It's a token amount really, but at least it's not rising like non draft alcohol Why would you give tax breaks to small companies that distribute profits to shareholders rather than back into their business and employing more people? If you introduce a benefit to being a small employer you're actively discouraging companies from employing more people. The idea that all small companies will invest savings and grow and all big companies are all hugely profitable and don't want to grow anymore doesn't have any basis in facts. Small businesses have shareholders too, often those shareholders are well off private individuals. Whereas large companies that are on the stock market are owned by mostly pension funds, you, me and old Doris.
It's another obstacle to someone buying and providing a rental property and makes it harder to break even. In reality it'll just help increase rent prices as there's less availability on the rental market, which means that government assistance will have to increase to pay for that rent. There is the argument that it will free up homes for buyers and lower the prices but then againwith increases t other taxation I think you'll see more homes left empty. Stamp duty on first homes stops people trading up and squeezes availability at the lower end as houses get extended instead of passed down the chain. When there's a housing crisis you really need the government to make it cheaper and easier to operate across the board, you don't make it more expensive or difficult to buy, sell, rent or build. You also don't make it easier for people to borrow money as when there's a shortage of stock, it just puts prices up further.
Thieves with a disastrous socialist budget. £40bn in tax rises, the highest in history!! But it's ok, I can get a pint for a penny less. C**t.
Well, maybe; but shortfalls caused by that could be at least partially countered by new house builds. WAS seemed not to be talking about renters but about people wanting to trade up from first homes.
As a percentage of GDP it is not the largest. That was Norman Lamont (Tory) in 1993. It's only marginally more than Rishi Sunak's tax rises in spring 2021, which when added to his October 2021 budget six months later, makes him the taxiest of taxing chancellors in living memory but, again, don't let the colour of the parties affect your view! I'm absolutely sure you were just as outraged by that. Reeves' budget is not perfect but it targets many of the right things, unless you think that the best off should just be allowed to keep more of their money than the less well off. And at least it is balanced with some spending pledges on things that might actually benefit the majority. It's always funny around Budget time how the wealthier you are the more you need to be incentivised to work, save, invest etc with favourable taxes whereas the poor can be just hit with a stick until they dance to the right tune. This redresses that balances in some ways. It's not perfect but unless you think the past 14 years can just be ignored and not paid for, or you think the country is functioning brilliantly and doesn't need additional funding it was probably the best outcome for people who work most and/or have the least. The one thing most people have not commented on online is the rise in CGT, which increases the tax on things like dividend payments from 10% to 18%. Not great for a heck of a lot of people but probably the right thing to do.
Not quite the highest, but still high. IIRC, the highest was by a Tory chancellor? EDIT: see EtG’s post above.
Unless I missed something (which is very possible as my attention did begin to wander after a few minutes) that didn't seem too disastrous as far as the Lloyd family finances go. The fact is that nothing works in this country and while I'm not convinced that chucking money at public services will make a noticeable difference I am happy for Sir Keir and his band of brigands to take a few bob off us and give it a go
They have completely shafted family run farms. In my neck of the woods farmers are barely holding on as is, this will run a lot of them out of business as the older generation dies. Also shafted small businesses with the rise in NI. Overall I am not a fan.
Poor farmers who are sitting on multi million pounds worth of land will now be subject to some inheritance tax at a massively reduced rate
At my age the introduction of adding pensions to inheritance tax is the biggest personal impact, but I'll have to look at the detail of what is included. For my kids it's about job security. 2 work for small independent companies who will be heavily impacted, especially my son's who has just 7 people and only just broke even last year, after the pandemic.
