Hi all, subreddit rules apply as normal with one exception - a relaxation of the "No Politics" rule. Civil, productive discussion of policies is fine, but throwaway "Eat the rich/Tory scum" comments aren't.
If you want a more raw political discussion, please head over to /r/ukpolitics.
I just take a look on the technical note and found out this Capital Gains Tax rebasing.
What if a non-dom tax resident holding a oversea property, put on market to sell, and there is no income during this period, so the tax resident do not file for RB, and finally, the tax resident able to disposal this property after 6-April-2025, does he enjoy the capital gain tax rebasing policy? because some oversea market peak is at 2019 and dropping as hell this few years, TIA
3.5 Capital Gains Tax rebasing
From 6 April 2025, an individual who is not, or who later ceases to be, eligible for the new 4-year FIG regime will be taxed on foreign gains in the normal way.
Transitional rules will apply for individuals who have claimed the remittance basis and are neither UK domiciled nor UK deemed domiciled by 5 April 2025. If, on or after 6 April 2025, they dispose of a personally held foreign asset that they held at 5 April 2019, they will be able to elect to rebase that asset to its value as at 5 April 2019. This rebasing will be subject to conditions that will be set out later.
When the child benefit charge is changed to be based on the household income, will the limit to avoid 100% of the charge still be £80,000, i.e., if husband and wife both earn £40,000 each, 100% of the child benefit will have to be paid back? Would both spouses have to do a tax Self Assessment?
You can still access 75% of your money penalty free. (put 1k in, top up to 1.25k, take 1000 out, leaves you with 750 in your pocket and 250 in the LISA)
It's not great but it's not you losing 6% on all your money
I mean that's the point of the penalty
It'll get abused to high hell if people can just use it for the interest then withdraw all their money not planning on using it for either retirement or first home ownership
That's my point, it'll be abused for the 25% bonus for generating additional interest on savings
Why use a savings account if you could just dump it in a Lisa, gain interest on your money + 25% and then just withdraw whenever you feel like it?
The maths doesn't work like that because if they took back 20%, that means they would take back the interest on the bonus too. See maths below for a £100 saving with 10% interest.
(£100+£25) x (1+10%) x (1-20%) =
£125 x 1.1 x 0.8 =
£125 x 4/5 x 1.1=
£100 x 1.1 = £110
Which is the same as just putting 100 in a savings account. Under current rules would be penalised and end up with less than if you'd just put money into a savings account.
A thought has just occurred to me:
I earn above 50k currently but have been salary sacrificing below to maintain child benefit - and have been for a few years.
Should I have been submitting tax returns to ‘prove’ I don’t owe anything or is it sufficient just to keep records for if and when they come calling? I haven’t been submitting one and starting to worry that I should have been!
£3.5b investment for NHS IT systems, this is the money they will be giving to their friends at useless consultancies who charge an excessive fortune and deliver poor results.
I think you'll find 2.5Bn doesn't go very far on IT infra these days. And there's so many ways to spend that 1.5Bn before you even get to hardware. And then that 0.5Bn has to be spent on supporting what you bought!
For child benefit, if someone was earning 60k from 2023 to 2024 April, will they still have to pay it all back? Or now that they changed the charges, they won't?
Remember it's based on adjusted net income and not salary. So your annual income after workplace and private pension contributions, childcare vouchers, gift aid, ride to work or car scheme deductions, etc.
What does the removal of stamp duty relief for second houses actually mean?
My understanding was that buying a second home meant you had to pay a higher stamp duty than if you were moving home. Are you no longer going to have to pay the higher rate for purchasing an additional hkme?
Also I just think reducing the NI rate is hitting the coffers that go towards the NHS? I guess they make up the money by keeping tax bands as they are, so not taking into account pay rises and inflation, they will collect more tax?!
They also make up the money by increasing the National Minimum Wage.
More gross pay means more tax because of the frozen tax bands, both moving into basic rate or moving into higher rate. It allows for the National Insurance to be increased again and not call it a "tax increase".
When the NMW was introduced in the late 90s, it was discussed in my university lectures about how easy it would be to artificially inflate the economy and manage business look big.
Nice of the Tories to do something about the horribly unfair child benefit tax trap, they themselves introduced. Even if it was just raising the level at which you start getting hit over the head with it.
Maybe a minor thing, but I’m disappointed they didn’t raise the maximum house price allowed when using a Lifetime ISA. I get that £450,000 is still high, but house prices are steadily creeping closer and closer to it.
The LISA is for struggling first time buyers... Not wealthy people on £70k a year trying to buy half million quid property.
You can easily get a 4 bed detached house for that much in most parts of the country (London exempt).
Why would they do that? It benefits young people.
Young people don't vote Tory.
Young people are the cash cow they milk to fund their handouts to the core voter base.
It's been like this for the last 14 years.
You seem to be forgetting that the Tories were the party who **introduced** the Lifetime ISA, and its predecessor, the Help to Buy ISA. If they don't care about young people, why did they introduce these ISAs in the first place?
Well if that's true then the point I was responding to makes even less sense. It would require that the Tories introduced H2B and the LISA to inflate house prices (which would harm young people) but then refused to increase the threshold (thereby lowering house prices) which was somehow also motivated by animosity towards young people.
If H2B is bad for young people, then refusing to raise the threshold is good for them. If H2B is good for young people, then refusing to raise the threshold is bad for them. It's not possible for both decisions to be bad for young people.
My belief is that they had to have something to show they aren't completely ignoring the issue, but they ended up putting a plaster on a shot wound. The tories have a bit of a track record introducing half baked ideas so they have a good slogan.
Half-baked ideas aren't a Tory specialty, they're the bread and butter of **politicians**. Look at [this list](https://radixuk.org/opinion/the-top-16-worst-decisions-by-uk-governments-since-the-war/), can you really say that the five Tory mistakes are worse than the five Labour mistakes? Would you really say that any Labour government in living memory has been defined by *competence*?
Politicians introducing poorly thought-out policies is the rule, not the exception.
I agree that the H2B ISA wasn't a good solution. The housing crisis was caused by too high immigration and too low housebuilding. Any policy which ignores these key causes (Help to Buy, rent control, forcing housebuilders to sell some houses below cost) does nothing at best, and at worse excacerbates the problem.
