Budget October 2024

[Phil xxkr]

Well, well informed, educated, discerning and upstanding members of the LOC what do we reckon? 

[steve2006]

I’ve got just under 2 years to buy enough vape fluid to last me to the end of my life to avoid paying £2.20 a bottle “vape duty”

[Malc1]

Next couple of days will tell us what the Money and Finance Markets think together with the BofE with interest rates going forward 

As a small business owner the prospect of hanging on to staff that cannot provide that  employed individuals personal uplift in productivity and business profitability WILL result in their exit from the business ……. zero leeway to hang on to staff less than  150% effective …….. it’s so so simple ……. increased direct business costs resulting in increased retail sales prices that simply aren’t acceptable to retail buyers …….. it would be wonderful to pay lots of Corporation Tax but reality tells me the profits just ain’t going to be there going forward 

Not a growth fiscal environment for very many small, medium ( and even large ) businesses I’m sure …….. that business profitability will be much harder to achieve and many, as during Covid, will just simply “ give up” ……. simply not worth the bother trying to make it “ work “  …….. Joe Public generally will have even less in their pockets to spend on everything including heating and food 

Govt Cabinet are in cloud cuckoo land and haven’t a clue how real people have to live from day to day ……… Rachel Reeves and hubby ( NHS worker ) enjoy an annual income incl expenses of in excess of £500,000 ,,,,,,,, she hasn’t a  f . .king clue 🥵

Malc 

[Phil xxkr]

7 hours ago, Malc1 said:

Next couple of days will tell us what the Money and Finance Markets think together with the BofE with interest rates going forward 

As a small business owner the prospect of hanging on to staff that cannot provide that  employed individuals personal uplift in productivity and business profitability WILL result in their exit from the business ……. zero leeway to hang on to staff less than  150% effective …….. it’s so so simple ……. increased direct business costs resulting in increased retail sales prices that simply aren’t acceptable to retail buyers …….. it would be wonderful to pay lots of Corporation Tax but reality tells me the profits just ain’t going to be there going forward 

Not a growth fiscal environment for very many small, medium ( and even large ) businesses I’m sure …….. that business profitability will be much harder to achieve and many, as during Covid, will just simply “ give up” ……. simply not worth the bother trying to make it “ work “  …….. Joe Public generally will have even less in their pockets to spend on everything including heating and food 

Govt Cabinet are in cloud cuckoo land and haven’t a clue how real people have to live from day to day ……… Rachel Reeves and hubby ( NHS worker ) enjoy an annual income incl expenses of in excess of £500,000 ,,,,,,,, she hasn’t a  f . .king clue 🥵

Malc 

They should have spoken with you beforehand or at least the FSB. If you live in a rural community like me there just may be a bright spot here concerning solar panel farms if you are contesting one near you. Changes to the hereditary tax position for farms means if you are unable to pay the death duties your only option is to sell up. But who is going to buy land with a Solar farm on it other than the energy companies or hedge funds at a knock-down price.? Being cynical it's a very cute way of supporting the net zero lunatics. ☹️

[GMB]

It took a while to find out the new tax rate for the ISF - £760 up from £735.  Anyone considering a new V8 such as an LC will now pay double in the first year over £5K I believe. The big issues will probably be council tax and general inflation risks,  The knock-on effects are just starting and it's not good news.

[Malc1]

49 minutes ago, GMB said:

The big issues will probably be council tax

I'm just thinking that existing homeowners with an additional holiday Park Lodge or similar will be treated as owning a 2nd home at some stage soon and will be having to pay the usual double Council Tax rate on one of 'em .........  let's see 🤢

Malc

[Phil xxkr]

2 minutes ago, Malc1 said:

I'm just thinking that existing homeowners with an additional holiday Park Lodge or similar will be treated as owning a 2nd home at some stage soon and will be having to pay the usual double Council Tax rate on one of 'em .........  let's see 🤢

Malc

I think it will start with Motor homes. 

[Kevin Williams]

I have many friends in Cornwall that are farmers... The twitter post from Kirstie Allsopp includes some meaningful wording...!

[Phil xxkr]

56 minutes ago, GMB said:

It took a while to find out the new tax rate for the ISF - £760 up from £735.  Anyone considering a new V8 such as an LC will now pay double in the first year over £5K I believe. The big issues will probably be council tax and general inflation risks,  The knock-on effects are just starting and it's not good news0i

Comment from a local farmer, "One thing is for sure there will be no tenant or smaller family farms left under the current government". 

