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UK Budget - Autumn 2017


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Various predictions floating about but I thought these were average and concise assessments:-   

 

Budget 2017: Chancellor Philip Hammond 'to target housing and NHS'

By Nicholas WattNewsnight political editor       17 November 2017 v    -     From the sectionUK Politics       http://www.bbc.co.uk/news/uk-politics-42034392
 
 

'About to turn a corner'

The £26bn was dubbed a "war chest" - designed to help him navigate the economy through Brexit.  Stephen Hammond, who has known the chancellor for more than 20 years, told BBC Two's Newsnight that the chancellor was planning to use the Budget to reach out to voters who had abandoned the Tories.  The party lost its overall parliamentary majority in June's election, with voters in every age group up to their late 40s preferring Labour. Housing was cited as a key concern by younger voters.    The Financial Times reported last month that about two-thirds of the chancellor's "war chest" may have been wiped out in light of what Treasury officials described as a "bloodbath" in the public finances.  The warnings came on the eve of a report by the Office for Budget Responsibility highlighting poor productivity.  Amid this background, Stephen Hammond predicted that the chancellor would not abandon his reputation as a cautious figure. He said the chancellor would not deviate from his fiscal rule which is to reduce the budget deficit to below 2% of national income by 2020-21.  The former minister said: "It's a bit like running a marathon getting to the last half mile and saying, oh hell - I'll turn round and go back to the start. Philip isn't going to do that.  "It would be absolutely madness to give up on getting the economy and the finances back into a good shape."  Anneliese Dodds, the shadow financial secretary to the Treasury, said the chancellor should outline ambitious plans to tackle income inequality. A government source said the chancellor would adopt a balanced approach on his Budget.

 

&

 

Changes already earmarked for next April and subsequent financial years include:

 

  • A manifesto pledge to increase the personal allowance - the amount earned before income tax is paid - to £12,500 by 2020-21. This currently stands at £11,500
  • The threshold for higher rate of tax has also been pledged to increase to £50,000 by 2020-21. At present it is £45,000, except in Scotland (owing to devolved powers) where it is £43,000. The Scottish government will announce its intentions for the higher rate in December
  • Many working-age benefits will be halfway through a four-year freeze by April. These include Jobseeker's Allowance, Employment and Support Allowance, some types of Housing Benefit, and Child Benefit. However, state pensions, Maternity Pay and some disability benefits are excluded. This is on course to save the Treasury £4.6bn, according to the Institute for Fiscal Studies (IFS)
  • The roll-out of Universal Credit - a merger of various benefits - to new claimants and re-claimants continues. This is less generous than the system it is replacing
  • The gradual process allowing people to pass on property to their descendants free from some inheritance tax will enter its second year. It will reach its target by 2021
  • Many buy-to-let landlords are seeing the amount of tax relief that they can claim on mortgage interest payments cut over the course of four years. The process began in April. Eventually, they will only be able to claim at the lower rate of tax, not the higher
  • Director shareholders will see a tax break reduced on the dividends they receive. The tax-free dividend allowance - which came into force in 2016 - will be reduced from £5,000 to £2,000 from April. That will affect those who own a small business and pay themselves in dividends alongside a small salary and people with large portfolios of shares, perhaps by hundreds of pounds
Dividend table

One thing that was set to change, but will no longer happen in April is the abolition of class 2 National Insurance contributions.  This flat rate paid by self-employed workers making a profit of more than £6,025 a year was expected to be abolished in April 2018 but this has been deferred by the government for a year pending a further review. Also in the world of work, from April of next year public sector employers will have to decide whether freelancers are really self-employed or should be staff - a move many believe could be extended to the private sector.

Pay rises?

The cap on public sector pay rises in England and Wales has been in place in some form since 2010.  However, the government has already announced that ministers will now get "flexibility" to breach the 1% limit.

Police officers have already been offered a 1% rise plus a 1% bonus, with prison officers offered a 1.7% rise - both funded from existing budgets.  Public sector pay was frozen for two years in 2010, except for those earning less than £21,000 a year, and since 2013, rises have been capped at 1% - below the rate of inflation, which currently stands at 3%.

 
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Summary of key bits on the personal level rather than the other business ones:-      http://www.bbc.co.uk/news/uk-politics-42056452

Full details here...   https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661583/autumn_budget_2017_print.pdf 

 

Personal taxation and wages

  • Tax-free personal allowance on income tax to rise to £11,850 in April 2018  (only 3%)  
  • Higher-rate tax threshold to increase to £46,350  (also 3%)  
  • Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
  • National Living Wage to rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.