So if a farm is valued at over £1m, inheritance will be taxed at 20% on everything over that value. This value includes farm buildings, land, animals and vehicles. Why is this an issue, because clearly as LMWFC points out all farmers are absolutely minted? Well the average price for farming land currently sits at £8200 per acre, meaning 122 acres of land will breach the £1m value. Now obviously this doesn’t include the other assets on the farm such as machinery, livestock and buildings etc. So all in your £1m inheritance tax buffer disappears very quickly. Now still, that’s all just money in the bank right? LM said all farmers are minted after all. Well that money doesn’t exist. Farmers can’t sell the land if they wish to carry on farming. They can’t sell the farmhouse, and they can’t sell the machinery. In fact they have to invest heavily to maintain all three aspects. In addition most farmers in the UK, whether they are arable or livestock are barely making ends meet. Many struggle to break even let alone make a profit. I have multiple clients, who literally just about get by. So taking all this into account. What happens when a farmer dies and wants to pass on his farm to his son. Let’s say the farm is worth £2m, now the son has to find the an additional £100000 to pay the tax man. How does he do this? He sells some land, but by selling land what happens? His turnover goes down. Now that farmer who was barely breaking even before, is now operating at a loss. What happens? To stay afloat he sells more land and on and on it goes until the farm is too small to operate and it goes bust. No need to worry though, the mega farms will buy out the poor independent farmers. These are owned by big businesses or corporations. They will keep churning out your cheap milk, meat and crops for your supermarkets to sell, because at the end of the day who really cares about animal welfare if not the corpos. Sorry this turned into a rant, but I’m fed up of seeing farmers beaten down. They are decent, hard working folk who deserve to earn a damn sight more than they do.
If I have a house worth £2m and want to pass it down to my children, they would have to pay inheritance tax on it, if they didn't have the cash they would need to sell it. If farmers have multi million pounds worth of arrests that aren't making money why do they carry on farming? Because they want to? Should you get an complete exemption from inheritance tax (beyond this incoming) because you want a certain lifestyle? I'm sure there's lots of people who want to be a farmer, but they don't have millions. There's lots of people who would like to live in a mansion or be a business owner but they have to pay inheritance tax on the mansion or business. Millionaire farm owners are wealthy people. Whether they make lots of profit or not is not the fault of everyone else, and shouldn't be an exemption. And why are all these mega farms buying up small farmers if farming is so unprofitable? Surely there can't be any investment in it?
IHT is a particularly nasty tax. It's assessed on (in part) perceived value on assets that have been purchased from taxed income which at the time accrued purchase tax and takes no account of the liquidity or ability to pay. To top it off the super rich can afford to avoid it anyway. It hits those that saved to provide for their future, but are sadly cut down early without out warning.
I think the difference is would your children be inheriting a £2m house +business + machinery +everything else thats on a farm. Anyone with enough cash can buy a £2m house, the market to buy a farm is a lot smaller and the negotiating power of the seller is a lot less. Farmers aren't like the rest of us, they don't get a monthly wage packet, their money comes in in clumps sometimes every 3 or 4 months when they then have to live and budget off that for periods of time. I would say that farmers aren't cash rich or cash wealthy people. Asset rich yes, but those assets are the land that in effect their shop window. long long term we know that we need to build more homes. The more land we give up because farmers need to sell, the less land there is to farm. Which means there is more need to import. We should have learned from the situation in Ukraine the need for internal food security. It is though another traditional category that don't vote Labour. Pensioners, Business owners, farmers....... you can see a pattern here.
How does it hit them though? They're dead. It's arguably a tax on a windfall. And those are usually taxed and often quite heavily. There are already generous exempted amounts, although it would be good to get to a point where those could go up for the first time in 20 years (by the time we get to 2030 at least) to reflect the original intent better.
I assumed the Farm thing was to close a loophole that was no doubt getting exploited by more wealthy people? I’ve no idea on this, I just guessed someone must’ve been gaming it. Also the penny on the pint thing is a bit of a red herring, what people completely ignore and miss with these thing is that it hasn’t gone up. The fact it’s ‘only’ gone down by 1p is kind of irrelevant, considering tax can both increase and decrease. The daft thing is people would’ve probably been happier if they’d just frozen it.