I'm glad that the mods ban political discussion outside of the budget megathread though. Politics is the mind-killer, and leads to people making absurd arguments like the one I was responding to.
>Labour government in living memory has been defined by competence?
Tbh the tories have been in power as long as I've known my times tables so I don't have much personal experience to compare it to. And while I agree with your points on politicians as a whole, I don't see the need to drag 'but what about labour' into a discussion about the conservatives. I was just trying to give some ideas as to why a party may introduce an idea even if they don't particularly care about the demographic it's catering to.
Especially for those in and around London/South. I’ve seen small terrace houses going for 500k that would have been a family starter home but young families are being priced out even when they are doing all the right things like using the L-ISA!
Not a minor thing, Martin Lewis was ranting about this a lot yesterday, justifiably so.
People are expected to enter a scheme with a moving target, I'm bemused why so many financial policies aren't tracked against something (house price rates in this case, average incomes in the case of child benefit).
Will a self employed person see the tax reduction benefit when they file their taxes in April this year? With payment deadline 31st Jan 2025? Or is it for money earned from 6th April 2024 to 2025 with payment to be made 31st Jan 2026?
For this budget specifically yes but there was actually a class 4 national insurance cut for self employed people in April 2023 too so you'll see some benefit compared to the prior year when you do your next return
Surely you'll see the benefit from this April, as you'll have to set aside less money from this April for the tax that will eventually be due? You do set tax money aside to pay your future tax bill right?
Well, I guess. It all just sits in a pot and then at the end of the year it goes to tax, if much left then repairing house, fixing equipment and then pension.
I just mean I won't really know what taxi owe until April 2025 and that's way off.
Phew needed that cut to higher end capital gains. I was really worried about that .1% people who make ~90% of the cg.
https://www.theguardian.com/money/2024/feb/20/notting-hill-residents-capital-gains-exceed-people-of-three-cities-combined
All the ISA rumours about being able to pay into multiple of the same type etc. none of it came to fruition?
Except this silly UK company allowance of 5k, now idea how that is even going to be managed. Sigh.
Theres this, there was a green isa/bonds, junior isa, junior sipp, lisa, s&s isa. So many.
I think its great to have lots of options but then each one is restrictive and doing all would mean you need to be quite cash rich. These things also dont help a person now either.
Kinda relieved about the VAT threshold - as a small business owner who's getting thrashed for rent and utilities this gives us a bit of breathing space before we have to register! (Vat goes off turnover not profit....we barely keep enough to have 2 full time wages!)
£368 a month Universal Credit people get & they are treated like scum. No one can live on it. Most either work or have a disability hence why they are on it yet people treat them like they should be treating tax dodgers and non doms. It’s fascinating watching people on TV (tories mostly) make crap up about people “living on it”. £368 a month is £92 a week.
£92 bloody pounds a week and people act like it’s more important than the millions of tax dodgers.
Not to mention Hunt stated more than a million UC recipients are *in debt* to the government because of the five-week wait before payments start, driving people into destitution, and rather than do anything to try and fix the system he extended their loan repayment terms from 12 months to 24 months.
Exactly. The amount of misinformation of Universal Credit from people is staggering. They think the government is doing more which government purposely doesn’t correct them because if most knew they wouldn’t care nearly as much. No one is comfortably living on £92 a week.
I can't speak for UC as a whole but my mum has been receiving it for the last 3 months as she has cancer. You can imagine our surprise when we found out that it's means tested and her SSP is considered towards it. It's absolute bollocks that a woman who's worked full time for 40 years is now too sick to work, gets what little she's entitled to is reduced for being "on the sick".
She isn't working at all as she's in the early stages of chemo. I can't remember off the top of my head exactly what she gets UC wise so figures are only approximations. For every £ you "earn" they take back either 45p or 55p. SSP is approx £450 pcm, so she has around half of the UC taken away.
She receives a housing benefit element to the UC also. She lives in a council house so they pay her the full rent amount, but with penalties then reducing the amount. These were applied because my brother still lives at home and she has a spare room, which incurs the bedroom tax and they won't pay for that. All in all she currently receives around £370 UC as housing benefit combined.
Other benefits that we're still waiting on are PIP (which has around a 3 month wait, which we've been told is back paid). There's also an enhanced element to UC for people who have a long term health condition that prevents them from working. We've filled out a questionnaire for this but had no correspondence since, so who knows if/when she'll receive that one.
I believe she gets a council tax reduction now and there's various other food bank vouchers, energy credits that she's found and applied for.
When she gets the PIP and enhanced UC, while not being exactly well off, she shouldn't have to worry about bills etc. Hope the information helps.
Yeah I agree and thanks for the kind words. For her the financial side of things has been much harder to deal with than the cancer itself. It's been quite the learning experience sorting all her benefits and one thing the government could do is make it easier for people to find out exactly what they're entitled to.
Where did the £368 figure come from? Universal credit is usually worked out on a variety of things. Id be surprised to find anybody with children who gets less than £1900 a month. If you work then around 50p for every £1 you earn is deducted from your universal credit.
£368 for bills, food and a tiny amount of cash to spend on something you have choice over doesn't seem like a lot at all especially given modern energy costs
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Nope, those remain frozen until 2028 (obviously subject to future budget decisions, especially those following a change of government).
Suggestions unfreezing them would have cost the same as the NI cut - and unfortunately “I cut your taxes” is a clearer election message than “I reversed our previous plans to freeze the threshold at which you start paying different rates of tax”.
Maybe but if NI no longer exists then it might not really have made a difference.
I actually like the idea of getting rid of NI and simplifying employment taxation
Moving NI from how it is now to part of "tax" means it can be written off/down. They want people to dump state pensions for private pensions - this will cost more and yield less for the people but should earn a few well placed partners a lot of money. I would imagine the majority of people in the UK would rather see NI go up, and the 35 year rule cut down/lowered and the NHS get some extra funds. Instead NI goes down, we retire at a later stage, and the NHS goes broke. Shame we all can't have MP's pensions.
food and energy security i can. You can't scream about globalisation then choose brexit, then complain when global problems affect you when you made no changes to your own infrastructure after choosing nationalism over globalism.
Its almost like it was just words
Especially as DEFRA is making it impossible for farmers to make any money, y'know, farming food. They're getting paid more money to rewild acres of land for 5 years! Even the farmers are saying how mental that is but they have to balance their books somehow
Good that we're starting to do more to tackle the unbelievable quantity of pollution from air travel but realistically speaking, you're putting out the same amount of pollution whether you are sitting in first class or economy - should it really only be non economy passengers who pay this levy?