So if you think car tax going up is expensive wait till you see food prices! 😱

[Malc1]

1 hour ago, Phil xxkr said:

Changes to the hereditary tax position for farms means if you are unable to pay the death duties your only option is to sell up.

I have a buddy age 80 who's a lifetime farmer in Kent, having inherited from his father before him .  his children, well adults now of course, working in the " family farm " will be having some serious changing financial plannimg to do ..........  he has fended off the Local Authority for many many years that has been trying to push him into releasing big chunks of his farmland for Housing Development ...... so far he's resisted all that coz he simply wants to continue being a farmer with his very productive land and great green environment ...................

I'm thinking that might all change ....  he will become an amazingly cash rich ex-farmer and the environment might get another few thousand houses nearby !

He really doesn't want or need to be ultra ultra cash rich at his age of course AND he really wants his family to be able to continue productive environmetally great farming in Kent

Cest le vie

Malc

[Phil xxkr]

15 minutes ago, Malc1 said:

I have a buddy age 80 who's a lifetime farmer in Kent, having inherited from his father before him .  his children, well adults now of course, working in the " family farm " will be having some serious changing financial plannimg to do ..........  he has fended off the Local Authority for many many years that has been trying to push him into releasing big chunks of his farmland for Housing Development ...... so far he's resisted all that coz he simply wants to continue being a farmer with his very productive land and great green environment ...................

I'm thinking that might all change ....  he will become an amazingly cash rich ex-farmer and the environment might get another few thousand houses nearby !

He really doesn't want or need to be ultra ultra cash rich at his age of course AND he really wants his family to be able to continue productive environmetally great farming in Kent

Cest le vie

Malc

Here in Derbyshire that's a familiar story, if it's not solar it's houses or "rewilding" leaving not one square foot of productive land for people or animals. The consequences are inevitable and very very gloomy for both farmers and consumers alike 🙁

[GMB]

4 hours ago, Malc1 said:

working in the " family farm " will be having some serious changing financial plannimg to do

It all sounds like bad news for British farmers but, bear with me and tell me where I have got this wrong. It's a bit complicated.  Death duties/ IHT/CGT whatever it's called has to be paid when an estate is sold or transferred - as always - understood.

If the Farmer sets up the farm business as a Ltd company and he is MD and his next of kin or whoever are given the post of directors, even if it is only a peppercorn salary, they are employees of a taxed entity i.e. the company. Normal practice. So, when the MD dies or leaves the post of MD  the post becomes vacant and the next of kin is promoted to MD.  People are not taxed because they are promoted, only on their income and benefits, the company continues, nothing radical has changed, no tax is due or paid.  Where am I going wrong?

[Malc1]

4 minutes ago, GMB said:

It all sounds like bad news for British farmers but, bear with me and tell me where I have got this wrong. It's a bit complicated.  Death duties/ IHT/CGT whatever it's called has to be paid when an estate is sold or transferred - as always - understood.

If the Farmer sets up the farm business as a Ltd company and he is MD and his next of kin or whoever are given the post of directors, even if it is only a peppercorn salary, they are employees of a taxed entity i.e. the company. Normal practice. So, when the MD dies or leaves the post of MD  the post becomes vacant and the next of kin is promoted to MD.  People are not taxed because they are promoted, only on their income and benefits, the company continues, nothing radical has changed, no tax is due or paid.  Where am I going wrong?

you're fine ..............  if it's a simple Ltd coy .......  if it's simply a Trust, or an inherited Trust with some complex clausing, or indeed a Partnership with Individuals, Trusts and assorted Ltd Coys  then it might not be so straightforward ........... 🙃

Malc

[Phil xxkr]

49 minutes ago, GMB said:

It all sounds like bad news for British farmers but, bear with me and tell me where I have got this wrong. It's a bit complicated.  Death duties/ IHT/CGT whatever it's called has to be paid when an estate is sold or transferred - as always - understood.

If the Farmer sets up the farm business as a Ltd company and he is MD and his next of kin or whoever are given the post of directors, even if it is only a peppercorn salary, they are employees of a taxed entity i.e. the company. Normal practice. So, when the MD dies or leaves the post of MD  the post becomes vacant and the next of kin is promoted to MD.  People are not taxed because they are promoted, only on their income and benefits, the company continues, nothing radical has changed, no tax is due or paid.  Where am I going wrong?

