Budget 2011: Government 'due £8bn windfall'

[Gary L]

Originally Posted by papa smurf

your gona be loaded

I'll be able to afford to eat and pay for gas and electric now!

[Chrysalis]

Originally Posted by Mick

Just a quick summary of some of the things announced in today's budget:-

• Corp. Tax cut by 2% from April and further 1% per year for 3 years.
• Income Tax and National Insurance to merge but could take years.
• Labour's planned increase in Fuel duty cancelled. 1p Cut in Fuel duty from 6pm tonight. Fuel Stabilizer to be put in to place.
• Business Milage rates from 40p to 45p.
• Air Passenger duty rise delayed until next year.
• Council Tax Frozen in every England Council.
• New Private Jet Tax Budget Introduced.
• Personal Tax allowances increased this year by £1,000 to raise to £8,105 in 2012.
• 50p Tax rate for highest earners a temporary measure. Osborne wants to see if it actually raises enough for the coffers.
• £100 Million to Fix Britains Roads and pot holes.

thanks for the list, to me what stands out is a corp tax rate drop which wont be effective other than to reduce tax intake when we supposed to be closing a deficit, and the merging of NI with income tax.

On the latter is the most interesting as NI was originally created to specifically fund pensions and incapacity benefit, recent changes to IB will almost demolish it as a benefit as long term plans are to kick most people of it and overall NI still has a large surplus used for other purposes so in effect NI has become a generic tax source so the merge makes some sense I guess. However thinking about it a bit more this comes a tax cut by stealth to corp's again as currently companies pay half of NI themselves whilst the employee pays income tax. So it will be interesting to see how a migration is handled, would people in effect see a net salary reduction taking over the company part of NI as income tax or will it be handled in a manner where the average worker doesnt lose out.

On the corp tax people may (rightly) feel all the aggressive cuts going on in social services etc. are simply a way of shifting money to corporate profits with this tax cut.

[Ignitionnet]

Originally Posted by Chrysalis

thanks for the list, to me what stands out is a corp tax rate drop which wont be effective other than to reduce tax intake

Is that your personal view or do you have citations from a spectrum of economists to indicate that it will have zero stimulating effect on the private sector and will not be a pro-growth policy?

Originally Posted by Chrysalis

On the corp tax people may (rightly) feel all the aggressive cuts going on in social services etc. are simply a way of shifting money to corporate profits with this tax cut.

If it suits their agenda I'm sure that's how they feel, especially if basing that view on your assumption that the corporation tax reduction will have no stimulating effect on the economy.

Ireland's experience says otherwise.

Damn those vicious cuts.

Planned Public Sector Spending in £ billion

Year Change
2010-11 696.8 0.0
2011-12 701.8 +5.0
2012-13 713.0 +12.2
2013-14 724.2 +11.2
2014-15 739.8 +15.6

---------- Post added at 17:48 ---------- Previous post was at 17:37 ----------

Originally Posted by Chrysalis

However thinking about it a bit more this comes a tax cut by stealth to corp's again as currently companies pay half of NI themselves whilst the employee pays income tax. So it will be interesting to see how a migration is handled, would people in effect see a net salary reduction taking over the company part of NI as income tax or will it be handled in a manner where the average worker doesnt lose out.

No, they aren't going to shove employer's NI onto the employee, that would be absurd. It'll be replaced by something else most likely or at very least employers required to hand that money to employees in increased salary or hourly rate so that they are no worse off.

There is nothing in this budget to shift burdens from corporations to individuals, the only policies that may give that impression are, rightly, being done to promote growth. The temporary VAT cut was to promote increased consumer spending, the corporation tax cut is to promote increased business activity in the UK, the kind that is needed to create jobs, those lovely things that turn people from welfare claimants into tax payers and mean money for the treasury instead of outlay from the DWP.

If you're looking for a nasty tax rise try this:

The biggest tax hike is the new floor on the carbon price. In other words, a £1.4 billion tax by 2015-16 added to electricity bills for families and struggling manufacturing industries.

[Julian]

Originally Posted by Gary L

What insurance?
actually how much profit does a shop make from 25g/50g pack?

a) Shop insurance is heavily loaded if you sell/stock cigs. The more you stock the higher the premium.

b) Depends on what you charge, a £6.47 price marked pack of Golden Virginia 25g would earn you around 40p. 20 L & B price marked £5.85 would get you around 25p.

[Chrysalis]

why am I not surprised on the carbon tax. That one is indeed nasty as already some of the poor pay over 40% of income on electric/gas. It does seem they going out of their way to make (a) low income pay more tax and especially (b) shift taxation to benefit claimants. Easily done by taxing essentials and not taxing income.

