Reply to: The Official Budget 2021 thread

[ladymuck]

Andy Chamberlain of IPSE was on R4 Money Box covering the various measures and impacts from the budget. Only a brief segment of a couple of minutes. Good to see IPSE are still 'urging the government' to do stuff...

I like Andy and have a lot of time for him. The CC meetings where he gave updates were always the more interesting and engaging.

[AtW]

“The “biggest business tax cut in modern British history” is at risk of tax avoidance and fraud, Rishi Sunak has been warned.

The Chancellor’s corporate tax “super deduction” - one of the few surprises in this week's Budget - could be manipulated by bosses seeking hefty tax breaks.

The super deduction allows companies to deduct 130pc of the value of plant and machinery from profits.

The Office for Budget Responsibility said this would boost business investment by a tenth, or £20bn.”

https://www.telegraph.co.uk/business...per-deduction/

It was Rishi’s idea

[AtW]

“Experts said that the revenue forecast was overly ambitious. Treasury documents showed it was based on a “static costing” that assumed no change in the expected business population. “That does not fully take into account behavioural change,” Sanger said.

Helen Miller, deputy director at the Institute for Fiscal Studies, said: “There is a lot of uncertainty. I suspect they will get less than that £17 billion [forecast in 2025-26].”

Roy-Chowdhury said: “Banks have begun moving operations because of Brexit. This will give them another nudge. Dublin has half the rate.””

https://www.thetimes.co.uk/article/c...rise-2vdq8vnd9

[AtW]

But not anti-body testing

[ladymuck]

One thing I missed, that I just picked up from the HMRC newsletter I've just received is:

Income Tax exemption for employer-reimbursed coronavirus antigen tests for tax year 2020-21 and 2021-22: This measure will continue the Income Tax exemption for payments that an employer makes to an employee to reimburse for the cost of a relevant coronavirus antigen. There will be no Income Tax liability for the employee or employer.

[mattster]

Divi rate only matters really to company directors or major shareholders. It may be a double tax to contractors, but not to corporations we want to attract.

So who decides where to set up, then?

[AtW]

Divi rate only matters really to company directors or major shareholders. It may be a double tax to contractors, but not to corporations we want to attract.

Corp tax and divi rates matter to Pension funds that support lots of ordinary very actively voting pensioners, hopefully Rishi’s robbery would drop payouts to this group that keeps voting Tory Scum

If corps can’t get returns to major shareholders because of local taxes they will setup elsewhere - especially after B.....t it’s a no brainer to prefer Ireland

[d000hg]

That was my point really. One headline rate of taxation doesn't really give you the whole picture. Other countries have even lower div rates, or retain some sort of imputation - although not many, it seems. Funny how they used to think that corp tax + personal tax was double taxation, but have quietly dropped that idea.

Divi rate only matters really to company directors or major shareholders. It may be a double tax to contractors, but not to corporations we want to attract.

[AtW]

It’s double taxation for sure, but worst of all it hammers honest locals where as offshore corp entities can extract money without paying divi tax (not in all countries - in Germany for example it’s 15% divi tax if money taken offshore, 25% local - very very fair and sensible).

[mattster]

Comparison of corp rates should be done with divi rates - Germany got 25% flat rate, UK’s top rate - 38%, with Uk going up to 25% Germany will be hands down lower corp/divi tax place.

That was my point really. One headline rate of taxation doesn't really give you the whole picture. Other countries have even lower div rates, or retain some sort of imputation - although not many, it seems. Funny how they used to think that corp tax + personal tax was double taxation, but have quietly dropped that idea.

[AtW]

Comparison of corp rates should be done with divi rates - Germany got 25% flat rate, UK’s top rate - 38%, with Uk going up to 25% Germany will be hands down lower corp/divi tax place.

[AtW]

Just noticed that this is officially the official thread - it was featured in the CUK News Flash newsletter about the budget!

[mattster]

G7 average rate is 32.5%. So he could of easily got away with it.

It's very easy to compare headline rates but much tougher to get a good handle on what they actually mean for the bottom line. e.g. what deductions are allowed at what rates, do you get franking credits/double taxation mitigation when taking dividends etc. If anyone knows of a good resource to compare the bottom line for small business owners around the world, I'd love to see it.

There's also another point, which is that in many other countries (EU/Scandi) you get an awful lot more for your tax than you do in the UK. e.g. free university fees, an actual functioning welfare system (80% last wages unemployment, proper pensions), well funded health service and education. We seem to have ended up with the highest tax burden since the 70s, and very little to show for it.

[ladymuck]

Just noticed that this is officially the official thread - it was featured in the CUK News Flash newsletter about the budget!

[AtW]

I thought it was the best budget ever.

That's how people will feel in autumn...