[jamesbrown]

Don't get hung on on dividends. The bulk of the service economy, most corporate investment and almost all pension and similar funds are paid by dividends. We've seen the disastrous impact of Brown's cancellation of tax relief on pension funds which actually reduced tax income from them to HMT so hopefully nobody else will be that stupid. Our use of divis to avoid NICs is trivial in comparison to the pressures to leave them alone.

Right, they’re so sacrosanct that a dividend tax has been introduced and increased and an allowance introduced and cut multiple times, all by the Tories. Meanwhile, Labour has explicitly stated that they want to normalise the tax treatment of different forms of income. I would describe your analysis as “optimistic” .

[malvolio]

Right, they’re so sacrosanct that a dividend tax has been introduced and increased and an allowance introduced and cut multiple times, all by the Tories. Meanwhile, Labour has explicitly stated that they want to normalise the tax treatment of different forms of income. I would describe your analysis as “optimistic” .

I agree a dividend tax has been imposed on monies taken for personal income by the Tories, so they didn't have to increase Income Tax as per their manifesto. That was a major irritant rather than a major imposition. However it was Labour who applied it to pensions funds by cancelling their exemption to such taxes, ruining quite a lot of very significant things in the process.

I may be over-optimistic about Tory plans, but I have seen nothing in the last 60 years to persuade me to be optimistic about Labour's.

[vetran]

Camamoron wanted to "Hug a hoodie"

Jezzy was quite happy to hug terrorists.

Sir Kier's team want to hug Hamas and are busy resigning. Labour look great as the choice for the new generation.

[WTFH]

...
I may be over-optimistic about Tory plans...

We just need to give them another chance, eh?
They've only had 13 years, that's not long enough.
Give them another chance.
Everyone will be worse than them.