The state of the economy

  • Growth forecast for 2017 downgraded from 2% to 1.5%
  • GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
  • Productivity growth and business investment also revised down
  • Annual rate of CPI inflation forecast to fall from peak of 3% towards 2% target later this year
  • Another 600,000 people forecast to be in work by 2022
  • £3bn to be set aside over next two years to prepare UK for every possible outcome as UK leaves EU

The state of the public finances

  • Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
  • Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23
  • Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year, then 1.9%, 1.6%, 1.5% and 1.3% in subsequent years, reaching 1.1% in 2022-23.
  • Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year; then 86.1%, 83.1% and 79.3% in subsequent years, reaching 79.1% in 2022-23.

Alcohol, tobacco and fuel

  • Vehicle excise duty for new diesel cars not meeting latest standards to rise by one band in April 2018
  • Tax hike will not apply to van owners
  • Existing diesel supplement in company car tax to rise by 1%
  • Proceeds to fund a new £220m clean air fund
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Had to search a bit but here are the NIC rates from 2018/19...........

 

Nation Insurance becoming a larger percentage of taxation, PAYE income tax threshold just rising with CPI inflation ie 3% as we know from above.

 

PAYE saving for everyone earning over £11,850 pa is about 30 pence a day better of per working day.  

The £5 pw rise in the NI threshold would make same person, up to the old £45k old threshold, 13p per working day better of.

Tota therefore is about 43p a day better of through less tax.    £2 a working week.   

 

    

https://www.gov.uk/government/publications/autumn-budget-2017-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances 

National Insurance Contributions (NICs)

Class 1 NICs: Employee and employer rates and thresholds and allowance (£ per week - except where stated)

  Tax year 2017 to 2018 Tax year 2018 to 2019
Weekly Lower Earnings Limit (LEL) 113 116
Weekly Primary Threshold (PT) 157 162
Weekly Secondary Threshold (ST)13 157 162
Upper Earnings Limit (UEL)14 866 892

 

Edited by lol-lol
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Another slant...................

===================================================================================================

Budget increases to income tax thresholds gift £340 to higher rate payers - but £100 is nicked back by National Insurance

  • Chancellor increases the personal allowance from £11,500 to £11,850
  • Higher rate of income tax will become payable at £46,350 from next April
  • Basic rate taxpayers stand to see their income tax bill reduced by £70 

 

Higher rate taxpayers will see their personal income tax bill cut by up to £340 next year, while basic rate workers will see a lower annual reduction of around £70.  But national insurance contributions - whose limits rise in line with consumer price inflation - will distort the picture of the total taken from salaries via PAYE: lower rate payers will pay £30 less NICs a year, and higher-rate payers £100 more.  From next year, the minimum threshold for income tax becoming payable, also known as the personal allowance, will be increased to £11,850, up from the current level of £11,500.  The threshold for people paying the higher rate of income tax, which currently stands at 40 per cent, is rising from £45,001 to £46,350 in April.  Patricia Mock, tax director at Deloitte, said: 'The combined personal allowance and higher rate threshold changes will mean that a basic rate taxpayer will increase their post-tax income in 2018/19 by £70 compared to 2017/18 and a higher-rate taxpayer by £340 in 2018/19 compared to 2017/18. 

 

Read more: http://www.thisismoney.co.uk/money/news/article-5108171/How-Chancellor-s-Budget-cut-tax-bill.html#ixzz4zE9b8sUF     Follow us: @MailOnline on Twitter | DailyMail on Facebook

 

469ADBF500000578-5108171-image-a-31_1511370526286.jpg

 

Edited by lol-lol
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Cons looking after their usual crowd.....

 

https://www.theguardian.com/politics/2017/nov/23/higher-rate-uk-taxpayers-gain-most-in-budget-changes 

 

Higher rate UK taxpayers gain most in budget changes

Rise in personal tax allowance benefits higher ratepayers by £340 a year with basic rate band £70 better off and universal credit recipients better by just 50p per week

 

a wad of £20 notes  The more you earn, the more you stand to gain with the latest changes to personal allowances. Photograph: Alamy Stock Photo

 

Patrick Collinson and Rupert Jones

Thursday 23 November 2017 06.00 GMTLast modified on Thursday 23 November 2017 12.46 GMT

Higher rate taxpayers will be £340 a year better off after budget changes to income tax, but lower earners will gain just £70 and those on universal credit just 50p a week, as the chancellor rejected accusations that the well-off do not pay enough tax.  The personal allowance – that part of your pay not liable for income tax – will go up to £11,850 from April next year, a £350 increase from the current level. The rise will help Philip Hammond meet the Conservative election pledge to raise the allowance to £12,500 by 2020. In practice, it turns into a £70 saving for a basic rate taxpayer, as it means that £350 more of their income is not liable to 20% income tax.

