Gordon Browns Budget

[gemini]

After listening to this on the TV, it seems I will be quite well off by comparison after this.

Alcohol goes up in line with inflation with duty on spirits frozen.
Petrol duty held for 6 months
And your wages now need to be £43k before you pay the large tax.

Seems pretty good. Anyone elses thoughts ?

http://news.bbc.co.uk/1/hi/uk_politics/6472999.stm

[catbeef]

minimum wage doesn't cover the minimum living costs in london. maybe someone should fix that to form some logic.

[Joey]

the £43k higher rate limit doesn't take effect until April 2009.

in the meantime though it looks like NI contributions will be paid in full (11%) on everything below the income tax higher earnings limit, so anyone earning between £30k and £35k will notice a sharp dip in income

basically, from april 2008 you'll be paying 31% tax on everything between £6k (ish) and £38k (ish), and 41% tax on everything over

[Gunsmith]

ouch

[Joey]

it's the usual budget tactic; anything beneficial takes at least 12 months to implement, usually 2 years, sometimes 3. this is all down to the complexities of the changes and administrative overhead etc.

anything negative somehow can be done same working day though...

[bacardibatman]

minimum wage doesn't cover the minimum living costs in london. maybe someone should fix that to form some logic.

why should someone in london get paid more just so they can live in a place that has more goin on ,i should get paid more cos i have to travel toa place to do all he stuff they can
LONDON does not = England

cant afford to live there MOVE

[MONK]

The big things look ok.....

# Basic rate of income tax to fall from 22p to 20p from April next year.

Works well for me.

# Beer will rise by 1p

Looks almost under inflation no sure on total tax.

# An increase in the annual Individual Savings Accounts investment limit from
April 2008 to £7,200, with an increase in the cash limit to £3,600.

Handy

# Increasing funds available through the Low Carbon Buildings Programme to
a total of over £18 million to help meet demand for microgeneration
technologies.

I always thought if you were going to do this give it a good amout of cash say about 50 million.

[bvark]

Moving higher rate tax boundary from £34,600 to £43,000 is pretty generous (worth £1,600 a year to those earning >=£43K), quite surprising from a left-wing government (although it only costs £250m/yr vs £8bn for 2p off the basic rate).

Not having moved stamp duty thresholds up in 7 years (despite average house prices having well over doubled) is less pleasing.

The NIC thing is phased - it's £75/week over indexation in 2008, with all of it in 2009.

[AdamR]

Heard this on the radio, a bit of good news for once :) I think they described it as a wage tax from 22p to 20p or something.

[Demondan]

minimum wage doesn't cover the minimum living costs in london. maybe someone should fix that to form some logic.

On the whole you get paid more in london anyway surely?

[Joey]

FYI - according to excel the overall tax burden for anyone earning under £27000 will INCREASE as a result of these changes.

anyone earning over will notice a cut, the biggest gap being around the 33k-42k mark earners.

coincidentally, these earners happen to be the demographic who are most likely to switch from labour to conservative at the next election...

[BugAlugs]

does your caluclation include the array of benefits for those under £27k ?

[Joey]

my calculations refer purely to income tax

[bvark]

Not sure I agree on the cost of the NI changes.

The upper earnings limit on NI in 2007/08 seems to be £34,840 (£670/week- http://www.hmrc.gov.uk/rates/nic.htm), so I don't see how people earning £30-35K would be penalised by any changes in 2008/09.

[kalleth]

On the other foot, i LOVED david camerons rebuttal of mr brown's budget. Most funny parliamentary speech i've seen all year.

[Joey]

Not sure I agree on the cost of the NI changes.

The upper earnings limit on NI in 2007/08 seems to be £34,840 (£670/week- http://www.hmrc.gov.uk/rates/nic.htm), so I don't see how people earning £30-35K would be penalised by any changes in 2008/09.

that's the difference between doing maths in my head (NI) and in excel (income tax)

i'd got it stuck in my head that there was a larger disparity between the NI UEL and the income tax higher rate limit which didn't help :)

[catbeef]

why should someone in london get paid more just so they can live in a place that has more goin on ,i should get paid more cos i have to travel toa place to do all he stuff they can
LONDON does not = England

cant afford to live there MOVE

someone should be able to live anywhere they want and not have to chose between somewhere to live or starve. i am not saying the minimum wage in london only should be raised.

sure, i could easily move to nottingham and buy a house for £150 and a twix. but i don't want to. i was born here, i don't see why i should have to move just to afford to stay alive..

