The budget..

System

Wow..

Trying not to sound sad here but.. that might be the most exciting budget speech I've heard!

Nice finale - basic rate of tax down to 20%.


It will be interesting to see how he pays for it. Maybe the impact of increasing the small companies corporation tax rate to 22% will cover some of it.

System

Re:The budget..

Good - Basic rate tax cut to 20%
Bad - 10% lower rate cut

This could result in more tax for low earners:
£2,230 at 20% instead of 10% resulting in an extra £223 tax pa.
To save this £223 by the 2% reduction, you have to be earning £11,150 more than the personal allowance.

Then, the higher NI limit is being raised. So, this will result in an extra 10% being payable on this increase. Although I suppose this is countered by a quite nice increase in the lower 20% basic rate thresehold to £43,000.

I also quite liked the increase in the ISA allowances.

System

Re:The budget..

Calm before the storm for small companies I reckon.

Aside from the increase in corporation tax he seemed a little venomous when he talked about small company shareholders that pay themselves dividends rather than salary.

Could we see NI payable on close company dividends?

System

Re:The budget..

GB has always had the close company dividend situation in his sights ready to pounce, though with his planned promotion I doubt it would be in his favour to go and upset the SME sector at this stage in his campaign.

Eventually I feel there'll be some tax dis-advantage brought in to ensure dividends are no longer tax efficient.

System

Re:The budget..

He will, imo, either go for NICs on dividends, or make minimal wage compulsory for directors - either way there will be a massive stampede to disincorporate.

Tax advantages are now fairly minimal unless you make mega profits.

The bit that made me giggle was - capital gains now = £9,200 and double for married couples - er have I missed something £9,200 x 2 = £18,400

Claudia