I'd love to see the maths on the ratio of non draught beer duty to draught but can't find any statistics. How much would you have to put up the price of a can in order to remove all duty on a pint? I'm sure restaurants without kegs and people who only like bottled variants of beer would complain but would be good for pubs
The thought that 40% of what you worked and saved for (that has already been hit up for tax) going to the government rather than where you wish it to go is personal. Don't forget it's a valuation of assets that are not neccesarilly liquid. Having to sell stuff that your recently deceased parent gifted you to pay a tax bill is particularly unpleasant. If it's liquid assets, then possibly tax has already been paid on the earnings, the purchase from the earnings, the profit if any and now the government take more just because the person has died suddenly or wasn't rich or clever enough to avoid it? IHT is not fair in my opinion.
Yep it's a case of rich people gaming the system to avoid IHT. Its now been spoilt for the people that did actually need it. Passed on family farms that just about break even but have a perceived large value will now have to sell off some of their land, which will make it harder for them to break even the next year. The value of agricultural land will possibly drop which might however help out those actually in need of the tax break.
The smaller market doesn't necessarily mean the seller has less negotiation power. Farmland is probably a lot harder to come across as a buyer too. I don't think "it's more difficult to sell part of my multi million asset than yours" is a fair reason anyone should get any exemption. I see multi millionaire Clarkson, who went to private school and froma well off family who had the right to Paddington bear, is out on force complaining. I can't see any reason why his kids should get his TV and media millions free of inheritance tax just because he used it to buy a farm.
Added to the fact that employer NI rises will likely hit the entertainment industry so prices of beer will likely rise more than this 1p cut.
I think the fact that the likes of Jeremy Clarkson (that well known generational farmer) are complaining confirms that it has caught some that are well able to pay it. Unfortunately I think it will genuinely impact some of the smaller, family run farms, to the benefit of the huge corporate farms that will buy them up when they are forced to sell.
It's not a perceived value though is it. It's actual value. All tax comes from money that's already been taxed. That's the economy. I pay tax on my income and then when I want to pay someone to build my extension, I have to pay tax, the builder has to pay tax. Public services need to be funded and tax is needed from somewhere, why should working people be taxed more so that those who inherit wealth don't have to pay any tax on their windfall they did nothing to earn?
Personally I'm not willing to pay any more income tax just to allow people to inherit their dads multi million farm for sentimental reasons
Agreed it's a tax dodge, unfortuntately you can't punish the dodgers without punishing the people. Scrap IHT and tax on wealth accumulation properly instead rather than wealth itself and the problem goes away.
Conversely why should people who save and die unexpectedly early, be taxed more than people who earn the same but spend it. If you save to support yourself in retirement and need care, you have to pay for it. If you spend have notihng in retirement care is provided for you by the state. Any income generated on the inheritance should be taxable of course. But that's a double whammy against prudent people.
Personally I'm not willing for my savings to be robbed to fund someone elses avacado on toast and i-phone consumption lifestyle. If I'm unfortunate enough to pass away before I've spent what leftover money I have after all the tax I paid during my life then I should have the right to determine who benefits from it.
Again it depends on how you view it. Like UEA said I'm in the camp that dead people don't pay tax. It's a tax on those who inherit wealth they did nothing to earn (with the exception of some hard working beautiful young widows married to wrinkly billionaires and those who dedicated lots of time to gaining favour with their unpleasant rich grandparents - I'm sure they've put in a fair grift)
I agree. But this policy may have unintended consequences that I hope the government have considered. If smaller farms do become unviable then it could impact consumer choice and result in more imported food. This would be terrible for the environment as well as food security. I know the farmers are famous moaners but I did see a claim that £3m worth of land was only producing an income of £23k. The farmers may be asset rich but many do not have a huge, steady or reliable income. I totally support IHT but I don't want small independent farms to disappear because of it. I hope the government monitors the situation and alters the policy should the worst predictions of the farmers turn out to be true.
Really it comes down to everyone's personal philosophy around tax. Given it's only 40% for everything over £325k (or, in most families, £500k-£650k) the vast majority of people aren't affected anyway. It's also relatively easy to avoid and encourages generosity by incentivising gifting money ahead of time.
