October budget going to be painful

[increasinglyconcerned]

Here we go..... I knew it. Labour were promising not to hike our taxes in the election campaign and here we are.... apparently they discovered £22 billion black hole in his first weeks in the role and it's not his fault.

Let me guess, those of us who earn six figures and already pay 45% will pay EVEN more and take home even less. It's the hard workers who will take the brunt. What's the point in working anymore!

I earn a little over £120k and I'm taxed the same as those earrings £500k.

Before people jump in saying they don't feel sorry for me, I work full time to support my family, as of January I will have 2 DCs in nursery, plus my mortgage and get ZERO free hours childcare, whilst they keep promising free childcare but I just pay more for everyone else to benefit.

I cannot afford to pay more taxes to fix this country and especially when so many people are getting a free ride and not paying their way, ranging from millionaires with tax havens to those claiming benefits dishonestly.

If you voted Labour (which I did), then this should be no real surprise: Labour is all about using taxes to increase social benefit. Taxes were always going to go up under a Labour government, but I believe we wanted change, we recognised that things are truly hard for the poorest in our society, and we wanted that to be better. It will take time and money to get there.

Time to buckle in, accept what is ahead, and make the best of it - what other choice is there? We can moan, regret, point out alternative choices we could have made years ago, but it serves no purpose. We are where we are, we have been warned the budget is going to be tough (possibly so that when they drop in a couple of happier things, we'll feel a bit of relief), and now, we wait.

There are so many ways governments could get extra money.

They could close the legal loopholes so many VERY rich people and large companies use for a start.

They could come down hard and actually chase down companies and people who commit tax fraud.

They could look at themselves and all the little perks they get.

They could look at the house of lords where they get hundreds a day for just walking through the doors and back out again.

They could address the massive wastage in the NHS.

You could go on and on and on. There are so many ways governments can save money and raise money.

It's just easier to do nothing to stop money being siphoned off at the top and instead go after the easy targets.

And no, I'm not a high earner. I bet I don't bring home in a year what the OP grosses in a month but that doesn't mean I think it's fair that governments take the easy way out instead of making actual changes that their mates won't like.

@CrimsonShades I guess you aren't a high earner yourself? Your view of the world is very simplistic - one doesn't need to move to lower paid job to move to lower tax band. It's sufficient to reduce hours.

Most of high earners (of course not all, please don't try to twist my words) are in professional jobs and in many cases it's possible/rather easy to go part time.

Doctors who reduced their hours because of pension changes didn't move to Tesco, they chose to work only a few days a week.

This budget will indeed be very painful for mid-high earners, apart from "Apprentices, teachers, nurses, small business owners, firefighters, those serving our community and our country every day." as Starmer said.

The problem is that those who fund teachers, nurses and firefighters salaries will go on quiet strike and then reality will become very painful.

You’d think a chancellor who claims to be targeting growth would understand incentives better though. Or was that simply lip service? As the first thing they did was create a funding crisis through public sector pay settlements. They knew the spending plans had factored in 2 percent rises which was hardly likely to be accepted.

Increasinglyconcerned
I may as well save the £4k a month/£48k a year on nursery and claim benefits. After all I won't end up with much less.

You might be on a good wage but you clearly have no brain if you think this is true!

CGT
IHT
Extend NIC to all income sources and gains
Smooth all the tax/benefit cliff edges
Remove the stupidly high marginal tax rates at certain income levels
Tackle tax evasion and benefit fraud in the black economy
So many ways of raising tax revenue without hammering the "working middle"!

CGT and IHT already seem to be on the table
I agree about NIC and about smoothing all the tax cliff edges and weird marginal rates, not to give greater tax relief but because it's all a bit bonkers.
Also agree re tax evasion. Not convinced benefit fraud does actually cost us that much, but equally it's important it is seen as fair so needs tackling.

I’m deadly serious when I say that if you are a skilled person, with young DC/ no kids, you should seriously think about leaving the UK.

The UK has been on a downward slide for 3 decades now, and it’s getting worse. Labour’s ideology will make it worse, not better.

I’ve lived in 4 other countries, a total of 20 years outside the UK. Some places I paid more tax, some less. Every country had a better way of life than here.

I came back to give my DC roots, however I’m now encouraging them to leave after Uni. As soon as my youngest has finished his education, DH and I are leaving.

The taxes, energy costs, housing costs, other bills, lack of accessibility to NHS and dental, the 3rd world infrastructure, the poor education our DC receive, the crime, and in particular the epidemic violence against women and children, the jack of freedom of speech and the general stress and anger of the average person is now too much.

I’ve held out for it to change, but it’s not and now it’s getting worse.

Honestly, look into other countries you can live and work and give it a go.

Get a grip.

There's people in this country who are really struggling to pay for essentials.

It's the hard workers who will take the brunt. What's the point in working anymore!

Just because you earn more doesn't mean you work any harder for it than anyone else.

You’ll be paying 37% tax over all and someone earning national minimum wage will be paying 13%

you have the opportunity to put 26k into your pension and receive child care hours etc

thats more into your pension than someone earning NMW earns to live upon.

it would also take £15000 off your tax bill

you have the choice to manage your finances in that way if you wish

and mean you’d pay 24% tax over all

It's the hard workers who will take the brunt.

