Here comes the tax rises

[RichardCoulter]

Originally Posted by Pierre

Looks Capital Gains is going to cop it.

There’s already a risk associated with investing.

So you invest your cash, and if you invest it wisely they’ll take more off you.

So if you invest it and lose it all, I doubt they’ll come and compensate you.

So then less people will be inclined to invest in the economy………….genius. There’s a policy for growth right there!

Loss making ventures can be offset against profitable ventures, thus compensating investors by reducing the amount of tax paid.

Originally Posted by Pierre

Looks Capital Gains is going to cop it.

There’s already a risk associated with investing.

So you invest your cash, and if you invest it wisely they’ll take more off you.

So if you invest it and lose it all, I doubt they’ll come and compensate you.

So then less people will be inclined to invest in the economy………….genius. There’s a policy for growth right there!

If you own a small business - or even a somewhat bigger one - you can choose to pay yourself mostly or almost entirely in share dividends. This income is taxed as capital gains at a far lower rate than income tax.

And yes, if you make profits some years and losses in other years, then you can offset your losses against your profits to reduce your tax bill - in that sense they absolutely do ‘compensat’e you.

Well-off business owners with wily accountants are legally avoiding significant amounts of tax by being able to choose the way their income is taxed in the way a regular PAYE employee can’t. It’s a loophole that needs closed on a point of principle and which will bring more money into the exchequer into the bargain. It’s hard to make a direct comparison but federal income tax and capital gains tax rates in the USA, for example, are much more closely aligned than they are here, and the USA has a far more positive attitude towards capital investment than we do.

If aligning our income tax and cap gains tax rates causes investment here to plummet then we have far deeper problems than a tax rate.

[Escapee]

Originally Posted by Damien

That's probably demographically unrepresentative though. Pensioners as a block are Tory learning, even in 2024, but we're talking about ones who are - on paper anyway - 'better off' so probably the strongest Tory demographic in the country.

That's possibly the case as this area has had a large Labour majority for over a hundred years. Walking around town (what's left of it) and it would be unusual not to hear glum or angry conversations amongst older folk about "The government". Even when the conversation aimed at Westminster was about something under the control of Labour in Cardiff bay.

it seems like suddenly talk of politics is off the menu, I'm not even hearing older folk around here vent their anger about the heating allowance, they may just share the meme's on social media but they are not discussing it in public.

The mention of politics which was the favourite subject of the Labour voters only a few weeks ago, now it results in lost eye contact and scurrying away.

But never mind, it will all be forgotten along with the past 25 years of Welsh Labour performance by the time the 2026 election in Wales comes around.

[Pierre]

Originally Posted by Chris

If you own a small business - or even a somewhat bigger one .

I don't, but i do have a modest share portfolio

[Escapee]

Originally Posted by Chris

If you own a small business - or even a somewhat bigger one - you can choose to pay yourself mostly or almost entirely in share dividends. This income is taxed as capital gains at a far lower rate than income tax.

And yes, if you make profits some years and losses in other years, then you can offset your losses against your profits to reduce your tax bill - in that sense they absolutely do ‘compensat’e you.

Well-off business owners with wily accountants are legally avoiding significant amounts of tax by being able to choose the way their income is taxed in the way a regular PAYE employee can’t. It’s a loophole that needs closed on a point of principle and which will bring more money into the exchequer into the bargain. It’s hard to make a direct comparison but federal income tax and capital gains tax rates in the USA, for example, are much more closely aligned than they are here, and the USA has a far more positive attitude towards capital investment than we do.

If aligning our income tax and cap gains tax rates causes investment here to plummet then we have far deeper problems than a tax rate.

Remember that if you are running a small company and you are the sole employee, you personally have generated all of the revenue. The business will have operating costs on a daily basis, investment in equipment etc, accountancy fees, PAYE fees, the cost to process and collect VAT for HMRC, insurance fees such as professional indemnity and public liability. If the director takes a salary there's employer NI and finally the corporation tax. The director can only take dividends out of what's left after all of this has been paid, but remembering to leave a surplus of retained profits for lean periods.

Offsetting losses is not much help in reality for a small business if there's a lean time where there is little or no money being generated.

Do they pay double taxation in the USA as we do when a contract has been deemed to be inside IR35?

Originally Posted by Escapee

it seems like suddenly talk of politics is off the menu, I'm not even hearing older folk around here vent their anger about the heating allowance, they may just share the meme's on social media but they are not discussing it in public.

The mention of politics which was the favourite subject of the Labour voters only a few weeks ago, now it results in lost eye contact and scurrying away.

I think people want to switch off from politics for a bit now anyway. They want things to get better but want less day to day drama from Westminster.

---------- Post added at 19:13 ---------- Previous post was at 19:11 ----------

Originally Posted by Pierre

I don't, but i do have a modest share portfolio

So do I but they're mostly wrapped up in tax-free wrappers. (SIPP, ISA).

TBH I don't care that much even if I had to declare it because it would still mean a profit. I don't turn over massive sums on dividends that it would be a big issue for me, my main income is my salary which had been hit harder by fiscal drag and will continue to do so for this parliament.

That is what will impact most people IMO.

Originally Posted by Damien

I think people want to switch off from politics for a bit now anyway.