On the whole you get paid more in london anyway surely?
if you're a bank manager, prob~ but not when you're flipping burgers or something .-.

[Afty]

minimum wage doesn't cover the minimum living costs in london. maybe someone should fix that to form some logic.It has perfect logic - London is an expensive place to live, if you're only capable of earning minimum wage you need to move away to a less expensive place to live.

How hard is it to understand that?

[Afty]

someone should be able to live anywhere they want and not have to chose between somewhere to live or starve....

i don't see why i should have to move just to afford to stay alive...You should have to move because you're not willing to pay for it.

You seem to be asking for SOMEONE ELSE to pick up the bill so that you can afford to live in a very desirable place.

After all, if I mentioned that minimum wage is not enough for me to live in a Chalet in some Swiss Ski Resort why should someone ELSE fund my living there?

[Afty]

;614930']FYI - according to excel the overall tax burden for anyone earning under £27000 will INCREASE as a result of these changes.Indeed, it feels like a very bad budget for a country with an increasing disparity between rich and poor.

Further, it should be noted that the lowering of Corporation Tax (tax on the profit of companies) is only on the top end... small businesses are getting an INCREASE in corporation tax, partially to pay for this.
Considering the health of our economy is based much more on small businesses than large businesses - and that small businesses have been hit very hard already under Labour over the last decade this is an expected but VERY unwelcome change.

[Unplugged]

If they have dumped the 10% lower band on Income Tax then a 2p reduction for the majority of people wont mean squat.

[Say_Ten]

If they have dumped the 10% lower band on Income Tax then a 2p reduction for the majority of people wont mean squat.

Although are they not supposed to go into different pots?

[catbeef]

i dislike the capitalist spirit going on. *thread depart*

[Baroness]

Pleased about the increase in ISA level from £3000 to £3600 WEF April 2008 - although would have been even more pleasing had it taken effect from this April. But nevertheless a good move.

Also, I used the BBC budget calculator to assess approximately whether I would be better or worse off under the new income tax rates. I was surprised to find that I will in fact be better off. Although that of course will be nicely swallowed up by the predictable rise in interest rates that's shortly forthcoming.

Being an adult can be so boring at times...

[Say_Ten]

I'm paying less NI and income tax. Think you're interpretations are screwy Jo ;p

[Murray-Mint]

BBC says +£30 for me. Still won't stop me voting Conservative.

[Blind]

I persoanlly think GB has screwed up on this one

If your a low earner - eg say £12,000 per year your going to pay more income tax.

Example

Pre Budget

12,000 gross income - 5000 Personal Allowance =7,000 taxable
2000 at 10% = 200
5000 at 22%= 1100

Total tax = 1300

After Budget

12,000 gross income - 5000 Personal Allowance =7,000 taxable
7000 x 20% = 1400

Lets try with a middle income earner

Pre Budget
30,000 gross - 5000 PA = 25,000 taxable
2000 @10% =200
23,000 @22% = 5060

Total 5260

After Budget

30,000 gross - 5000 PA = 25,000 taxable
25,000 @20% = 5000

So much more helping the lower wage earners. Once people relaise what exactly has happened I don't think people will be too please with GB

Disclaimer - I know the actual persoanl allowance/tax bands are not accurate, i rounded them for clarity. I have also ignored Benefits/NI etc...

[Blind]

Indeed, it feels like a very bad budget for a country with an increasing disparity between rich and poor.

Further, it should be noted that the lowering of Corporation Tax (tax on the profit of companies) is only on the top end... small businesses are getting an INCREASE in corporation tax, partially to pay for this.
Considering the health of our economy is based much more on small businesses than large businesses - and that small businesses have been hit very hard already under Labour over the last decade this is an expected but VERY unwelcome change.

