Horrors of their first budget.

[dsc]

Ok so what was good about this budget? How does it grow our economy?

It saves the gov a tulip ton of money due to extra NI and not unlocking tax brackets. Doubt it was ever about growing the economy, I'd say the plan was to plug the big whole in the treasury more than anything and to have something to throw at the NHS (which won't help anyway).

For people with one-man-band ltds I can't see much bad in it though, the market is already absolutely thrashing ltds, I'm not crazy about the extra £600 NI (or whatever it is), but it does not matter much in the current job market.

[oliverson]

It saves the gov a tulip ton of money due to extra NI and not unlocking tax brackets. Doubt it was ever about growing the economy, I'd say the plan was to plug the big whole in the treasury more than anything and to have something to throw at the NHS (which won't help anyway).

For people with one-man-band ltds I can't see much bad in it though, the market is already absolutely thrashing ltds, I'm not crazy about the extra £600 NI (or whatever it is), but it does not matter much in the current job market.

Agree with this but also would add they haven't changed a thing regarding BIK on EV's. Another Tesla lease for me then when this one expires next year.

[BolshieBastard]

It saves the gov a tulip ton of money due to extra NI and not unlocking tax brackets. Doubt it was ever about growing the economy, I'd say the plan was to plug the big whole in the treasury more than anything and to have something to throw at the NHS (which won't help anyway).

For people with one-man-band ltds I can't see much bad in it though, the market is already absolutely thrashing ltds, I'm not crazy about the extra £600 NI (or whatever it is), but it does not matter much in the current job market.

How on earth does it save the Government 'a ton of money' when the Government itself states it is borrowing tens of billions pounds more?! And both Stasi and Reeves have said it's a Government to grow the economy.

As with all increases, the extra is only a peak projection not actual extra. Why, because people who a due to pay the extra mitigate it by either not taking on extra staff, laying off some existing staff or just closing their business altogether.

[youngguy]

Don't quote me on it but I believe the answer is yes and yes. I currently salary sacrifice a significant portion of my inside IR35 income and make occasional one-off (10k ish) director's pension contributions from a side hustle I still have for both me and the wife, which is entirely deductable. I have been told I can make up past 3 years from either source, although some of those years will be at the old £40k limit.

edit: if you're asking can 2x companies contribute 60k each then no, £60k is a personal limit.

Thanks, I've asked the accountant so will update here on their view. My planned approach is the same as yours - hit the 60k (or 40k from previous yrs) from a combination of brolly salary sacrifice and the rest direct from the ltd

[vetran]

How on earth does it save the Government 'a ton of money' when the Government itself states it is borrowing tens of billions pounds more?! And both Stasi and Reeves have said it's a Government to grow the economy.

As with all increases, the extra is only a peak projection not actual extra. Why, because people who a due to pay the extra mitigate it by either not taking on extra staff, laying off some existing staff or just closing their business altogether.

Plenty of business owners will think stuff it I will close before I go bankrupt and take BADR & CGT rates while they are still low.

[Snooky]

5, No, you will not admit you were wrong. You's just slope off into a corner or hope no one raised the point you were wrong '5 years ago' and probably revert to your favourite saying, whataboutery?

You're completely mistaken about that. I'm very open minded about pretty much everything, including politics, and part of that is that you sometimes have to accept that you've been proven wrong about something and be big enough to admit it. Otherwise you're not really open minded. I've done it plenty of times in the past and am quite willing to do it in future. It's kind of how a civilised adult should behave, though not many do.

[dsc]

How on earth does it save the Government 'a ton of money' when the Government itself states it is borrowing tens of billions pounds more?! And both Stasi and Reeves have said it's a Government to grow the economy.[...]

If you keep tax brackets at the old levels but people earn more (which apparently they do), they pay more tax automatically, so that's a tax increase without increases taxes directly. Same goes for NI, just pushed towards employers. On paper this looks like increasing gov tax "intake" but the extra NI might cause issues like less employment, so not sure how that works out.

As for growing economy...not sure where the growing is meant to happen, but the budget seems to make sense from a gov point of view (ie. more money).

[sadkingbilly]

Plenty of business owners will think stuff it I will close before I go bankrupt and take BADR & CGT rates while they are still low.

no they won't.

[Tinkerbell3]

Is that it? No big changes to ISAs or SIPPs? I am starting to think us genuine outside IR35 contractors have just dodged a bullet.

I'm not so sure we've dodged a bullet. Employer NI even before this increase is a SIGNIFICANT cost. I know this first hand. 😅
Costs aside - I am getting a sense that employers/ businesses are feeling disgruntled towards the government.
This may well give rise to some backlash ... and because of our relationship with industry ... we will feel the ripple effects/ after shock ...

The cost of everyday basic/ essential items are still rising ... shops are closing ...
I am seeing an INCREASING amount of For Sale & Sold signs ... Sale prices very reduced ... No forward chain etc.
Yet ... these are not really making headline news in the media ... This can't all be inflation/ Ukraine war ...

As for public sector needing so much money .... They are always 'crying poor ' - yet there's a LOT more to their financial situation/ resource issues than they let on ... but that's a story for another time.

I guess though it's a case of ... let's wait and see what happens in/ around April 2025.

[Andy2022]

Same goes for NI, just pushed towards employers. On paper this looks like increasing gov tax "intake" but the extra NI might cause issues like less employment, so not sure how that works out.

Changes to NI are likely to encourage employers to have one person on a 30 hour / week contract rather than 2 on a 15 hour week contract

Which in theory reduces employment but as we’re practically at full employment then it actually makes workers available for other jobs

Increasing the cost of employment should also drive investment in productivity - automation, training etc which would be good for the economy too as too many firms rely on low paid workers rather than investing