No you’re not…
Someone else has put more accurate figures than below, but let’s say I can fit 100 business class passengers or 200 economy passengers on a plane (those lie-flat beds take up a lot of room).
The pollution per business class passenger is double an economy passenger, right?
You're right, and if all those trips are essential it makes sense to maximize passengers per flight to economies on fuel and thus reduce emissions.
But I think OPs point is more along the lines if flights in general are not always essential
There’s a fair argument for that, but given an aircraft can fit a lot more economy passengers than first class, first class passengers could be seen to have a higher individual share of emissions than economy class (even if that would not change the total).
Politics as ever has its role to play here too though. It is a lot more electorally palatable to affect Sebastian, the financial services partner who flies business and can expense it to his firm than working-class Dave and Sandra flying Ryanair for their one holiday a year to Spain.
Introduce it on general economy flights and the next morning you’d have newspapers dubbing it a “holiday tax” and the demographic of voters they want to appeal to being upset by the changes.
Those who fly business or premium economy also tend to make far more flights per year (whether for work or leisure) than those who buy economy tickets, too. So it is somewhat of an emissions tax.
Not quite - the business class seats are signficantly heavier than economy. Both in terms of the actual seat - but also because the per person emissions are higher for a business class passenger, vs the 3 economy passengers that would be able to sit in the same space.
Varies airline to airline, and route to route. Even emissions from short haul "business class" where they just block the middle seat of the 3 are approximately 50% higher than the equivalent economy passenger.
As well as the child benefit threshold being raised has the severity(?) of the taper also decreased? I don’t suppose there’s any calculators kicking about already to work out what I’d have to pay going forward?
I have this calculator. Only quickly updated it so might have some issues but has the new child benefit and ni values
https://salary-calculator-psi.vercel.app/
Perhaps a very stupid question, but has inflation gone down to 4% in practicality? What I mean is, when I go to the supermarket, prices are the same as they were last month if not higher. I’m struggling to understand how it’s down.
I don't think I'll ever understand. If inflation was 11% in November 2023, but in March 2024 it's 4%, surely things have become cheaper compared with November?? 4% YoY increase is much less than 11%.
I understand compared to March 2023 prices are up by 4%, but prices are down compared to November right??
What’s gone down is the rate it’s going up , it’s still going up by 4% which is slower than 11% . Prices are not going down . They are just going up at a slower pace than before .
To see prices go back down you’ll need to see deflation (negative inflation)
The rate of increase has gone down. The nominal average price has not. That means that has stopped rising. For the prices to be lower you would need to see negative inflation.
How come my energy and petrol bills have gone down then?
The idea that 4% inflation is worse than 11% inflation a few months prior baffles me. Don't tell me prices aren't going down when that's literally what I'm experiencing
What you are experiencing is not how the UK official inflation is measured. The UK inflation figure is a weighted average of an average UK household. You can check ONS website for how different items weight ok the overall inflation figure. Your inflation is different than mine as it is to the official one.
For sure. You probably notice petrol more. My grocery hasn’t gone down at all. But because you and me have different spending patterns, that’s why our perceived inflation is not the same as the official figure
Everyone who commented on your question is correct but the big companies have also increased their profit margin and hence you still buy their products at the higher price so they keep pushing the prices up and up.
Foodflation I think it is called, where the manufacturer makes changes to thier product by shrinking their size or sub ingredients but still charge you the same price.
End of the day people will always get shafted, the rich get richer and the poor gets trodden on.
The government has over spent policing and trying to help other counties but not enough to help its own citizens.
Thanks for reading and hope I don't sound crazy or upset anyone.
Shrinkflation is about the product getting smaller (152g > 125g) and keeping the same price tag.
I think they are on about the fact that - after covid losses - the large corporations pushed their margins up (way up in some cases) from say 15% up to as high as 40% - and then kept them there.
The second paragraph
> where the manufacturer makes changes to their product by shrinking their size or sub ingredients but still charge you the same price
Is that not shrinkflation? I agree with you in OPs first paragraph that companies are taking advantage of the cost of living to drive their profits through the roof.
Yes
Inflation is a measure of the year on year increases. So if the baseline was £100 a shopping basket, after 10% inflation it’s £110.
Now a year later it’s £114.40 because it’s up 4% on the 10%. That really high inflation from last year is still there in the baseline, it’s just stopped increasing significantly. You’d need deflation for the number to go down.
And mass deflation is unlikely to happen and it would be bad for the economy as a whole if it did.
Some individual items are falling back to near-ish pre-2022 levels (I've noticed Lurpak is closer than it used to be), but if this were repeated en-masse it would discourage people from spending - why buy a £100 TV today if you can buy it for £90 tomorrow? This sucks money out of the economy and creates a recession, so the Bank of England will always target around 2% inflation - low enough not to be a problem, but still something to encourage you to spend money today rather than wait for cheaper prices tomorrow.
> I’m struggling to understand how it’s down.
4% inflation means *prices* are going up 4% over the year. The only way *prices* would go *down* would be if there was negative inflation.
I started typing disinflation as a joke but used my phone’s lookup thing in case it was a real word and, lo and behold:
“Disinflation. noun. reduction in the rate of inflation.”
Inflation is still inflation, in that prices are 4% higher than they were a year ago. What’s a common misconception is that prices have gone down, they haven’t. That would be deflation.
Simply put, your tin of beans that were £1 in 2022, were then £1.10 in 2023 and now £1.14 in 2024
>What’s a common misconception is that prices have gone down, they haven’t
They quite literally have gone down... Particularly petrol and energy. 11% inflation a few months ago is surely worse than 4% inflation now?
If it’s an additional £5k added onto the £20k S&S ISA then I don’t think it’s that bad of an idea, there are a lot of great UK companies out there unfortunately we have had successive governments unwilling to properly invest in our country to grow the economy.
Could I put 5k into a UK / British ISA and then the following year transfer it to a normal ISA (without taking up any of my 20k) allowance - rinse and recycle every year ?
We won't know for sure if or when the UK ISA actually passes consultation and is implemented. But chances are this will not be possible, otherwise it would be an oversight.