Ah, didn’t realise we had to earn 6 figures to qualify as a hard worker. Us lazy fuckers who work full time for a pittance should work harder apparently.

This.

A lot of the lowest-paying jobs are some of the most exhausting, with the longest hours.

There won’t be increases in Income Tax, Employee NI or VAT.
Where people’s take home pay might go down is pension relief reductions. That’s what would harm me personally, but all it will probably mean is that the pay rise I get next month will disappear again the month after leaving me the same as I am this month. Annoying but not a disaster, and fair enough if it pays for public services.

What I would like to see is big increases in CGT and IHT. At the moment people who actually work for their money pay more tax on it than people who inherit their money or get it from capital gains and investments. That has never sat well with me (and I say that as someone due a fairly big inheritance when my parents die. I can’t believe how little tax I will pay on it and would gladly pay many times more).

Austerity measures were taken by a coalition government, Tories and Lib Dems, following the banking crisis in 2008. This was not a UK only crisis.

I managed to feed, clothe and house myself and my child through the first five years of her life on 13k (or less some years), with a few things I could do here and there to top up my income by sporadic amounts £100, as nursery hours were very very limited. With no partner or family to watch my child ever so I could make some extra money in the evenings.

I think you'll be okay.

I do think they need to sort out the tax boundaries though because they’ve in effect been lowered over the years. And make CB thresholds per household not per person - so unfair on single parents.

They need to reintroduce that higher tax band for the very highest earners to balance this out. And then their planned increased to things like capital gains, corporation taxes, inheritance tax etc

The cliff edge of £100k can be awful. But not as bad as the cliff edge at £7852 if you are working 35 hours a week as a carer on top of your paid job and claiming carer's allowance. Earning an extra £1 in one week loses you £81.90

Or the cliff edge if a small occupational pension takes you over the pension credit limit and you lose all the benefits to which pension credit is a gateway,

Ideally there would be no cliff edges. But on £100,000 you won't become destitute, and the likelihood is that in a very few years time you will have climbed the ladder far enough to have recovered all the ground you have lost.

85% of tax payers only pay 20%. That's far too low.

@Xmasbabyxmas

It's the people on PAYE who get squeezed time and time again as it's easy pickings.

Nail on the head with "easy pickings".

PAYE is a simple and cheap tax collection system, The treasury love it because it's administered and paid for by the employers. Just like VAT is administered and paid for by businesses. Little scope for expensive protracted legal disputes when dealing with tax on wages!

Raising taxes in other ways is harder work for the Treasury and HMRC, the latter being hopelessly incompetent. HMRC are incapable of anything remotely difficult like IHT and CGT which is why there is so much tax evasion in these areas

RR and KS need to give HMRC a kick up the arse, fund them properly, and start tacking tax evasion in the areas of CGT, IHT, VAT and income tax in the black economy, benefit fraud in the black economy, etc.

30-40 years ago when I started as an accountant, the local tax offices were hot on tax investigations of local businesses, self employed etc. They did random checks on VAT returns, PAYE, etc. Virtually every one of our small business clients would have some kind of tax investigation/visit every few years. The local inspectors would use local knowledge and keep their eyes open, make notes of new business start ups, new tradesmens vans, etc., and then go back to the office to check the files that they were registered, and look at tax returns etc. All that's gone with the amalgamations of tax departments and then the closure of local tax offices which resulted in huge numbers of tax inspectors made redundant! We need to get back to that. Self employed and small business owners are being let free to run wild in the black economy and basically chose whether to declare income or not. Crazy!

He has apparently said they won't raise income tax and national insurance. We'll see.

'hard working families' don't seem to ever include higher earners who are quite literally the golden goose.

The £100k cliff edge threshold was bought in years ago and hasn't been increased since, whereas the minimum wage has gone up a lot. £100k isn:t why it used to be.

I am happy to be here atm but I feel the same as you about where this is heading, it prompted me to sort out the viable option tg for the dc

We're thinking about the same thing.

Perhaps, but there is a risk that you can pump literally millions into a single child's education and mental health support and they still will realistically only ever be financial burden on the state.

I know that sounds callous but it's easy to see how spending millions on individuals would be enormously expensive and literally bankrupt us given the ever increasing numbers of children needing intensive support. I don't know what the answer is but sensible discussions and realistic need to be had in areas such as these. Not because nobody cares or wants the best for these children, but because pretending that funding everything to an optimal level for everyone is possible just does a disservice to everyone. If the general population isn't willing to carry the financial burden through extremely high levels of taxation then this needs to be factored into plans.

No increases in VAT, income tax or employee NICs mean:

Realignment of CGT rates with income tax rates. Current CGT rates are 10/20%. Not long ago they were 18/28%.

Dropping the VAT registration threshold to £10k would stop a lot of avoidance (contractors not taking work that brings them above the threshold) and evasion (cash sales to keep you just under the limit)

Reassessment of council tax possibly. It doesn’t work just now.

The pensions changes that have already been discussed here, and yes, they need to ensure DB contributions are hit as badly as DC.

Scrapping stamp duty and income tax thresholds are important moves for growth too.

And Miliband said Labour would do the same if they were elected!