Agricultural property relief (APR) and business property relief (BPR) saw a significant reform in the Budget announcement. The current 100% rate of relief will only extend to the first £1 million of combined agricultural and business property in excess of all existing nil-rate bands and exemptions. The rate of relief for qualifying property in excess of £1 million has reduced to 50%. In addition, in all circumstances for shares designated as “not listed” on a recognised stock exchange such as AIM, the rate of business property relief available will reduce from 100% to 50%. So quite different from a Ltd company. It may well be Trusts are the way forward to protect the integrity of the holding. Incidentally, 1 mn pounds is unlikely to get you 100 acres let alone a house - utterly unworkable. 

[Linas.P]

My view - overall mehhh.

There were no huge surprises, shocks, tax raids... and that is both good and bad. In grand scheme of things - nothing has changed, for average person £100 saved in one place, £100 spent in other - overall awash. I have looked at it from all perspectives and I can't really see any impact that would materially improve my financial position nor make it worse.

I was honestly afraid they will attack "high earners" because they think that somehow £100k is huge salary, despite it being barely enough to survive in London and I was honestly hoping they will ratchet CGT to the point it hurts, basically taxing the real rich, people with assets, not just the hard working people who earn, but useless ones who just sit on pile of wealth and adds no value, nor pay any taxes. But they haven't done either. The increase in CGT was minimal, the increase in taxes also minimal (they have not increased the taxes, but they kept the rate fixed, which is called "fiscal drag", so overtime we will end-up paying more tax).

They raised car/motoring taxes, that was expected, any labour government will be anti-motoring (more so than already anti-motoring governments since like 1960s) - so no surprised there, but dare a say they didn't raise them as much as I have feared, so kind of "positive" there. Well... it isn't positive, but it certainly could have been worse. For example - no hike in fuel duty and even the cut remains in place - unexpected. Apart of that no other relevant changes. Some changes for new car buyers, but in grand scheme of things minor for the purchase of maybe £30k or more and also irrelevant for me as I have no plants to buy any car past 2023 (due to stupid speed monitoring), so no a concern for foreseeable future. 

Overall, I was hoping for them to plug some major tax holes that are being abused, but they haven't done anything like that. Quite disappointed really. They closed one - and that is farming land, but it is questionable how much of that will be benefit (taxing frauds that use that loophole) and how much of that will be damage - just impacting actual farmers (just a note here, the impact would be minor, so those that care crying are really exaggerating the issue, like yes some farmers will be taxed slightly more, tiny increase not worth even mentioning). Big one for me was fighting housing bubble and making housing more affordable, but nothing in the budget made any attempt to change anything. 

That said I believe they were just testing the ground and sort of making everyone accustomed, somehow I feel next budget is where we will start seeing real differences, good and bad.

 

[Malc1]

24 minutes ago, Linas.P said:

somehow I feel next budget is where we will start seeing real differences,

a year is a very long time in politics when the small business environment has been clobbered, some of it to extinction coz profitability is just about impossible to achieve with huge increased costs impacting thru' uplifts in N I and minimum wages, inflationary input cost pressures all round too ..........  too much for very many good businesses to survive I'm fearing .........  nevermind, Starmer and Reeves know best quite clearly with the rest of Business talking a loada tosh as usual about lots of negative stuff that will never come to pass ...  as if eh !

Let's see what the Unions think of all this with employers teetering on the brink and the Money Markets finally get fully to grips with it all going forward ....  give it a few days to be digested proper and then we will know with some greater certainty how the UK economy might pan out 

BUT I fear it ain't gonna be too good for retail sales tbh   ..  profits hit badly and the inevitable staff reduction programmes and zero fresh hiring nor new Apprenticeships emerging 

BUT Starmer and Reeves know best, afer all, they're in charge of all this financial stuff and employment whatever . THEY'RE IN CHARGE   and the buck stops with them 

Let's hope Society doesn't get too badly impacted and OAPs,  Kids in Need,  don't get the brunt end  of it all 

Malc

[Phil xxkr]

41 minutes ago, Linas.P said:

My view - overall mehhh.

There were no huge surprises, shocks, tax raids... and that is both good and bad. In grand scheme of things - nothing has changed, for average person £100 saved in one place, £100 spent in other - overall awash. I have looked at it from all perspectives and I can't really see any impact that would materially improve my financial position nor make it worse.

