Another budget one. Sorry.

[photodiva]

I keep seeing posts about how this budget will be so bad for us all, am I the only one who won't be (personally) directly affected? Or at least, in a negative way?

I get the issues around businesses and NI but I am a civil servant.

I will get a pay rise! Yep, you read that right. I earn NMW so my wages will go up.

And I don't have a 'gold plated ' pension.

I totally get there will be a lot affected but I can't be the only one who benefits can I?

No it literally doesn't as shown in the OBR own figures:

Link? This is not the same document I was referring to.....

@hydriotaphia but yes you are correct, I'm fuming with Labour.
The only country in Europe to tax any form of education. It is purely a revenge tax and Labour have ignored guidance from: teaching + Headteachers unions, accountancy firms, the update from IFS, SEN charities etc etc who all wanted a pause/end to the policy.
It doesn't make fiscal sense and is downright immoral if you start from the basis that any form of education is good.
All dressed up in lies, obfuscation and shockingly divisive language and petty tweets from Phillipson.

Source at bottom clearly says HM Treasury, OBR

Yes on its own the snippet you posted doesn't tell me much, so can't you just post the entire thing?

If taxes rise, it will affect everyone in the country.
The rich paying more school fees through vat, will have less disposable income to maybe, pay for a cleaner (as an example), or they will move their child to a state school (which will affect those in the schools).
This is just a simplistic affect (I do not have any DC at private schools)
In the same way, if Busniess have to pay more in NI, and NMW, they will cut costs elsewhere, by cutting staff, no planned pay increases, higher prices for services or goods.
This will cause inflation to rise, etc

It's the indirect part that spirals though.

I have an accountancy practice. My wages costs are going to go up by £10,000 a year due to the NI changes. If I want to give my staff the same pay rise I would otherwise, that's going to be even more.

One of my clients runs a motor repair garage. If I put their fees up to cover my staff wages, my client is going to have to put up their fees to cover their staff wage increase AND the cost of my price increase.

They, therefore, will want to charge their customers more. They do a lot of servicing, so that's a direct increase in cost to people getting their car serviced by them. They also do a lot of repair work for insurers, so they'll start charging the insurer more.

If the insurer is paying the garage more, they'll want to increase the cost of motorist's premiums...

And so it goes on.

And that's just the impact of the NI increase. The IHT rule change for farmers will mean some farmers might now just pack it in and sell up. The number of farms will reduce, meaning less produce and more imports, putting up the cost of living even more.

So, while on the face of it, it doesn't seem to affect most people directly, the impact is going to be wide reaching and for a long time.

I do have a pension, because it is a legal requirement.
I have never agreed to have a damn private pension. It was forced on me.

Am also baffled by people who have never owned a business saying how easy it is and how “good they’ve had it”. If it’s so easy and great, why don’t you risk everything you’ve got and set up a business? Since you know it’s such an easy life, I can’t see why you wouldn’t.

So rich people having less money is definitely bad? But poor people having more money is also definitely bad? What is fundamentally different about the rich and poor people in your opinion? Can you explain?

If you think the benefits and wages afforded to MW employees are so good that you object to them being improved then why don't you give up your business and go and get a job?

This is what bothers me most - that it’s entirely comes from being vindictive and spiteful and because people are spending thousands, the expectation is that they can afford it and will suck it up. Why not the private sector as a whole? Private healthcare has same inequalities (if not worse)? Why do those selling vapes get notice and time to adjust for the upcoming tax but education is instantly imposed with no notice? Why do other businesses get rates relief continued and just schools targeted?

In the long run, we will benefit from this policy. We went private for wraparound at primary and state secondary was always an option. We moved in catchment for a fantastic part- selective comprehensive where children from private schools took up the majority of selective places for current y7 intake and no doubt will do for the foreseeable future so my DC will have peers coming to the same school. Just for comparison, when DC1 started reception, there would be 1-2 y6 children going into the state sector for secondary. 50% of the y6 that left in 2024 and 80% of current y6 plan to move into state (pending places but scores indicate majority have a place and a few moved house for catchment).

Working FT for primary years allowed me to get to where I am in my career and I am delighted to step back a bit in a couple of years when we are not paying fees, value of our property is only going to increase with this. Despite selfishly benefitting, I still can’t believe they can get away with implementing something so spiteful for no real reason - financial gain will be wiped out within next few years

@hamsterchump
"So rich people having less money is definitely bad? But poor people having more money is also definitely bad? What is fundamentally different about the rich and poor people in your opinion? Can you explain?"

I did not say whether or what was good or bad.
And first you have to define who is 'rich' and who is 'poor', or what we mean by those terms. MAny people think they are poor, but by many standards they would be rich.
What I said was that higher taxes affects everyone, even if not directly taxed, as it feeds through to higher prices.
In all budgets some people will be affected more than others, but for someone to say it did not affect them at all, shows ignorance.
Some people are rich enough that many things will have little affect, but it will have some affect.
Bus fares going up is likely to have a negative affect on many people, but this is likely to be poorer people as I am making a massive assumption that rich people do not use buses, or maybe only infrequently.