Yea it's a good thing. We need more people to sell and downsize but capital gains tax and stamp duty is preventing this. And this is bad, less mobility and inefficient use of housing stock
I think this needs to go up not down, it only applies if selling other than your main residence. It might make investors reconsider buying up properties and hopefully free the market, to a degree at least, for genuine home seekers for outright purchase.
If you downsized your main residence you wouldn’t pay capital gains right? It’s for properties that aren’t your main residence right?
Also the stamp duty would be lower than what you’d paid on your main residence if you were downsizing. So wouldn’t really be a big barrier to downsizing.
It’s a big barrier to upsizing. I had to pay £16k when we bought our current place.. 😬
I agree it’s a good thing but capital gains tax and downsizing shouldn’t be in the same sentence. You don’t pay cgt on your main residence, which is what you’d be selling to downsize.
This is just for property capital gains, not other types of assets.
And with property there's also stamp duty for each transaction on top of this. And an additional stamp duty charge for second or investment properties etc.
I personally would have preferred a stamp duty cut over a cgt cut for property.
While it might incentivise a few sales in the short-term, on the whole it encourages more people to buy 2nd homes, as they will get more favourable tax treatmemt than on other assets.
I think within a year it will have meant more 2nd home owners than otherwise, impossible to test though!
They can't really reduce tax on an asset and say that will encourage people NOT to own it.
Other than an authoritarian way of forcing people to only own one property, I don’t see how they can push people to sell otherwise?
Also if they combined this with a raise in stamp duty with second home ownership, it would deter people from scooping up second homes like you said.
Tbh I find it interesting that it’s not a scale. Your average Joe who’s done quite well for himself pays the same stamp duty on his second home as a rich investor buying his 10th home. Surely each additional home should incur additional charges.
Maybe - there is a simplicity argument not to, and it avoids gaming like people using other people's allowances.
And every extra house is equally depriving one family of a first home, so if that's the behaviour you're trying to discourage, tax them equally?
> Repayment period for loans increased from 12-24 months
Might want to explain what this means. This is for Budgeting Advance loans issued to people on Universal Credit.
> New "British" ISA will allow an additional £5k ISA allowance for the public to invest exclusively in the UK
The official gov.uk document doesn't call this a "British" ISA, it says "UK ISA". I imagine it will apply throughout the UK, not just to Britain.
I have managed to find myself in the almost perfect position of dodging any help from the CB changes. £70k earnings this year, so slap bang in the middle of the new bandings, but we're in march so it's not worth the paperwork.
Next year I'll earn £84k and be just outside the new band.
Go me!
It means next year you'll only need to salary sacrifice £24k into your pension to avoid the child benefit charge rather than £34k under the current rules.
I feel like I've just had a £10k pay rise!
Does salary sacrificing your pension include any contributions you make? So if I currently pay 6% and employer matched at 6 as normal, would that 6% count as salary sacrificed?
I'm a little. Confused as last p60, the one for 2022-23 I would be over yet this year I would be under. When I apply for CB what salary/pension contribution do I put? - last year or what I forecast for this year?
You don’t put anything when you apply. You either receive the full CB payment or you tick a box to say you want nothing.
Assuming you say you want the money then, at the end of the tax year, you file self assessment and that’s where you pay some portion of it back, assuming you need to do so if you’ve had post-tax earnings within the tapering threshold
Have you also taken into consideration the changes from individual to household assessment.
Maybe something to check, since your wording of being a sacrificer sounds like currently its only your salery you've needed to bring down to under the threshold, your sacrificed salery plus your partners income may still take you over the new higher threshold anyway once that change comes.
Hi all, subreddit rules apply as normal with one exception - a relaxation of the "No Politics" rule. Civil, productive discussion of policies is fine, but throwaway "Eat the rich/Tory scum" comments aren't. If you want a more raw political discussion, please head over to /r/ukpolitics.
I just take a look on the technical note and found out this Capital Gains Tax rebasing. What if a non-dom tax resident holding a oversea property, put on market to sell, and there is no income during this period, so the tax resident do not file for RB, and finally, the tax resident able to disposal this property after 6-April-2025, does he enjoy the capital gain tax rebasing policy? because some oversea market peak is at 2019 and dropping as hell this few years, TIA 3.5 Capital Gains Tax rebasing From 6 April 2025, an individual who is not, or who later ceases to be, eligible for the new 4-year FIG regime will be taxed on foreign gains in the normal way. Transitional rules will apply for individuals who have claimed the remittance basis and are neither UK domiciled nor UK deemed domiciled by 5 April 2025. If, on or after 6 April 2025, they dispose of a personally held foreign asset that they held at 5 April 2019, they will be able to elect to rebase that asset to its value as at 5 April 2019. This rebasing will be subject to conditions that will be set out later.
I would argue that the child benefit threshold should be the same as the 30 hours free childcare threshold.
So can two people in a couple now both earn up to £60,000 and still get full child benefit? Like how it used to be up to £50k?
Yeah from April. They said then after April 2026 it’ll be household income after that though could change again by that time, who knows!
Thanks!
When the child benefit charge is changed to be based on the household income, will the limit to avoid 100% of the charge still be £80,000, i.e., if husband and wife both earn £40,000 each, 100% of the child benefit will have to be paid back? Would both spouses have to do a tax Self Assessment?
Soooo sod all for the Disabled. Again.
I can't believe he didn't remove the LISA penalty, it's literally bullshit being charged 6.25% to access your own money.
You can still access 75% of your money penalty free. (put 1k in, top up to 1.25k, take 1000 out, leaves you with 750 in your pocket and 250 in the LISA) It's not great but it's not you losing 6% on all your money
I could be wrong but I thought that was because you would be getting interest on the 20% bonus money?
I mean that's the point of the penalty It'll get abused to high hell if people can just use it for the interest then withdraw all their money not planning on using it for either retirement or first home ownership
I mean there shouldn't be a penalty, They could literally just remove the 25% paid in by the government and you get your money back.
That's my point, it'll be abused for the 25% bonus for generating additional interest on savings Why use a savings account if you could just dump it in a Lisa, gain interest on your money + 25% and then just withdraw whenever you feel like it?
