Budget 2011

[AtW]

tax credit on dividends will probably stay at the existing rate.

It might go down as corp taxes are being reduced.

[centurian]

While I have no crystal ball, it's pretty obvious that if these plans go through, then paying dividends will effectively be subject to 32% taxation (or whatever the combined tax+ni rate is).

That's why IR35 will be abolished - it will be rendered irrelevant.

Ltd may still be better due to
* Being able to retain earnings and smooth out earnings to avoid higher rate taxes - and there is some justification for freelance workers to be able to do this
* What happens to employers NI - this is the real kicker - and the devil will definately be in the detail.

[doodab]

While I have no crystal ball, it's pretty obvious that if these plans go through, then paying dividends will effectively be subject to 32% taxation (or whatever the combined tax+ni rate is).

That's why IR35 will be abolished - it will be rendered irrelevant.

Ltd may still be better due to
* Being able to retain earnings and smooth out earnings to avoid higher rate taxes - and there is some justification for freelance workers to be able to do this
* What happens to employers NI - this is the real kicker - and the devil will definately be in the detail.

I can't see a blanket increase on dividend taxation going down very well. I think we might end up with distinct "wage" tax and "income" tax or something like that. I also get the feeling that they might actually let it work in favour of people like us who are prepared to deal with a lack of job security in return for providing flexibility, with the view that this is a stepping stone to creating the economy of the future. A £60-100k a year contractor makes a greater contribution to the public purse than he would as a £45k a year permie and so it ought to be encouraged.

They need to be careful how it's set up or there is a risk of kickstarting a round of 10% payrises that will cause all sorts of headaches.

I am actually hopeful we might see a bit of long term vision at work. Not that hopeful though

[doodab]

Some interesting forecasts here:

Budget 2011 checklist: the key points to watch out for - Telegraph

I particularly like the fact that science and fixing potholes are deemed to be about equally important.

Science – A £100m investment for science is expected
Pothole fund – There is talk that a £100m will be earmarked to repair potholes.

[minestrone]

I was wondering why there was no Budget thread then I noticed it was in the nose bleed section where my eyes rarely glance across.

[MrRobin]

I was wondering why there was no Budget thread then I noticed it was in the nose bleed section where my eyes rarely glance across.

I thought that too... Funny how the act of ensuring a thread is always at the top (sticky) means I never see it.

[OwlHoot]

So the cuts have to be done carefully so by the time of the next GE the Tories can win.

The best time for ruthless cuts is now (or even better would have been last year), to give people time to adapt by the next general election.

"Grab a nettle lily handed, and 'twill sting you for your pain." That's what Cameron & co will find out the hard way if they don't stop pussy footing around!

[OwlHoot]

I also get the feeling that they might actually let it work in favour of people like us who are prepared to deal with a lack of job security in return for providing flexibility, with the view that this is a stepping stone to creating the economy of the future. A £60-100k a year contractor makes a greater contribution to the public purse than he would as a £45k a year permie and so it ought to be encouraged. ..

Sorry, doodab, but ROFL

Of course that's how they _should_ think. But they don't give a flying stuff about that.

Treasury civil servants (and EU bureaucrats) loath and despise the self employed and one-person companies - As far as they are concerned, we're mavericks and tax dodgers all, and would be far better off being forced into larger companies or collectives as employees so the Government could apply more "efficient" pyramid-style tax gathering schemes.

It's hard for us to imagine; but that's how they think - They care nothing whatever about enterprise, only about procedure (and "fairness" of course, that all workers should be considered the same from a tax standpoint).

[doodab]

Treasury civil servants (and EU bureaucrats) loath and despise the self employed and one-person companies - As far as they are concerned, we're mavericks and tax dodgers all, and would be far better off being forced into larger companies or collectives as employees so the Government could apply more "efficient" pyramid-style tax gathering schemes.

It's hard for us to imagine; but that's how they think - They care nothing whatever about enterprise, only about procedure (and "fairness" of course, that all workers should be considered the same from a tax standpoint).

I don't think that's actually true to be honest. I'm sure there are some that think like that but there are a fair few, esp in the wider EU, who have an altogether more Thatcherite view of the value of entrepreneurial activity. I am hoping the current government are among them.

[cailin maith]

I would very much like to smack Danny Alexanders Ugly Smug Face!

Ugh... just seeing him sat there makes my blood boil.