I wish, these days its pretty much all anyone posts about.
The forum used to have many topics related to current events.
These days all anyone seems to do is argue about US or UK politics.

[ That and streaming ].

[Escapee]

Originally Posted by Damien

I think people want to switch off from politics for a bit now anyway. They want things to get better but want less day to day drama from Westminster.

I think they are more likely embarrassed about it. They have complained for the past 14 years, and now they have got what they wished for they suddenly realise things are going to get worse for them not the rich.

[heero_yuy]

Originally Posted by Escapee

I think they are more likely embarrassed about it. They have complained for the past 14 years, and now they have got what they wished for they suddenly realise things are going to get worse for them not the rich.

Those that voted to be much poorer will now be happy.

[1andrew1]

Originally Posted by heero_yuy

Those that voted to be much poorer will now be happy.

They were certainly happy on 24 June 2016. Many no longer are.

---------- Post added at 09:32 ---------- Previous post was at 09:30 ----------

Originally Posted by Damien

I think people want to switch off from politics for a bit now anyway. They want things to get better but want less day to day drama from Westminster.

Agreed.

Originally Posted by Escapee

I think they are more likely embarrassed about it. They have complained for the past 14 years, and now they have got what they wished for they suddenly realise things are going to get worse for them not the rich.

TBH They're the one group the Tories didn't cut benefits for and even increased quite a lot. As said earlier all those on the state pension are getting £900 extra this year.

If even all that wasn't enough to vote for the Tories - who were still promising more benefits for pensioners at the last election - then I am not sure how realistic their expectations were in the first place.

I doubt many people voted Labour because they wanted lower taxes or higher benefits for pensioners, these were not promises from Labour. People voted for them based on the state of the economy, housing and public services. That's what they'll be judged one.

People treat this country as a retirement home with a G7 economy attached. The idea that it's more important not to means test the winter fuel allowance than make a step towards paying doctors closer to what they were paid 10 years ago, and what they would be paid elsewhere in the Western world, gives us a clue into how the NHS has become the mess it is.

[Escapee]

Originally Posted by Damien

TBH

I doubt many people voted Labour because they wanted lower taxes or higher benefits for pensioners, these were not promises from Labour. People voted for them based on the state of the economy, housing and public services. That's what they'll be judged one.

In my area they just voted for Labour because their families have done so for the last 100 years.

Vote Labour, complain about them for 5 years, then vote Labour again. Admittedly the complaints haven't really started yet in this area, they will wait a few months until they think everyone forgot that they voted for them.

One that surprised me when attending a 60th birthday party last weekend, was an old school friend who is well into his politics. He's worked in the nationalised industry and has always been a strong union and Labour supporter. I accept that he's fairly intelligent but I completely disagree with his political views. When he approached me I was expecting a heated discussion about politics, but he said "What do you think of this lot, I voted for Reform". I was left a little surprised, and just responded "I did too". Who would have thought we would have voted for the same party.

Perhaps the tide is turning.

Originally Posted by Escapee

In my area they just voted for Labour because their families have done so for the last 100 years.

Vote Labour, complain about them for 5 years, then vote Labour again. Admittedly the complaints haven't really started yet in this area, they will wait a few months until they think everyone forgot that they voted for them.

One that surprised me when attending a 60th birthday party last weekend, was an old school friend who is well into his politics. He's worked in the nationalised industry and has always been a strong union and Labour supporter. I accept that he's fairly intelligent but I completely disagree with his political views. When he approached me I was expecting a heated discussion about politics, but he said "What do you think of this lot, I voted for Reform". I was left a little surprised, and just responded "I did too". Who would have thought we would have voted for the same party.

Perhaps the tide is turning.

Maybe although again be cautious about extrapolating from anecdotes.

About 3% of Labour voters in 2019 went reform compared to about 25% of Tory voters: https://yougov.co.uk/politics/articl...neral-election

That also shows that pensioners remain the Tory's most dependable bloc.

I think the biggest thing will be if Reform voters return the Tories or not. If you look at that link I think the biggest threat to the Tories is how much people who are in work and/or don't own homes are leaving them. Reform could become the right-wing party attracting those voters if they're not careful.

Labour on the other hand need to deliver for people in work and who want to own homes. If they don't do that, and improve the NHS, they're screwed as well.

[Pierre]

https://news.sky.com/story/deputy-pm...isher-13205971

Great that she’s having such a brilliant time, whilst her party cripples pensioners and attacks anyone that has tried to save for their future and then hands over the proceeds by capitulating to junior doctors, train drivers and no doubt anyone else that will ask.

---------- Post added at 21:57 ---------- Previous post was at 21:53 ----------

Originally Posted by Damien

I think people want to switch off from politics for a bit now anyway. They want things to get better but want less day to day drama from Westminster.

Labour getting their cronyism in early doors.

I may be being unkind, but it reads a lot like, Tories are out, Labour’s in, can we just not look too hard at Labour now?

Originally Posted by Pierre

Great that she’s having such a brilliant time

Yes, its good that people enjoy their holidays.

Originally Posted by Pierre

I may be being unkind

Of course you are, but thats expected of you these days.

I have no love for labour, but picking out people for having a good time on holiday ? Just more of your nonsense.