In his speech, Hammond described the rise in the personal allowance as “making progress towards our manifesto commitments. The typical basic rate taxpayer will be £1,075 a year better off compared to 2010.”

But the Low Incomes Tax Reform Group said that universal credit recipients would barely notice the benefit. “For many, this is a welcome announcement as it will mean they have more cash in their pockets, however it does little to help those on the lowest incomes.”   It said that under the tax credits system, claimants would see the full benefit of the increase in the personal allowance. “However, those with incomes above £11,500 who are receiving universal credit will most likely see a reduction in their benefit. Instead of gaining £70 a year from the increased personal allowance, they will only gain overall by £25.90 as their universal credit will be reduced by £44.10. In other words, they only gain 37% of the benefit of any increase in the personal allowance.”  Higher rate taxpayers will benefit from a £1,350 rise in the point at which 40% tax begins, with the threshold moving up from £45,000 to £46,350. In practice, this works out as a gain of £270 a year, as £1,350 more of someone’s earnings are taxed at 20% rather than 40%. Once added to the £70 from the personal allowance, the total gain is £340 a year.

 

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2 hours ago, kevberlin said:

^^^^^^ As above by lol lol.........”we’re all in this together”

 

Despite the horrendous pressures on the NHS, the pressures of the rise in VAT back in 2011, the wage suppression in the public sector that they are 10-20% worse off than they were in 2010, the Cons absolutely compelled to give Higher rate tax payers four times  the benefit of raising taxation starting points.  

 

The only silver line in this cloud is that Higher tax earners will pay £100 a year more NI ie 4m people will pay at least an additional £400m NI plus a bit  more at the 2% NI rate if they get a pay rise at or above the CPI of 3%.

 

But then more additional money to go to BREXIT than the NHS, very telling.       

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If the NHS England, & Wales, Scotland, Northern Ireland employ more employees rather than just paying 5 to 10 times more for Agency Staff 

the 'Employees' will pay Tax & NI and that will help the Treasury put more into the NHS.

 

Then if the NHS runs more efficiently and gives value for money by employing more there might be less off sick or less time off sick and they can get on with their work paying Tax and NI. 

 

Not such a crazy idea to employ people to work in hospitals and in after care and stop employing people and also paying these same people to be Agency employees or contractors on other work shifts.

Then stop paying off Senior Management even Consultants, retiring them, giving Golden Handshakes etc and then Re-employing them as Private Contractors on more money than they earned as employees.

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9 hours ago, AwaoffSki said:

If the NHS England, & Wales, Scotland, Northern Ireland employ more employees rather than just paying 5 to 10 times more for Agency Staff 

the 'Employees' will pay Tax & NI and that will help the Treasury put more into the NHS.

 

Then if the NHS runs more efficiently and gives value for money by employing more there might be less off sick or less time off sick and they can get on with their work paying Tax and NI. 

 

Not such a crazy idea to employ people to work in hospitals and in after care and stop employing people and also paying these same people to be Agency employees or contractors on other work shifts.

Then stop paying off Senior Management even Consultants, retiring them, giving Golden Handshakes etc and then Re-employing them as Private Contractors on more money than they earned as employees.

 

When the NHS pays no better than a supermarket worker then it is no surprise that the staff consider not staying in the NHS, same for teachers too, when they can get a better deal in a private sector job with a fraction of the stress compared to the life or death scenarios.

 

NHS badly run from the Minister down through to the resource directors/managers.  Also with the BREXIT uncertainty driving away those great mainland European workers who have been filling many of the vacancies the future of the NHS is looking bleak under the Cons.  Opposed as I am to private health care with every fibre of my being it does give some peace of mind and one pays a stack of tax on it to at least top the state coffers up a bit.   

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I'm more interested in what the investment in the so called and massively misunderstood subject of productivity. We need more companies making things. As it happens, the latest data from the automotive council show that the UK auto industry is more efficient than any other EU country, after all, the Nissan plant in Sunderland has been winning accolades for years. The issue is that productivity is measured as gross manufacturing output per head, so if our growth is in financial services, then of course a productivity metric will drop. The oribkem us no one bothers to explain this, partly because our political leaders don't understand the sectors they are responsible for. 