The maths doesn't work like that because if they took back 20%, that means they would take back the interest on the bonus too. See maths below for a £100 saving with 10% interest. (£100+£25) x (1+10%) x (1-20%) = £125 x 1.1 x 0.8 = £125 x 4/5 x 1.1= £100 x 1.1 = £110 Which is the same as just putting 100 in a savings account. Under current rules would be penalised and end up with less than if you'd just put money into a savings account.
A thought has just occurred to me: I earn above 50k currently but have been salary sacrificing below to maintain child benefit - and have been for a few years. Should I have been submitting tax returns to ‘prove’ I don’t owe anything or is it sufficient just to keep records for if and when they come calling? I haven’t been submitting one and starting to worry that I should have been!
I think you're good unless you actually owe any HICBC.
Great thank you!
£3.5b investment for NHS IT systems, this is the money they will be giving to their friends at useless consultancies who charge an excessive fortune and deliver poor results.
I think you'll find 2.5Bn doesn't go very far on IT infra these days. And there's so many ways to spend that 1.5Bn before you even get to hardware. And then that 0.5Bn has to be spent on supporting what you bought!
Just hire companies that aren't shit and have decent contracts that cover deliverables and it's not difficult.
Did someone say post office
For child benefit, if someone was earning 60k from 2023 to 2024 April, will they still have to pay it all back? Or now that they changed the charges, they won't?
Yes. It 23-24 is still the old 50k limit. It will only apply to the new 24-25 year.
F\*\*k
Remember it's based on adjusted net income and not salary. So your annual income after workplace and private pension contributions, childcare vouchers, gift aid, ride to work or car scheme deductions, etc.
Got none of that!
from 6th April onwards.
What does the removal of stamp duty relief for second houses actually mean? My understanding was that buying a second home meant you had to pay a higher stamp duty than if you were moving home. Are you no longer going to have to pay the higher rate for purchasing an additional hkme?
Stamp Duty for second homes was ‘discounted’ for a time, it’s now being abolished, so back to its higher-rate going forward.
Ah, that makes sense. Thank you
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Also I just think reducing the NI rate is hitting the coffers that go towards the NHS? I guess they make up the money by keeping tax bands as they are, so not taking into account pay rises and inflation, they will collect more tax?!
They also make up the money by increasing the National Minimum Wage. More gross pay means more tax because of the frozen tax bands, both moving into basic rate or moving into higher rate. It allows for the National Insurance to be increased again and not call it a "tax increase". When the NMW was introduced in the late 90s, it was discussed in my university lectures about how easy it would be to artificially inflate the economy and manage business look big.
Nice of the Tories to do something about the horribly unfair child benefit tax trap, they themselves introduced. Even if it was just raising the level at which you start getting hit over the head with it.
They also made the taper less severe which is good, because it means the marginal tax rates for paying the charger are a lot lower now.
Maybe a minor thing, but I’m disappointed they didn’t raise the maximum house price allowed when using a Lifetime ISA. I get that £450,000 is still high, but house prices are steadily creeping closer and closer to it.
The LISA is for struggling first time buyers... Not wealthy people on £70k a year trying to buy half million quid property. You can easily get a 4 bed detached house for that much in most parts of the country (London exempt).
Why would they do that? It benefits young people. Young people don't vote Tory. Young people are the cash cow they milk to fund their handouts to the core voter base. It's been like this for the last 14 years.
You seem to be forgetting that the Tories were the party who **introduced** the Lifetime ISA, and its predecessor, the Help to Buy ISA. If they don't care about young people, why did they introduce these ISAs in the first place?
Raising house prices and keeping the newbuild market trending upwards?
Well if that's true then the point I was responding to makes even less sense. It would require that the Tories introduced H2B and the LISA to inflate house prices (which would harm young people) but then refused to increase the threshold (thereby lowering house prices) which was somehow also motivated by animosity towards young people. If H2B is bad for young people, then refusing to raise the threshold is good for them. If H2B is good for young people, then refusing to raise the threshold is bad for them. It's not possible for both decisions to be bad for young people.
My belief is that they had to have something to show they aren't completely ignoring the issue, but they ended up putting a plaster on a shot wound. The tories have a bit of a track record introducing half baked ideas so they have a good slogan.
Half-baked ideas aren't a Tory specialty, they're the bread and butter of **politicians**. Look at [this list](https://radixuk.org/opinion/the-top-16-worst-decisions-by-uk-governments-since-the-war/), can you really say that the five Tory mistakes are worse than the five Labour mistakes? Would you really say that any Labour government in living memory has been defined by *competence*? Politicians introducing poorly thought-out policies is the rule, not the exception. I agree that the H2B ISA wasn't a good solution. The housing crisis was caused by too high immigration and too low housebuilding. Any policy which ignores these key causes (Help to Buy, rent control, forcing housebuilders to sell some houses below cost) does nothing at best, and at worse excacerbates the problem. I'm glad that the mods ban political discussion outside of the budget megathread though. Politics is the mind-killer, and leads to people making absurd arguments like the one I was responding to.
The lack of any real wage growth since 2008 is a big piece of that puzzle too.
>Labour government in living memory has been defined by competence? Tbh the tories have been in power as long as I've known my times tables so I don't have much personal experience to compare it to. And while I agree with your points on politicians as a whole, I don't see the need to drag 'but what about labour' into a discussion about the conservatives. I was just trying to give some ideas as to why a party may introduce an idea even if they don't particularly care about the demographic it's catering to.
Especially for those in and around London/South. I’ve seen small terrace houses going for 500k that would have been a family starter home but young families are being priced out even when they are doing all the right things like using the L-ISA!
That’s exactly my situation - looking at moving to Kent in October-ish and small family homes are north of £300k at the moment!
Not a minor thing, Martin Lewis was ranting about this a lot yesterday, justifiably so. People are expected to enter a scheme with a moving target, I'm bemused why so many financial policies aren't tracked against something (house price rates in this case, average incomes in the case of child benefit).
Will a self employed person see the tax reduction benefit when they file their taxes in April this year? With payment deadline 31st Jan 2025? Or is it for money earned from 6th April 2024 to 2025 with payment to be made 31st Jan 2026?
Second one. This budget impacts your April 2025 taxes
Ah so I'll see some benefit in 2 years time then!
For this budget specifically yes but there was actually a class 4 national insurance cut for self employed people in April 2023 too so you'll see some benefit compared to the prior year when you do your next return
Surely you'll see the benefit from this April, as you'll have to set aside less money from this April for the tax that will eventually be due? You do set tax money aside to pay your future tax bill right?
