Tuesday 3 March 2020

Let's hope the budget gets cancelled too

Really worried by the kite flying from the new Chancellor.

The Tories are talking about doubling Enterprise taxes to 20% from 10%  - what on earth difference will this make to the overall tax income but at the expense of putting off new fintech and other start-ups that we need.

In addition, there is talk of huge spending needs and taxes rises to compensate.

We really don't need tax rises in the UK. Thje inexorable rise in taxation needs to be challenged with some creative thinking. Cutting the 50% tax rate to 45% raised revenues for example. This should be carried further one.

Another kite being flown is a re-working of business rates, this is a better idea but not if it results in a move to Land Value taxes that end up costing everyone - relief is needed for thos under pressure not spreadin the burden more widely amongst the population.

Overall this year all the kites being flown are rubbish and designed to raise revenues rather than relieve tax burdens and drive business spirits. Save us from a Budget please Corona virus!


John in Cheshire said...

The government should abandon the changes to IR35. My brother is affected by it and her tells me many fellow contractors are quitting jobs because of it, several taking jobs overseas.

What on earth is this supposed Conservative government doing? It's supposed to represent the party of enterprise yet by these actions it's helping to destroy it.

Charlie said...

Another IT contractor caught by the new IR35 rules here. It'll cost me about £30k a year.

I'll liquidate my Ltd Co, having used it as a savings vehicle for a house deposit. Axing ER will cost me about £40k this year.

Whether you see these changes as righting wrongs or totally unfair, I don't think a Corbyn government would have cost me £70k this year. It's like the Tories don't want my vote anymore.

E-K said...

Not very Tory is it !

Matt said...

Tory or Labour are two cheeks of the same arse. Both want more government and thus need more tax to feed the monster.

APL said...

" but at the expense of putting off new fintech "

'fintech' more and innovative ways to churn somebody else's money and make extra commission.

Yes, we need more of that shite.

Matt said...


In case you haven't notices, the UK is increasingly a services based economy and so we do need more of that shite. You might not like it (or agree with the need for it) but that's what we sell to the rest of the world.

Any suggestions as to what else we could sell where we can compete?

Graeme said...

Charlie, you probably need a better tax advisor. The CGT regime at the moment is the least onerous I can recall since I started work in 1983. Capital gains taxed at 20%,after an allowance of £10k? There have been times when gains were taxed at income tax rates, under Lawson, without such a generous allowance. I suspect that the Corbyn government would probably move back to what we had in the 90s,when we had Retirement Relief and CGT at 40%

estwdjhn said...

I see they are also on about abolishing red diesel. That's one way to make them truly popular with the farming world, also anyone who works in engineering (particularly with diesel space heating, as our workshop has) even narrowboat owners. I presume that they think we are all making enough money we can afford to pay out thousands more every year in fuel duty.

Anonymous said...

Isn't "Entrepreneurs Relief" great for private equity people, who end up paying less tax than the people who clean their offices?

CityUnslicker said...

OK - I am not across IR 35 and have never been wholey sympathetics as the rates people pay when contracting are just so much less than PAYE types - any move by the Government is decried as a tax on work - when in reality this has been a tax break for decades and also allows companies to get away with not paying people properly or employing them properly. Doing such a huge shift in one year seems v draconian though as people need time to get their house in order.

Re Fintech - yes this is what we need, 100,000 new jobs in new tech spaces LAST YEAR alone. Not a bad thing in anyway.

ER - yes it does allow PE types to do well but it also allows in the round people to set up businesses build them and sell them. Taking this incentive away is a bad thing and againwhy double the rate, why note 3 or 5% change?

Charlie said...

Graeme - I don't care how "generous" the CGT rate is - 20% is twice as much as 10%, and this is on top of corporation tax, so an effective 36% tax rate on money left in the Ltd Co after winding down.

Re phasing in - the bloody BTL crowd got 5 years to adjust to paying more tax - and that was a correction to a tax regime that ensured an entire generation can't buy their own bloody house and are stuck renting from an amateur landlord.

Anonymous said...

FFS. Raab is offering solidarity to Turkey in its invasion of Syria, just at the moment Turkey is unleashing the illegal invaders at Greece.


"The UK will demonstrate its staunch support for Turkey’s efforts to negotiate an immediate and lasting ceasefire in Syria with a visit to Ankara tomorrow (Tuesday March 3) by Foreign Secretary Dominic Raab. The visit will reaffirm the UK’s close friendship with its NATO ally and show solidarity towards Turkey as it deals with the Syrian regime’s reckless offensive in Idlib."

Anonymous said...

Charlie - "20% is twice as much as 10%, and this is on top of corporation tax, so an effective 36% tax rate on money left in the Ltd Co after winding down"

If you wind down a company and disburse the cash, isn't that taxed at (more or less) your marginal tax rate? I'd like to wind down but don't fancy paying a huge tax bill when 20% has already gone on Corporation Tax.

Charlie said...

Anon - Google "Members Voluntary Liquidation"

andrew said...

Ignoring the fairness or unfairness of IR35 etc.

The thing that clearly gets the great british public angry is


So, do not change things.

No budget please (no, I do not benefit from IR35)

Charlie said...

Andrew - wasn't the Brexit vote all about _changing_things_?

andrew said...

... and has there not been a lot of anger about over the last 4 years or so?!?

APL said...

Matt: "Any suggestions as to what else we could sell where we can compete?"

1. Why pay someone to lose your money. you can do that perfectly well for your self, for free.

2. Yes to your question. China has just shut down it's industry, supplying the rest of the world - that's pretty much financial terrorism - over a flu virus, that China refuse to give us any information about.

Yes, we onshore all the manufacturing we've off shored over the last sixty years. A big task, but with CAD manufacturing the skills shortage could be mitigated.

This crisis is an opportunity. If it weren't for the utter slothfulness of the financiers. And we could benefit if the government were to stop destroying the value of the currency too.

A bit of a 'white swan event' but possible.

Matt said...


The Chinese are losing lower skilled jobs to the likes of Vietnam so the idea we can bring back those types of jobs to the UK is fanciful. The higher tech manufacturing stuff we still do well anyway. It's just with better machine tools we don't employ anywhere near as many people as before (see the car industry and F1 for examples).

For better or worse, we have the service sector to keep Blightly going.

APL said...

Matt: "The Chinese are losing lower skilled jobs to the likes of Vietnam so the idea we can bring back those types of jobs to the UK is fanciful."

Industry that was 'offshored' in the '60, '70 and '80 and oughties was a different beast to what we should be bringing back.

Than it was labour intensive, today the same tasks are automated to a degree, barely conceived of, forty years ago.

Today, you have half a dozen people running a factory. In the '70, the same facility would have required a couple of hundred. There is your cost saving, you don't need Vietnam.

Just because you can employ a Vietniese for half the cost of a Chinese. Who cares? At those wage rates it doesn't make any difference. And if the cost of setting up the manufacturing facility in Vietnam when you already had one in China, was taken into account it wouldn't be worth it anyway.

Matt: " It's just with better machine tools we don't employ anywhere near as many people as before ... "

Good to see you agree. We can manufacture in this country, given the high technology manufacturing facilities.

& non boving financiers and non corrupt politicians.

So, yes, a bit of a pipe dream.