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?

£2000 worse off for us. I don't even know how that's possible. We aren't even really scraping by now

I just recalculated on the basis that my husband sacked off his business (which would mean taking a massive loss in start up costs etc.) and instead were to work 3 days a week (to fit around my 4 day full time rota so that we wouldn't incur massive childcare costs) and we'd be even worse off. An extra £600 worse off per year in fact. On top of the £2400 that we are already going to lose.

How does that make any sense whatsoever?

£256 better off which seems wrong to me (we are pretty financially comfortable).

Single mum to two, carer to sn child. No change.

I pleasently surprised

Is EVERYONE losing the family element of £500 (odd) in April 2016 or is that for new claimants only or something else?

For new claimants when their first child is born, from 2017, and new claimants with more than one child.

From the link up thread

^From April 2017, the Family Element in tax credits and the equivalent in
Universal Credit will no longer be awarded when a first child is born. This will also apply for families with children making their first claim to Universal Credit.^

Households who have been in receipt of tax credits or Universal Credit with an interruption of less than 6 months will be protected. Furthermore, children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in tax credits and the equivalent in Universal Credit. In Housing Benefit, the family premium will be removed for new claims and new births from April 2016.

I think this is how the Tax Credit thing works ...

At the moment, for example, if you earn £10 000, for every £1 you earn over £6000 they take an amount off your tax credit award ( 70p? ... so 4000x 70p = £2800 taken off)
From next April, for every £1 you earn over £3000 they will take an amount off your tax credit award (70p? ... so 7000 x 70p = £4900 )

That's where the big reductions are going to come from.
Arseholes

Is it just me or do the torries seem to have it in for single parents ?

With £95bn going on pensions, £12bn from them would have been felt less than taking it from £30bn tax credits.

And now the BBC is footing the bill for the TV licences for over 75s, which means the low paid who are having their tax credits cut and are paying their TV licence are now paying for the pensioners to get them for free.

About £140 a year better off, but we were hammered by the coalition to the tune of about 3K a year.

prepperpig - if there was no tax advantage to paying yourself in dividends, people wouldn't do it.

The saving comes from the lower NI contributions. Also people using that structure commonly take directors' loans, tax free. The loans have to be repaid, but with far greater flexibility than paying income tax. All options that aren't open to sole traders, never mind those on PAYE.

Prepperpig thanks. How did you calculate what your loss/gain would be?

How much in dividends do you need to paying up to for the 7.5% tax?

Guess going to have to wait and see what our accountant says.

Feeling mightily pissed off actually. Dh has built his business up from scratch and it has taken him 20 years to get to the place he is now. He employees people and has the risk and responsibility everyday of owning and running his own business and paying his employees wages. we may be screwed with this budget. After 20 years this is the first time we have had a comfortable and decent income which we know is going to be a set amount every month. Now it's being taken away from us. I thought the Tories wanted to promote businesses, especially small businesses? Where would the economy be without them?

According to calculator , £269 per yr up .. But it doesn't take in to consideration the 30k limit for social housing .. We are by 2k over so we have to find £300 Pcm extra for market rate . So approximately £3300 per year down ... 2 full time working parents .. 2dc's .... £64 per wk approximately Where the fuck is that gonna come from ?

"i think they want people to get married and stay married. hmm"

Yeah ...Thanks tories. I wanted that too. Husband had other ideas.

misstired

Unfortunately you are not imagining it, Tories don't like single parents and anybody else who isn't part of a nuclear family with one bread winner.
They have spouted about working families but they aren't going to support working families at all. The childcare proposals won't benefit anybody, but they have convinced society they will, to attract voters.
If you aren't fit and healthy, they don't believe in supporting you, their belief is "survival of the fittest" and always has been.
I am so sorry for all those affected and wonder why anybody could think having a Tory government was a good idea.

250ish better off apparently.

Dividends are earned income as where on earth else is the money from? It doesn't just spontaneously appear in the company bank account. From reading the doc any tightening up seems to be aimed at higher rate tax payers and the threshold for higher rate tax is going up anyway.

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

This bit is right.

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.

This bit isn't. The dividend tax credit is covered by your corp tax. You end up with £65.

I didn't say there was no advantage at all Mat there is a small NI advantage.

Director's loans have to be paid back. Its just a way of tax planning and so that you don't inadvertently breach the rules on taking dividends whilst not technically in profit.

cleo the full document is on the gov.uk website.

£1,400 worse off according to the calculator, I feel sick, have no idea where we will find the extra money from. Anyone who is disabled or claiming tax credits is going to be worse off.

Why are the poorest having to fund MP pay rises? How do they expect people to manage? You can bet gas, electric, water rates and food will all go up again too.

cleo are you a company director?