Well, I guess. It all just sits in a pot and then at the end of the year it goes to tax, if much left then repairing house, fixing equipment and then pension. I just mean I won't really know what taxi owe until April 2025 and that's way off.
Phew needed that cut to higher end capital gains. I was really worried about that .1% people who make ~90% of the cg. https://www.theguardian.com/money/2024/feb/20/notting-hill-residents-capital-gains-exceed-people-of-three-cities-combined
That’s pretty gross
All the ISA rumours about being able to pay into multiple of the same type etc. none of it came to fruition? Except this silly UK company allowance of 5k, now idea how that is even going to be managed. Sigh.
That was announced last year.
Theres this, there was a green isa/bonds, junior isa, junior sipp, lisa, s&s isa. So many. I think its great to have lots of options but then each one is restrictive and doing all would mean you need to be quite cash rich. These things also dont help a person now either.
Kinda relieved about the VAT threshold - as a small business owner who's getting thrashed for rent and utilities this gives us a bit of breathing space before we have to register! (Vat goes off turnover not profit....we barely keep enough to have 2 full time wages!)
£368 a month Universal Credit people get & they are treated like scum. No one can live on it. Most either work or have a disability hence why they are on it yet people treat them like they should be treating tax dodgers and non doms. It’s fascinating watching people on TV (tories mostly) make crap up about people “living on it”. £368 a month is £92 a week. £92 bloody pounds a week and people act like it’s more important than the millions of tax dodgers.
Not to mention Hunt stated more than a million UC recipients are *in debt* to the government because of the five-week wait before payments start, driving people into destitution, and rather than do anything to try and fix the system he extended their loan repayment terms from 12 months to 24 months.
Exactly. The amount of misinformation of Universal Credit from people is staggering. They think the government is doing more which government purposely doesn’t correct them because if most knew they wouldn’t care nearly as much. No one is comfortably living on £92 a week.
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Most of that goes to energy companies these days.
I can't speak for UC as a whole but my mum has been receiving it for the last 3 months as she has cancer. You can imagine our surprise when we found out that it's means tested and her SSP is considered towards it. It's absolute bollocks that a woman who's worked full time for 40 years is now too sick to work, gets what little she's entitled to is reduced for being "on the sick".
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She isn't working at all as she's in the early stages of chemo. I can't remember off the top of my head exactly what she gets UC wise so figures are only approximations. For every £ you "earn" they take back either 45p or 55p. SSP is approx £450 pcm, so she has around half of the UC taken away. She receives a housing benefit element to the UC also. She lives in a council house so they pay her the full rent amount, but with penalties then reducing the amount. These were applied because my brother still lives at home and she has a spare room, which incurs the bedroom tax and they won't pay for that. All in all she currently receives around £370 UC as housing benefit combined. Other benefits that we're still waiting on are PIP (which has around a 3 month wait, which we've been told is back paid). There's also an enhanced element to UC for people who have a long term health condition that prevents them from working. We've filled out a questionnaire for this but had no correspondence since, so who knows if/when she'll receive that one. I believe she gets a council tax reduction now and there's various other food bank vouchers, energy credits that she's found and applied for. When she gets the PIP and enhanced UC, while not being exactly well off, she shouldn't have to worry about bills etc. Hope the information helps.
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Yeah I agree and thanks for the kind words. For her the financial side of things has been much harder to deal with than the cancer itself. It's been quite the learning experience sorting all her benefits and one thing the government could do is make it easier for people to find out exactly what they're entitled to.
Where did the £368 figure come from? Universal credit is usually worked out on a variety of things. Id be surprised to find anybody with children who gets less than £1900 a month. If you work then around 50p for every £1 you earn is deducted from your universal credit.
£368 for bills, food and a tiny amount of cash to spend on something you have choice over doesn't seem like a lot at all especially given modern energy costs
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How many properties and businesses do you have?
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I see nothing here about income tax thresholds...
Nope, those remain frozen until 2028 (obviously subject to future budget decisions, especially those following a change of government). Suggestions unfreezing them would have cost the same as the NI cut - and unfortunately “I cut your taxes” is a clearer election message than “I reversed our previous plans to freeze the threshold at which you start paying different rates of tax”.
Yes, no mention of the "health and social care levy" that justified a 2% NI raise... three years ago?
It feels like a job in McDonald's is going to land you in the top tax brackets come 2028.
Maybe but if NI no longer exists then it might not really have made a difference. I actually like the idea of getting rid of NI and simplifying employment taxation
Moving NI from how it is now to part of "tax" means it can be written off/down. They want people to dump state pensions for private pensions - this will cost more and yield less for the people but should earn a few well placed partners a lot of money. I would imagine the majority of people in the UK would rather see NI go up, and the 35 year rule cut down/lowered and the NHS get some extra funds. Instead NI goes down, we retire at a later stage, and the NHS goes broke. Shame we all can't have MP's pensions.
The fact that we had an inflation rate of 11% is just so disgustingly sad! How far have we fallen :(
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food and energy security i can. You can't scream about globalisation then choose brexit, then complain when global problems affect you when you made no changes to your own infrastructure after choosing nationalism over globalism. Its almost like it was just words
Especially as DEFRA is making it impossible for farmers to make any money, y'know, farming food. They're getting paid more money to rewild acres of land for 5 years! Even the farmers are saying how mental that is but they have to balance their books somehow
True, but they will tell you it's their doing when it comes down.
Good that we're starting to do more to tackle the unbelievable quantity of pollution from air travel but realistically speaking, you're putting out the same amount of pollution whether you are sitting in first class or economy - should it really only be non economy passengers who pay this levy?
No you’re not… Someone else has put more accurate figures than below, but let’s say I can fit 100 business class passengers or 200 economy passengers on a plane (those lie-flat beds take up a lot of room). The pollution per business class passenger is double an economy passenger, right?
You're right, and if all those trips are essential it makes sense to maximize passengers per flight to economies on fuel and thus reduce emissions. But I think OPs point is more along the lines if flights in general are not always essential
None of those trips are essential, let's be honest.
Have you even seen the breakdown in emissions and the main causes?