I was honestly afraid they will attack "high earners" because they think that somehow £100k is huge salary, despite it being barely enough to survive in London and I was honestly hoping they will ratchet CGT to the point it hurts, basically taxing the real rich, people with assets, not just the hard working people who earn, but useless ones who just sit on pile of wealth and adds no value, nor pay any taxes. But they haven't done either. The increase in CGT was minimal, the increase in taxes also minimal (they have not increased the taxes, but they kept the rate fixed, which is called "fiscal drag", so overtime we will end-up paying more tax).

They raised car/motoring taxes, that was expected, any labour government will be anti-motoring (more so than already anti-motoring governments since like 1960s) - so no surprised there, but dare a say they didn't raise them as much as I have feared, so kind of "positive" there. Well... it isn't positive, but it certainly could have been worse. For example - no hike in fuel duty and even the cut remains in place - unexpected. Apart of that no other relevant changes. Some changes for new car buyers, but in grand scheme of things minor for the purchase of maybe £30k or more and also irrelevant for me as I have no plants to buy any car past 2023 (due to stupid speed monitoring), so no a concern for foreseeable future. 

Overall, I was hoping for them to plug some major tax holes that are being abused, but they haven't done anything like that. Quite disappointed really. They closed one - and that is farming land, but it is questionable how much of that will be benefit (taxing frauds that use that loophole) and how much of that will be damage - just impacting actual farmers (just a note here, the impact would be minor, so those that care crying are really exaggerating the issue, like yes some farmers will be taxed slightly more, tiny increase not worth even mentioning). Big one for me was fighting housing bubble and making housing more affordable, but nothing in the budget made any attempt to change anything. 

That said I believe they were just testing the ground and sort of making everyone accustomed, somehow I feel next budget is where we will start seeing real differences, good and bad.

 

Good lawd Linas, I dearly wish I had your lack of foresight, I could sleep more soundly and wake up happier. 🤯

[Linas.P]

3 minutes ago, Phil xxkr said:

Good lawd Linas, I dearly wish I had your lack of foresight, I could sleep more soundly and wake up happier. 🤯

There is no lack of foresight, I am just not paranoid about things I can't change and which never were and never will be better. If I were left-leaning labour supporter I would be disappointed that it didn't go far enough, it didn't go almost at all in fact. If I would be right leaning tories man, then it doesn't matter what is in the budget - it will always be bad because because it is labour budget. I have no political bias looking at it, I am looking at it apolitically and it is non-event.

Budget could have been worse, could have been better, for most everything remained unchanged. Which is an issue considering UK taxation system is fundamentally broken and needs complete reset, but also it could have been far worse. That said I assume they just can't be wild with it, because it doesn't matter whenever it is better or worse for people living in the country when world is globalised. If they upset the markets, then it does not matter if they had good idea or not.

Point is - they tired no to upset anyone, but likewise they didn't please anyone. UK taxation needs revolution, not evolution. Could revolution under labour be bad - sure, but it also could be good... evolution is bad under any government and this budget was evolution. 

[Boomer54]

9 hours ago, GMB said:

It all sounds like bad news for British farmers but, bear with me and tell me where I have got this wrong. It's a bit complicated.  Death duties/ IHT/CGT whatever it's called has to be paid when an estate is sold or transferred - as always - understood.

If the Farmer sets up the farm business as a Ltd company and he is MD and his next of kin or whoever are given the post of directors, even if it is only a peppercorn salary, they are employees of a taxed entity i.e. the company. Normal practice. So, when the MD dies or leaves the post of MD  the post becomes vacant and the next of kin is promoted to MD.  People are not taxed because they are promoted, only on their income and benefits, the company continues, nothing radical has changed, no tax is due or paid.  Where am I going wrong?

You are on the wrong tack. The family member(s) owns the stock of the LTD company. Upon their death the stock passes to their heirs. They will suffer inheritance tax on that assuming the value exceeds the current threshold. I know what you are getting at. Put the business into a LTD company that offers some income tax protection ,but that has nothing to do with inheritance tax. That will still apply in the usual way.

[Boomer54]

The biggy for me was the change to pension pots being included in estates for the purpose of inheritance tax  from 2027. Good news for the offspring as gifting just got turbocharged 😉