@hamsterchump No idea how you made that assumption from what I said? I certainly do not think that. We don’t pay anyone MW or LW or anywhere near it, including trainees, and never have, we have always paid more, as well as offering enhanced packages including additional holidays, bonuses, and enhanced maternity/paternity leave. Hard as it is to believe, some business owners do care about their staff. I have however also been an employee and an employer and owning a business certainly isn’t “easy” and only people who had never tried it would assume it was.

I was responding to your strawman with another strawman.

No one has said running a business is "easy". They have said that running a business comes with increased risk, which most sensible business owners realise and balance against the far increased rewards they expect to receive in comparison with being employed.

So then their bleating on and complaining about any small increase in costs and thinly veiled gleeful threats about how they'll manage to take it out on their employees anyway (of course profits must always go up) ring quite hollow and disgusting frankly and don't attract much charity from their low paid, exploited employees I'm afraid. Glad to hear you're a good employer.

I haven't said that I'm in favour of adding VAT to private school fees, I'm not that fussed about it either way tbh. The main thing that annoys me about it is the amount of column inches and air time it has taken up which could have been used discussing how to improve the dire condition of state education.

Given that I have spent quite a lot of time over the past few years trying to discuss the dire condition of state education I can't say I particularly blame any parents who have opted out of it for their children. I do object to people coming on MN and saying 'hahah, I'm going to show Keir Starmer, I'm going to take my kid out of their private school and claim their free state education instead of paying extra VAT, that will show him' as if the two things are equal and it is no loss to them to do so. If that were true, what were they paying for?

Private education certainly adds value to the individual receiving it. Whether that adds value to society depends on whether they go on to do something useful like be a teacher, or something more self-serving like hedge fund manager.

hahah, I'm going to show Keir Starmer, I'm going to take my kid out of their private school and claim their free state education instead of paying extra VAT, that will show him' as if the two things are equal and it is no loss to them to do so. If that were true, what were they paying for?

You seem to be misunderstanding what they are saying. As you are fully aware, the overwhelming majority of parents paying for private education are earning over £100k and paying the very top rates of tax then not using the state education the taxes pay for. They are then paying full fees from their net income which labour now want to add 20% on top because apparently the government 'subsidise' the private schools (yet have never described what money they give to provide this subsidy). There are excellent state schools, usually in wealthier areas, teacher retention is relatively high, good discipline and great results. Those of us who have been working countless hours and paying crazy taxes have hit the tipping point and decided the private education is not worth it and will make moves to get into these schools. We were paying for the difference of private vs current local school which was significant as far as outcomes go. Difference between private and top state schools is not so significant for the majority

FYI there is no hahah to it. The only people being spiteful here are the government

Private school aside, this budget is going to have long term consequences that do anything but grow the economy

The analysts and number crunchers say that it might lead to rising inflation, it might lead to more unemployment, it might lead to low growth, and it might lead to higher interest rates, with mortgages and debt. But, it will take a while before the markets etc react.🤷‍♀️

Great post, you really are a baller 🙌🏽

Another great post.

I've seen posters absolutely crowing about how they will be costing the state by taking their kid out of private school and putting them in a state school. Perhaps you haven't.

They also all seem to live in the catchment of a top grammar school where they will be definitely taking the place of a disadvantaged pupil despite there only being 163 grammar schools in England. And those schools will be basically identical to the private school, despite the thousands of pounds difference in funding.

I have to say, I'm rather sceptical.

Frankly to everyone criticising Labour and the budget what is your alternative?

We have to accept that we committed a massive act of self-harm with Brexit and then with 14 years of useless Tory government spending more than they could afford and letting the health service, schools, local council services and social care fall apart and supporting the wealthy only.

Do people really think that there ever was the possibility of a budget that woulnd't affect anyone's pockets in these circumstances?

Broadly it is a balanced budget, although I want them to go after the super rich who use clever accounting to avoid paying their fair share of tax and curb utility companies current profiteering.

The ISC have just announced their legal challenge to VAT on fees. Lead by Lord Pannick whose advice Labour had previously accepted that taxing education was against HR law. Interesting.
This is now the 4th legal challenge to the policy

Public sector pensions typically do not create a pension pot that can be passed on to heirs. Instead, they offer a pension that ends with the pensioner's death. If you are married, your spouse may receive 50% of your pension until their own passing, but this does not extend beyond them.
I knew of someone who dedicated 40 years to their career, only to pass away in the first week of his retirement. Tragically, his pension benefits ended with him.
In cases like these, having a private pension pot would have allowed him to leave a lasting financial legacy for his daughter and future grandchild.

Farmers will need to get advice but there are opportunities to reduce or avoid inheritance tax (IHT) on their estates.
For example, transferring assets to children or other beneficiaries during your lifetime can reduce the size of the estate subject to IHT. Transfers made at least seven years before death may fall outside the taxable estate, with taper relief potentially applying to transfers made within that period.
Also by transferring farm assets into a limited company, farmers can pass on shares in the business rather than individual assets. This structure can also provide relief through Business Property Relief (BPR), which offers up to 100% IHT relief on qualifying business assets. Plus, a limited company allows for easier and more flexible succession planning.

It will need careful planning but can be avoided in many cases.