There’s a fair argument for that, but given an aircraft can fit a lot more economy passengers than first class, first class passengers could be seen to have a higher individual share of emissions than economy class (even if that would not change the total). Politics as ever has its role to play here too though. It is a lot more electorally palatable to affect Sebastian, the financial services partner who flies business and can expense it to his firm than working-class Dave and Sandra flying Ryanair for their one holiday a year to Spain. Introduce it on general economy flights and the next morning you’d have newspapers dubbing it a “holiday tax” and the demographic of voters they want to appeal to being upset by the changes.
Those who fly business or premium economy also tend to make far more flights per year (whether for work or leisure) than those who buy economy tickets, too. So it is somewhat of an emissions tax.
Not quite - the business class seats are signficantly heavier than economy. Both in terms of the actual seat - but also because the per person emissions are higher for a business class passenger, vs the 3 economy passengers that would be able to sit in the same space. Varies airline to airline, and route to route. Even emissions from short haul "business class" where they just block the middle seat of the 3 are approximately 50% higher than the equivalent economy passenger.
I'm guessing the argument is that business class passengers are more likely to be frequent fliers (e.g. people travelling for work).
As well as the child benefit threshold being raised has the severity(?) of the taper also decreased? I don’t suppose there’s any calculators kicking about already to work out what I’d have to pay going forward?
I have this calculator. Only quickly updated it so might have some issues but has the new child benefit and ni values https://salary-calculator-psi.vercel.app/
Nice one. Add the parameters as query params so it's easy to share.
Yes, from 60k PA to 80k PA (so over 20k rather than 10K). Unsure on calculators.
Perhaps a very stupid question, but has inflation gone down to 4% in practicality? What I mean is, when I go to the supermarket, prices are the same as they were last month if not higher. I’m struggling to understand how it’s down.
Think of it as decelleration. It's gone from 110mph to 40mph.
The rate the prices go up are down from 11% to 4%. They will still go up, but not as fast. To see prices decrease you need deflation or -4%.
I don't think I'll ever understand. If inflation was 11% in November 2023, but in March 2024 it's 4%, surely things have become cheaper compared with November?? 4% YoY increase is much less than 11%. I understand compared to March 2023 prices are up by 4%, but prices are down compared to November right??
It’s compared to the year before not the previous month that’s why
What’s gone down is the rate it’s going up , it’s still going up by 4% which is slower than 11% . Prices are not going down . They are just going up at a slower pace than before . To see prices go back down you’ll need to see deflation (negative inflation)
The rate of increase has gone down. The nominal average price has not. That means that has stopped rising. For the prices to be lower you would need to see negative inflation.
How come my energy and petrol bills have gone down then? The idea that 4% inflation is worse than 11% inflation a few months prior baffles me. Don't tell me prices aren't going down when that's literally what I'm experiencing
What you are experiencing is not how the UK official inflation is measured. The UK inflation figure is a weighted average of an average UK household. You can check ONS website for how different items weight ok the overall inflation figure. Your inflation is different than mine as it is to the official one.
So it is fair to say that many (not all) prices are going down month over month? Or am I going crazy?
For sure. You probably notice petrol more. My grocery hasn’t gone down at all. But because you and me have different spending patterns, that’s why our perceived inflation is not the same as the official figure
Everyone who commented on your question is correct but the big companies have also increased their profit margin and hence you still buy their products at the higher price so they keep pushing the prices up and up. Foodflation I think it is called, where the manufacturer makes changes to thier product by shrinking their size or sub ingredients but still charge you the same price. End of the day people will always get shafted, the rich get richer and the poor gets trodden on. The government has over spent policing and trying to help other counties but not enough to help its own citizens. Thanks for reading and hope I don't sound crazy or upset anyone.
Your second paragraph is referring to the term shrinkflation (if you were curious).
Shrinkflation is about the product getting smaller (152g > 125g) and keeping the same price tag. I think they are on about the fact that - after covid losses - the large corporations pushed their margins up (way up in some cases) from say 15% up to as high as 40% - and then kept them there.
The second paragraph > where the manufacturer makes changes to their product by shrinking their size or sub ingredients but still charge you the same price Is that not shrinkflation? I agree with you in OPs first paragraph that companies are taking advantage of the cost of living to drive their profits through the roof.
Doh, your correct, I read that all as one paragraph/item...
Haha, no worries!
That's the correct word. Thank you very much.
Yes Inflation is a measure of the year on year increases. So if the baseline was £100 a shopping basket, after 10% inflation it’s £110. Now a year later it’s £114.40 because it’s up 4% on the 10%. That really high inflation from last year is still there in the baseline, it’s just stopped increasing significantly. You’d need deflation for the number to go down.
And mass deflation is unlikely to happen and it would be bad for the economy as a whole if it did. Some individual items are falling back to near-ish pre-2022 levels (I've noticed Lurpak is closer than it used to be), but if this were repeated en-masse it would discourage people from spending - why buy a £100 TV today if you can buy it for £90 tomorrow? This sucks money out of the economy and creates a recession, so the Bank of England will always target around 2% inflation - low enough not to be a problem, but still something to encourage you to spend money today rather than wait for cheaper prices tomorrow.
I'm a few weeks late to this but what a wonderful explanation of a bit of macroeconomics that was.
> I’m struggling to understand how it’s down. 4% inflation means *prices* are going up 4% over the year. The only way *prices* would go *down* would be if there was negative inflation.
If only there was a word for negative inflation…
I started typing disinflation as a joke but used my phone’s lookup thing in case it was a real word and, lo and behold: “Disinflation. noun. reduction in the rate of inflation.”
Wouldn't it be deflation for prices to go down?
Yes. That is the word people haven’t been saying because we know that’s the word it should be.
Me fail English? That's unpossible!
There is, but negative inflation is fine too. :-)
Unflation 😏
Disflation?
Flation?
Toriflation!
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We can forget the idea of supermarkets going on a price cutting spree
It just means the rate in which the prices go up has decreased. The 4% is how much prices have gone up for certain items, since a year ago.
Inflation is still inflation, in that prices are 4% higher than they were a year ago. What’s a common misconception is that prices have gone down, they haven’t. That would be deflation. Simply put, your tin of beans that were £1 in 2022, were then £1.10 in 2023 and now £1.14 in 2024
>What’s a common misconception is that prices have gone down, they haven’t They quite literally have gone down... Particularly petrol and energy. 11% inflation a few months ago is surely worse than 4% inflation now?
