Osborne hands out tax cuts - for companies

First thoughts...

Income Tax personal allownce goes up to £7465, saving around £200 p.a. for low income workers.

VAT goes up to 20% while 'essentials' stay exempt.

A 'low income' worker would have to spend approximately £10,000 on VAT rated products to negate the gain from changes to income tax.

£10,000 (VAT inc) is around £8510 (VAT ex) --> £8510 x 1.2 = £10212

How many people on 'low incomes' have a spare £10,000 (after food, housing costs, etc) to buy 'luxuries'?

Expect the retail sector to have a bumper Christmas, then

as everyone rushes in to buy expensive stuff before the VAT rise. And those who already own a "Beat the VAT increase" sign will be able to get another round of use from it.

well, on the bright side

at least we can calculate VAT figures in our heads....

You forgot the tech bit

Broadband tax has been scrapped.

Here's an idea

Why don't the tax avoiding millionaires in the Tory party start by paying the tax THEY ARE SUPPOSED TO. They are odious cunts in that respect, it has to be said. (Apologies for using strong lanugage El Reg, it's how I feel)

VAT up 14.3 %

I think you'll find it's a 14.3% increase in VAT.

Bits of good news, but is it enough?

The best news is tightening up on housing benefit. That'll help push rents a little lower for the priced-out who don't get benefits. And house prices too, as lower rents make them that little bit less attractive to property pimps. But still nothing to incentivise owners of empty properties to bring them into use (or rather, penalties on hoarding).

The other good news is of course the reductions in corporation and employment taxes.

Now we just have to wait to hear what's getting cut!

iIndirect Taxes are Generally Regressive ad Let See How They Will Tax Risk?????

VAT and other indirect taxes are never fair. They impose a disproportionate tax burden on low and middle income earners. They benefit the wealthy because they spend a smaller proportion of their earned income and hence pay a lower proportion of that income as taxes. The hidden agenda of indirect tax supporters is always that it reduces the taxes paid by high income earners.

The poor may not be so hard hit because they get other social benefits from the state but middle income earners will surely share increased burden.

Fair taxes can only be progressive. Increased reliance on indirect taxes is never fair.

Any proposal to reduce commercial bank's risky behavior is to be welcomed. But I would expect the more rational approach would have been to use legislation to curb risky behavior. Now the public sector will have to employ a set of professionals to do subjective risk analysis on banks balance sheets to impose taxes. Lets see how risk can be quantified and taxed. Sounds good but may not be practical. And may not be the most efecatious policy.

Fairness of the tax system

The tax allowance has increased, so low income workers will receive more in their pocket.

VAT goes up. The low income worker is still going to come out quids in. Chances are they - being low income workers - won't be spending as much on non-essentials than a middle or high income earner. So they should definitely be quids in and benefit from these tax changes.

Personally, I don't have a problem with that. Life is hard as a middle income earner, going to be even harder if you're a low income earner, so I say, let them have a bit more.

Fairness? Why is is fair that someone who earns more should pay a higher rate of tax just because of that?

If a low income earner and high income earner are taxed at the same rate, then the higher income earner actually pays more actual tax to the government. Everybody is charged at the same percentage rate. That's fairness. where something applies equally to all.

The current tax regime isn't fair. The more you earn, the higher the percentage rate of tax you pay.

If you don't like the idea that poor people get a bit more as a result of the changes, then logic also requires, that you don't agree with the tax system in general.

IR35 came about, really through jealousy. Oh sure, the big corporate consultancies lobbied for it, but the Labour government and Dawn Primarolo supported it, if they were honest, because they saw it as rich people making even more money by 'working' the system.

Low paid civil servants along side highly paid IT contractors. I encountered it personally, I think most contractors have..being ribbed about how much money they earn.

"Look Mr. Civil Servant, if you want to earn the money I do as a contractor, then *you* go out and do it". But few really did. Didn't have the right go-getter confident personality you see, happy there in their safe, cushy low paid stress free jobs, without any pressure from their manager to deliver to time and to budget, where there's no competition, where they can claim an extra 13 days holiday a year, disguised as "sick leave".

Along came IR35., and what a f**k up that was. And we told them it would be..and we were proved right..but you see, too embarassing to overturn legislation that doesn't work isn't it Mr Brown? Not big enough to admit they got it wrong. Total a*holes.

I'm sure most people would have had more respect for them if they admitted they got it wrong and simply put it right. That would have been the right thing to do.

They had IT professionals, accountants and lawyers, business leaders all telling them they'd got it wrong.

Taxing millionaires

Chris,

The point is that milionaires *do* pay the tax they're supposed to. If they didn't, it would be tax evasion and illegal and they'd risk prosecution and imprisonment.

I think what you really mean, is that it's not right that overall, they get away with paying a reduced amount of tax on their income. That's not illegal, it's within the rules, if they know what the rules are and employ good accountants to get around the rules. It's called tax avoidance. It's legal.

The way one deals with this is by introducing new legislation and making what are currently legal activities and make them illegal.

However, being rich c**nts are you so eloquently put it, they'll use their massive financial resources to try to find other ways around the rules - other legal ways, that is.

I doubt that all avenues can be closed down entirely.

And I doubt that, taxing a few hundred millionaires, given they'll seek other ways around paying tax, is really going to make that much difference to the tax income the government receives, at least not as much as taxing the other 20 million workers a little more.

And these people, can take themselves off shore, to tax havens, or move completely.

These millionaires are also business leaders, and we need these people to help our economy.

So whilst things may not be fair, at the end of the day, it's a question of being pragmatic.

I'd stop worrying about the rich and feeling jelous, and I'd try to figure out a way of making yourself rich rather than feeling bitter at those that have made it.

And incidentally, I'm flat broke..as flat broke as it is possible to be.

Hmmmm

threshold of start of tax to go up....so more people earn/take-home more money...

So: What happens if you are in receipt of child tax credit/working tax credit ?

Your "income" is higher, so the amount you receive back from the revenue is lower.....

Housing benefit is paid by the local council.....so where the £100,00.00 claimant lives I do not know....probably not far from Westminster.

HB not just paid to council houses

Housing benefit is not just paid to people living in council properties. Many people live in private rented accommodation or housing association properties and claim housing benefit to help pay for the rent partly or in it's entirety.

Personally, i can't understand the benefit culture as people say that they are better off on benefits which is a load of rubbish - it may be initially but once you've stuck at a job for a while and move up the ranks it certainly isn't. Stopping this culture should be #1 on any governments agenda, so as far as the budget goes, it's a step in the right direction.