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41 minutes ago, stever750 said:

I'm more interested in what the investment in the so called and massively misunderstood subject of productivity. We need more companies making things. As it happens, the latest data from the automotive council show that the UK auto industry is more efficient than any other EU country, after all, the Nissan plant in Sunderland has been winning accolades for years. The issue is that productivity is measured as gross manufacturing output per head, so if our growth is in financial services, then of course a productivity metric will drop. The oribkem us no one bothers to explain this, partly because our political leaders don't understand the sectors they are responsible for. 

 

Uk Gov offered Nissan the following:-

 

(Number 4 not looking so goods but we will see in next 10 days.)  Others are also a bit wooly IMO.  

 

1. We will provide funding for training

2. We will bring the ‘supply chain’ back to the UK

3. We will be at the leading edge of research and development

4. We will try to achieve tariff free trade

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I'm interested in #2 and #3. I work in the latter so that's easy to figure out how to make an impact, but #2 is a bold statement, and arguably ignorant of how the sector works. None of these guys have ever worked in the auto supply chain, yet appear to making hugely grandiose commitments. The majority of the UK supply base are foreign owned, so why should UK suppliers prevail? Especially as they / we have a track record of  being crap at making stuff. If you don't believe me, watch The Apprentice to understand the UK business mentality 

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1 hour ago, stever750 said:

I'm interested in #2 and #3. I work in the latter so that's easy to figure out how to make an impact, but #2 is a bold statement, and arguably ignorant of how the sector works. None of these guys have ever worked in the auto supply chain, yet appear to making hugely grandiose commitments. The majority of the UK supply base are foreign owned, so why should UK suppliers prevail? Especially as they / we have a track record of  being crap at making stuff. If you don't believe me, watch The Apprentice to understand the UK business mentality 

 

Huge issue with UK politicians not having engineering or science backgrounds. 

 

Difficult to grow the supply chain, Tier 1 and Tier 2 suppliers.  Nissan plant at Washington has long been an example but it will need a lot of help if it has a 10% disadvantage on customs tariffs to it main market.

 

Visiting a Tier 1 supplier on Monday to talk BREXIT.  

 

Great visit to Jaguar Castle Bromwich last week, in the tour of the F Type production line they gave a shout out to DHL for their supply chain efficiency, German of course, and we had a speech by DPD, who are owned by La Poste of France !

 

Don't worry as we have James Dyson who is going to do something in the automotive front.  Have not heard anything recently of the Aston Martin plant at St Athans in Wales.   Aston Martin came up in the F1 chat today and we have McLaren as well making cars, just need to keep Honda, Nissan and Toyota as well as the high end companies we have in the UK.    

 

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In all of your tours and meetings, please reinforce the message that the fundamentals of manufacturing things,  is to know the variation in your part, and the variation in your process. Without that secure knowledge there can be no progress. The key point being, can you really trust  the data, and make instant decisions upon it. 

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6 hours ago, stever750 said:

In all of your tours and meetings, please reinforce the message that the fundamentals of manufacturing things,  is to know the variation in your part, and the variation in your process. Without that secure knowledge there can be no progress. The key point being, can you really trust  the data, and make instant decisions upon it. 

 

These people, like ourselves, are multi-billion pound companies that are hard to teach anything about their core competencies ie making cars, or aircraft or many of the other complex items they are involved in manufacturing.

 

We support them by getting the components they want from all over the world and the finished products back out to their customers in a economic and timely manner.  Challenges are eco-political changes, like changes in their core costs, usually Euros for automotive, the some substantial GBP costs for UK manufacturing, USDs with aerospace industry, and transport costs mainly in USDs.  Coping with left field events, like the volcanic cloud from Iceland which made Northern Europe a no fly zone meant rapid adaption to multi-modal modes to get consignments to their required place for Just-in-Time manufacturing.  Make the International logistics industry interesting.  Just yesterday we had the UK Customs computer system drop out for an hour or so and then Glasgow airport shut for an incident on the airport.

 

HMRC kindly paid for me to so a degree with the OU and doing a mix and match with System Failures, Asian Pacific Politics and Economics, computing etc and my team do courses like Six Sigma and the like but there is always new "variables" to factor as technology changes and therefore our metrics and actions must adapt accordingly to work optimally.     

 

UK government is shockingly bad at preempting change.  I would be announcing that VAT is going down from the hiked 20% to 15% ASAP and then below that post BREXIT when we are allowed to go below the EU minimum level to counteract the effects of the weaker UK currency due to the BREXIT vote and actual BREXIT when it occurs.    

 

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