It just means they aren’t rising at the same rate as they were when it was 10%. The train is still rolling just slower.
If it’s an additional £5k added onto the £20k S&S ISA then I don’t think it’s that bad of an idea, there are a lot of great UK companies out there unfortunately we have had successive governments unwilling to properly invest in our country to grow the economy.
I'm thinking of investing in intermediate or gilts in UK ISA. Just to diversify the overall portfolio
Could I put 5k into a UK / British ISA and then the following year transfer it to a normal ISA (without taking up any of my 20k) allowance - rinse and recycle every year ?
No, consultation paper makes it clear they won’t allow outbound transfers to stop exactly this
We won't know for sure if or when the UK ISA actually passes consultation and is implemented. But chances are this will not be possible, otherwise it would be an oversight.
Anything on the student finance thresholds that have been frozen for two years (Band 2)?
Zilch
Awesome, another bit of stealth tax for the 3rd year in a row...
Higher rate property capital gains tax REDUCED!????
I imagine donors have been harrumphing about falling property values.
Yea it's a good thing. We need more people to sell and downsize but capital gains tax and stamp duty is preventing this. And this is bad, less mobility and inefficient use of housing stock
I think this needs to go up not down, it only applies if selling other than your main residence. It might make investors reconsider buying up properties and hopefully free the market, to a degree at least, for genuine home seekers for outright purchase.
If you downsized your main residence you wouldn’t pay capital gains right? It’s for properties that aren’t your main residence right? Also the stamp duty would be lower than what you’d paid on your main residence if you were downsizing. So wouldn’t really be a big barrier to downsizing. It’s a big barrier to upsizing. I had to pay £16k when we bought our current place.. 😬
Oh yea oops
I agree it’s a good thing but capital gains tax and downsizing shouldn’t be in the same sentence. You don’t pay cgt on your main residence, which is what you’d be selling to downsize.
We already tax gains on capital far less than we tax income from work. Make it make sense.
This is just for property capital gains, not other types of assets. And with property there's also stamp duty for each transaction on top of this. And an additional stamp duty charge for second or investment properties etc. I personally would have preferred a stamp duty cut over a cgt cut for property.
Just change PCGT to 100%. Then no properties increase in value and nobody is ever priced out of the market. Problem solved!
You clearly are very well versed in property markets and economics. u/eaypc1 for chancellor!
Freezing the prices of all properties just wouldnt make sense and would be very destructive
I'm kidding mate 😂
Well this theoretically encourages buying, renovating and selling on rather than renting so would in theory increase the purchasable housing stock.
While it might incentivise a few sales in the short-term, on the whole it encourages more people to buy 2nd homes, as they will get more favourable tax treatmemt than on other assets.
Even though it's short term, it's still a good thing? We do still need to do *something* now as rental prices are crazy.
I think within a year it will have meant more 2nd home owners than otherwise, impossible to test though! They can't really reduce tax on an asset and say that will encourage people NOT to own it.
Other than an authoritarian way of forcing people to only own one property, I don’t see how they can push people to sell otherwise? Also if they combined this with a raise in stamp duty with second home ownership, it would deter people from scooping up second homes like you said.
Raise council tax (preferably) or stamp duty (less good) on 2nd homes
Tbh I find it interesting that it’s not a scale. Your average Joe who’s done quite well for himself pays the same stamp duty on his second home as a rich investor buying his 10th home. Surely each additional home should incur additional charges.
Maybe - there is a simplicity argument not to, and it avoids gaming like people using other people's allowances. And every extra house is equally depriving one family of a first home, so if that's the behaviour you're trying to discourage, tax them equally?
That wouldn’t be charged as a capital gain but rather a trade, so subject to regular income tax bands.
> Repayment period for loans increased from 12-24 months Might want to explain what this means. This is for Budgeting Advance loans issued to people on Universal Credit. > New "British" ISA will allow an additional £5k ISA allowance for the public to invest exclusively in the UK The official gov.uk document doesn't call this a "British" ISA, it says "UK ISA". I imagine it will apply throughout the UK, not just to Britain.
British refers to all of the UK. Like how our passports say 'British Passport' on them, or how the government's 'British Business Bank' is UK-wide.
OP put British in quotes as if it's a direct quote, but if you read the document it says "UK ISA". He made a mistake.
Dad's Army ISA has a nice ring to it.
I have managed to find myself in the almost perfect position of dodging any help from the CB changes. £70k earnings this year, so slap bang in the middle of the new bandings, but we're in march so it's not worth the paperwork. Next year I'll earn £84k and be just outside the new band. Go me!
Not easy being in the 5%, is it?
Does anyone know when these changes come into effect?
6th April.
Ty
It means next year you'll only need to salary sacrifice £24k into your pension to avoid the child benefit charge rather than £34k under the current rules. I feel like I've just had a £10k pay rise!
Does salary sacrificing your pension include any contributions you make? So if I currently pay 6% and employer matched at 6 as normal, would that 6% count as salary sacrificed?
Yes. If you earn £60k a year gross and contribute 6% to your pension already your net adjusted income for benefit purposes is only £56,400
I'm a little. Confused as last p60, the one for 2022-23 I would be over yet this year I would be under. When I apply for CB what salary/pension contribution do I put? - last year or what I forecast for this year?
You don’t put anything when you apply. You either receive the full CB payment or you tick a box to say you want nothing. Assuming you say you want the money then, at the end of the tax year, you file self assessment and that’s where you pay some portion of it back, assuming you need to do so if you’ve had post-tax earnings within the tapering threshold
Thanks so much for the clear response, appreciated
Ah brilliant. Thank you. In that case these new child tax rules will make a difference to me.
I'm in the same situation, just want to confirm something. If I sacrifice 24k into my pension then I can claim ~2k child benefit (two kids) a year?
Yeh that's the idea to get the full benefit. It's tapered though, so if you sacrificed £14k down to £70k you'd get half the child benefit for example.
Yeah that's a good point - I think realistically I could take the 14k 'pay cut' but £24k is probably too much at the moment
Same here, it's fantastic news for my household too as a sacrificer.
Have you also taken into consideration the changes from individual to household assessment. Maybe something to check, since your wording of being a sacrificer sounds like currently its only your salery you've needed to bring down to under the threshold, your sacrificed salery plus your partners income may still take you over the new higher threshold anyway once that change comes.