All I am seeing is taxation been shifted from forms of taxation that the poor are excempt from such as income tax and NI (both benefit claimants dont pay and low income pay less), to consumption taxation which affects everyone equally and as a result is disproportioned to ability to pay.

My view on the corp tax is just my view yes, obviously I cannot state fact for something that hasnt happened, my view is quite simple really.

If a company wants to save on corp tax they will simply go to a tax haven, dropping a few % wont change that as the tax haven will still be cheaper, so all it will really serve is to boost profits, increase shareholder dividends as a result of the boosted profits and enlarge some exec bonuses. There is a slim chance workers would see wage increases as a result but I think that is unlikely. I would be extremely surprised if corp tax intake increased following this change.

Originally Posted by Chrysalis

All I am seeing is taxation been shifted from forms of taxation that the poor are excempt from such as income tax and NI (both benefit claimants dont pay and low income pay less), to consumption taxation which affects everyone equally and as a result is disproportioned to ability to pay.

Where does the increase in tax-free allowance threshold fit into what you are seeing?

could someone clarify if the change in the tax free threshold will come into affect for the 10-11 or 11-12 tax year

Originally Posted by martyh

could someone clarify if the change in the tax free threshold will come into affect for the 10-11 or 11-12 tax year

It goes up £1000 this April, and another £600 in April 2012.

---------- Post added at 19:13 ---------- Previous post was at 19:09 ----------

My Daughter put £10 worth of petrol in her car tonight (at 6:30pm).

She paid a penny more per litre than this time last week. So much for the reduction.

[Gary L]

Originally Posted by Julian

a) Shop insurance is heavily loaded if you sell/stock cigs. The more you stock the higher the premium.

b) Depends on what you charge, a £6.47 price marked pack of Golden Virginia 25g would earn you around 40p. 20 L & B price marked £5.85 would get you around 25p.

Thanks for that. I get an idea of how much I'm depriving him of now

have you noticed a drop in sales of rolling tobacco since everyone started buying it on the black market? I know a lot of shops don't stock the 50g because nobody buys the stuff when you can get 2 for the same price.

Originally Posted by Paul M

It goes up £1000 this April, and another £600 in April 2012.

.

cheers for that Paul M that will be a handy chunk towards my anual refund

[Chrysalis]

Originally Posted by Chris

Where does the increase in tax-free allowance threshold fit into what you are seeing?

That one is an oddity only happened because of lib dems.

---------- Post added at 20:02 ---------- Previous post was at 19:45 ----------

I see they following the trend of propping up the housing market, something governments just refuse to let go downwards.

He also pledged £250m to help 10,000 first-time homebuyers purchase newly built flats and houses in England.

The buyer would have to put up 5% of the cost, while the government and home builder would both put up 10%, in a move aimed at boosting the construction industry.

A scheme to help out-of-work homeowners with mortgage arrears, introduced by the previous government, will also be extended.

It should be simple, if you cant afford to buy a home then dont buy one.

Originally Posted by Chrysalis

That one is an oddity only happened because of lib dems.

it is part of the budget that you claim is doing nothing but take cash away from the low paid. Either it is doing as you said, or it is not. Which?

[Julian]

Originally Posted by Gary L

Thanks for that. I get an idea of how much I'm depriving him of now

have you noticed a drop in sales of rolling tobacco since everyone started buying it on the black market? I know a lot of shops don't stock the 50g because nobody buys the stuff when you can get 2 for the same price.

More peole are rolling now hence why HMG has targetted that market. Interestingly customers' theory is that they will smoke less due to the hassle of rolling.
HMG's action plays straight into the hands of smugglers...

[Chrysalis]

Originally Posted by Chris

it is part of the budget that you claim is doing nothing but take cash away from the low paid. Either it is doing as you said, or it is not. Which?

OVerall it is, as I said its an oddity. It is just one part of a budget.

If you dont understand what I mean then I am sorry.

[Ignitionnet]

Just watched the budget in full, seemed quite 'coalition'. Less on the fiscal right than would be expected from an all Tory budget but considerably to the right of what would be expected of the Liberal Democrats.

Seemed quite responsible and largely reasonable, a few good measures in it to promote growth, a couple of measures to try and ease the pain of inflation and all apparently costed by the OBR. Responsibility seemed to be the order of the day - a pleasing and pragmatic contrast to declaring a ton of spending commitments, pulling growth figures out of the hindmost, borrowing according to an arbitrary 'golden rule' and bombastic announcements of the end of boom and bust using unbalanced public and private debt fuelled growth along with an unprecedented asset boom as some sort of evidence.