The prase give with one hand and take away with another sprang to mind when looking at the Corporation Tax changes this year.

It's even worse when looking at the changes since GB came to be chancellor.

Several years ago everyone was enouraged to incorporate their companies with the 0% tax rate. Then came IR35 which affected IT contractors.

Last year they scraped the 0% banding , now they increase the lowest % from 19 to 22%.

Madness.....

[ninachao]

I don't like him...

[Andy^]

I don't like him...

Why thank you for that insightful spam post. Please spam elsewhere in the world as we don't want anything from the link you're sure to post once you get to 10 posts.

Back on topic: Costs of public transport are becoming ridiculous. Minimum wage doesn't increase, but costs of travelling by public means increases steadily every year and now (for a non-oyster card holder) it costs £2 per journey made on a bus. Unsure of train fare increases but in the 4 years I have lived in Hackbridge the cost of travelling to Sutton (2 train stops down the line) has gone from £1 upto £2.80 return.

Also its getting harder & harder for people like myself to actually get a job. I have one formal qualification (a City & Guilds level 2 in Literacy) and I achieved that just before christmas just gone. But any half-decent paying job, that I know I could do, and probably do with ease will never give me an interview because it doesn't say I have "8-10 GCSE's grade C or above" So i am limited in the jobs I can actually apply for with a reasonable chance of being successful in the application process. It means I can only realistically apply for a job that will give me a 10-12k Salary. Now take into account the costs of travelling, living in London & paying my bills. I could BARELY afford it if I lived alone. In fact I probably couldn't afford to live alone.

http://news.bbc.co.uk/1/hi/business/6442161.stm
Just read through that & really, I'm glad I don't try & keep up politics. There isn't anything I understand fully in there! :p

-Andy :D

[Say_Ten]

I have also ignored Benefits/NI etc...

Which in reality, you admit yourself really, you can't do to appreciate the big picture.

[Er00]

Back on topic: Costs of public transport are becoming ridiculous. Minimum wage doesn't increase, but costs of travelling by public means increases steadily every year and now (for a non-oyster card holder) it costs £2 per journey made on a bus.

Why don't you just get an Oyster card then? :P

[RocketKnight]

Now take into account the costs of travelling, living in London & paying my bills. I could BARELY afford it if I lived alone. In fact I probably couldn't afford to live alone.
That comes back to what Afty pointed out to CatBeef. You don't have a right to live in London. Living in a nice place costs money and if you don't have it you can't live there. Not really budget related I'm afraid. :(

[evs]

I think that this years budget would have been considerably different had GB not been going for the Prime Minister position.

[Joey]

http://news.bbc.co.uk/1/hi/business/6479145.stm

Looks like I was right (ish)

Anyone earning less than £17000 a year will be worse off.

[AdamR]

Big pile of gay... I earn like £4000 a year... (part time)

[Afty]

Big pile of gay... I earn like £4000 a year... (part time)I think Joey meant anyone in full time employment (so earning 10k +)

If you're part time and earning only £4000 that falls under the personal exemption so I don't think you would pay any tax at all on that?

[AdamR]

I currently don't. I don't think I pay NI either.

However during university holidays, I do a lot of overtime resulting in NI/TAX, the tax however I can claim back.

Would be a real kick in the nuts if I started getting charged a high rate.

[Blind]

Which in reality, you admit yourself really, you can't do to appreciate the big picture.

A while back a looked at a report on the marginal rate of tax people pay at different pay levels.

Instead of a smooth line liek you'd expect it jumps all over the palce, mainly due to working/childrens tax credit. You'd need a week to work it all out properly ;/

[-Sp-]

Acording to the BBC thing I'm £50 better off from income tax and £50 worse off from fuel so then I'm only looseing about £20 quid on booze so over all I'm £20 down which isn't so bad I guess....

[Say_Ten]

Well, quite but ignoring the big picture isn't fair either. It's all right to point and say, look, they're being screwed! For a whole £10 a month but they also have available to them benefits. In the big picture, it's not a lot of money from those losing out tbh but turns out to be fine for the "we hate whoever is in power band wagon".

