to ask how you will be affected by the budget announcements?

[manicinsomniac]

Sorry if there's another thread about this, I can only see lots of speculative ones.

Now that it's announced ... I admit I'm struggling to get my head around it. I don't think it's as bad as I thought? I don't think it can be that good though? I don't think there's a single thing in it that affects me. I'm not sure about any of that though because I find it all quite confusing!

So, ordinary people from ordinary families/households - how are you going to be affected, if at all?

Noticeably better off. Higher rate tax payer so both increase in personal allowance and 40p bracket help. Stand to inherit, hopefully no time soon. No tax credits.

I imagine this must be scary for many

£2400 worse off for us. Married couple, 3 children, I work ft in the NHS as a nurse and OH is a SAHD while also attempting to set up his own business from home, although not making any money yet.

£200 per month for us means the difference in making ends meet and not. I'm not sure what we're going to do.

I'm probably about to retire - my employer has offered early retirement as a cost cutting exercise but if I wasn't retiring then I'd be a few hundred pounds better off due to the extra tax allowance - I don't get any benefits or tax credits. it seems that anyone who gets any kind of benefit is going to lose - which fits the Tory philosophy

I don't understand the calculator either. According to that I lose ALL my tax credits (over £2000). I'm a lone parent working part time. But I just can't see where exactly that is spelled out in the budget itself.

Prepper with respect I never said dividend income (which is investment income) isn't income. I said it wasn't earnings. Which it isn't. A lot of people dodge paying tax by taking income through dividends instead of salary. Or at least, they used to. The fact that those taking extremely high incomes through dividends can't dodge tax now is a good thing and complaining about it when there are vulnerable people who are now worried about surviving is in pretty poor taste.

I shall lose the "with respect" in my response uhtred. This thread was about how people are affected and this is how I am affected. I am perfectly entitled to post and I said all along I appreciate I am a high earner and I wasn't asking for sympathy.

I am a business owner. I take money form my business via dividends. This isn't wrong either legally or morally/ethically and it certainly isn't tax dodging.

I pay just as much tax (now it will be more) than those taking their money through PAYE

If I earn £100 and am a higher rate tax payer through PAYE I pay 40 percent tax and so I end up with £60

If I earn £100 as a business owner and sole shareholder I pay 20 percent corporation tax. I have £80 left. I then pay 25 percent tax on the dividend with the dividend tax credit (£20) and so I am left with £60. Exactly the same income tax as through PAYE.

With the reforms I will pay much higher dividend tax on my already taxed business income (32.5 percent as a higher rate tax payer or 38.1 percent as a top rate tax payer). I will be significantly worse off.

So please make sure you actually know what you are talking about before accusing people of being tax dodgers

Duggee - this details the cuts - www.gov.uk/government/uploads/system/uploads/attachment_data/file/443285/HMRC_Summer_Budget_Overview_Version_4_0.pdf

The cuts are due to the increase in the taper rate and the decrease in the income threshold.

If dividend income isn't income then do tax credits not treat it as such, or does it not have to be declared to them?

My main worry is about how the budget will affect people claiming tax credits. I fall into the 'takes income as dividends' group so will be maybe 10k worse off. I can't be arsed to run the numbers and will wait for my accountant to tell me what the damage is and what I need to do to mitigate. But the thing is,I probably will be able to mitigate, unlike people relying on tax credits, housing benefit etc, who will just get legged over.

Bulldog- I get that but that's a massive difference. What's the threshold? How much in dividends do you need to be paying yourself to be in the 38% and how much to be in the 7.5%? Feeling scared now as this could have massive implications for us.

Ah, x-post, prepper, from what you're saying, you don't get tax credits. I was just wondering how that worked.

I think dividend income is taxable but you are allowed 5k untaxed now, or so I thought.
You still have to declare it, according to our accountant anyway.
She only briefly looked at it today though and said it wasn't concrete.
I'm pretty sure tc don't treat it as income but you may need to declare it as other income, then you take £300 off or something, iirc.

38 percent is for a top rate tax payer cleo i.e 150k plus

Apparently we are due to lose all of our tax credits according to that calculator. £240 a month!

I looked at the 2003 rates earlier though and how I understood it is we would lose the each child element (biggest fucking bit) but keep the £545 a year per child basic bit. I don't know if thats right or not now. With 2 children that's still £1090 a year. Still loosing 2/3s which is a joke but to loose the lot will be awful.

Can anyone clarify the 2003 rates? I thought I understood it but after that calculator I just don't know.

Sorry, meant tax credits don't treat it as earnings, but may treat it as other income/ unearned income.

£2.5k worse off. We're all in it together though, right?!?

www.revenuebenefits.org.uk/pdf/Tax%20Credit%20Annual%20Rates%20-%20April%2014.pdf

That pdf shows the rates from 2003/4 to now.

I wonder how many lower income people are regretting voting Tory.

£93.27 better off.

Looks like we'll be about £250 better off a year, which I think comes from the tax allowance.

So sorry for those who will be worse off and are going to struggle

Just caught up with the thread, some awful things going on, really sorry to those who will struggle.

Anyone else made a connection between the amount of single parents who will be miles worse off in the cuts and the tory way of thinking towards marriage? They go on about family values and tax breaks for married couples- I think they want people to get married and stay married.

Thanks morethan

Egos I am just number crunching. It will depend on your income of course but for me I think I might be better of taking salary as an employee than taking the dividends since that will reduce the corporation tax bill.

Crapbag

The 545 is a one off family element, not per child like the child element.

The 2003 rates dont really matter though. The cut comes from reducing the income threshold from £6240 to £3850. So anything you earn above £3850 will now be tapered off at a rate of 48%. That means that for every pound you earn you lose 48p in tax credits.

Did lower income people vote Tory?
Why, the hell would they do that?
Tories have historically taken off the poor and given to the rich.
They have never liked single parents and the disabled, they support people who are able to look after themselves.
i'm only 49, never studied politics and know this much.