[Afty]

I'm £20 down which isn't so bad I guess....Seeing as our economy grew approximately 3% this year I'm of the belief that everybody should be about 3% better off (give or take) after the budget. But as many people are worse off, and those who are better off appear to be < 1% for the most part, I would say we got screwed again...

[bvark]

Seeing as our economy grew approximately 3% this year I'm of the belief that everybody should be about 3% better off (give or take) after the budget. But as many people are worse off, and those who are better off appear to be < 1% for the most part, I would say we got screwed again...

You're expecting your overall tax burden (which is what the "what does the budget do to you" stuff calculates) to be 3% lower y-o-y?

I think your increased standard of living is more likely to come from the above-inflation pay rise you got because the country became more productive...

[Cen0bitE]

You're expecting your overall tax burden (which is what the "what does the budget do to you" stuff calculates) to be 3% lower y-o-y?

I think your increased standard of living is more likely to come from the above-inflation pay rise you got because the country became more productive...

as long as you dont work in manufacturing, which trust me is dying on its arse, if your factory isnt closing you're being replaced with cheap labour from the poor eastern european countries.

no its not a cliche, i work in a job centre, i've seen the trends first hand over the past five years. its not a racist cliche to say that immigrants are taking peoples jobs. most people in manufacturing are now lower paid than they were 5 years ago, i have seen large manufacturing companies who used to employ their staff full time, with good benefits, pensions etc, drop their old staff like a bad habit and replace them all with cheap labour on minimum wage through agencies.

the growth of the economy is generally all in the financial and services industry and it wont last, it never does.

[Baroness]

I don't feel I got screwed.

[Cen0bitE]

I don't feel I got screwed.

would you like to?

:eek3:

;P

[Mu5icMan]

Did you know that Brown is trying to scrap the loophole in Small Businesses offering dividend payouts.

[Afty]

You're expecting your overall tax burden (which is what the "what does the budget do to you" stuff calculates) to be 3% lower y-o-y? Kinda, I just believe in reducing government spending from its' current levels, and am of the opinion that the easiest way to do so is a spending freeze - making gains in productivity a big boon for the individual...

Perhaps I was a little illogical in that sentence - but as the country gains in productivity, I fail to see why the tax burden should not be reduced by a reasonable amount (providing that the level of services provided for by those taxes stays the same).

[Andy^]

That comes back to what Afty pointed out to CatBeef. You don't have a right to live in London. Living in a nice place costs money and if you don't have it you can't live there. Not really budget related I'm afraid. :(

I was born in London, raised in inner city london & have since moved to london suburbs with my family. I think I have the right to continue living in the city I was born and raised in.
As a side note though, where i've lived in london can't really be classed as a "nice place" :p

Er00, I used it as an example, I do have an oyster card but I lack the ability to travel on busses for extended periods because I get motion sickness in cars, coaches and busses! (I take medication to stop me vomiting if its a special journey)

-Andy :D

[Blind]

Did you know that Brown is trying to scrap the loophole in Small Businesses offering dividend payouts.

Eh?

He did that last year to be honest scrapping the 0% Corporation Tax rate.

For smll companies they will pay extra tax on the profits they earn, the owner will then pay tax on the dividends once paid (assumign higher rate).

To my knowledge nothing has changed re dividends from last year.

[Mu5icMan]

Regarding dividends i meant that if i was the owner of a small business and I was the only employee i could take a dividend payout every xx weeks and only pay 10%. No personal Tax and no NI to pay.

[Joey]

if you're self employed you have to pay flat rate NI contributions and NI contributions based on the company profits

and there is still some tax liability on dividend payouts although it's not as high as PAYE income tax

if you're self-employed, get an accountant. simple.

[Afty]

;615821']if you're self employed you have to pay flat rate NI contributions and NI contributions based on the company profitsI'm not sure about "these days" but a few years ago assuming you were making decent money on your own, it was far more advisable to incorporate than to be "self employed" - no PAYE scheme, no NI.