The NI changes are going to cost my organisation £1000 per employee

[flashbac]

The NI changes are going to cost my organisation on average £1000 per employee, The lowering of the threshold alone is going to cost around £600 extra per employee.

We are heavily regulated with fixed income. We're a not for profit. Our customers expectations are increasing. We are now most likely going to have to somehow reduce our headcount now, and payrises for April are going to be off the table.

Just shaking my head really. Our employees don't deserve this. Hard to see how this isn't a tax on jobs.

The lowering of the threshold also means employers have to pay for more workers, because part time salaries are now dragged into it.

A lot of people reading this won't care. All I can say is this NI increase will also affect you. just think about Local authorities, childcare providers and other services. Do you think it won't affect your Councils services/tax bills, to give one example?

(I'm not a Tory bot btw, before anyone starts accusing me of being one. I voted Remain, don't support the Tories at all, can't stand Boris and his cronies.)

Such farmers will end up selling their farms to developers or huge corporate farms, so one way or another, we'll lose the smaller/independent farmer. In just the same way we've lost smaller/independent shops, restaurants, care homes, nurseries, etc - they're just not viable on a small scale anymore so ripe pickings for hedge funds and billionaires backing chains.

Not many farms will be effected by IHT. Of those that will be, about half didn't do much farming. Rich people buying farmland has been an IHT dodge.

https://www.theguardian.com/uk-news/2024/nov/01/farmers-shocked-budget-inheritance-tax-estates

Very disingenuous post on Moodys

What was actually said...

The increased spending will “mechanically boost growth in the short term, but it’s too early to tell how much this will add to potential output in the long term”

It said more spending on public services should also “create a more business-friendly environment”, saying improvements to the NHS and schools would also benefit firms
But “reaping those potential benefits will also depend on whether the spending is deployed in an effective way”

Moody's added the spending leaves the Government with only a “limited buffer” to absorb further financial shocks while still complying with its fiscal rules

No change in ratings for the UK or hint of any changes, yields falling, FTSE rising as is the £.

But don't let the facts get in the way of slagging off the new Labour Government.

Good luck on winning the next GE, not with either of the two clowns you've got in at the moment.

And farmers who do own assets that would take them into IHT liabilities most likely will have accountants to assist with IHT planning. A life assurance policy is taken out equal to the calculated IHT bill. Then of course there is all the additional trusts that very wealthy seem to be able to set up to take many assets out of an estate.

The higher rates certainly did! Nowhere did I (or would I) suggest a return to those levels, just an additional couple of pence.

It's not been a huge "dodge" at all. The rules/laws/reliefs/exemptions were specifically provided for that exact scenario. It's not a loophole, it was the exact intention of the legislation at the time.

Was there ever a time that farmers didn't moan their heads off about something?

Just out of interest, where would people suggest we raise tax from to pay for our (ever crumbling) public services. Or would they prefer a "pay as you go for everything" system rather like the States. Genuine question.

And yet people like Jeremy Clarkson have actually said he bought a farm in order to avoid inheritance tax on his estate.

Was there ever a time that farmers didn't moan their heads off about something?

Will you moan if we have lower food security?

And has owned it, I think, for nearly 20 years creating employment for many, and spending huge amounts of money on contractors, builders, advisors, staff etc in the local area in the mean time. He has also established two other thriving enterprises - a farm shop and a pub, also employing people locally, and providing work for local businesses. Sure, he makes most of his money elsewhere but one can’t really say that he hasn’t benefited the local economy. And so the IHT relief is small beer compared to the impact locally and to the exchequer. But sure, focus on just part of the picture…

Username checks out 😂

Farmers always moan, usually about anything at all, 100s of 1000s of acres are used to grow biofuels, which add nothing to our weekly shop.

They never have any money, are always broke and always threatening to sell up and many do, making a fortune selling to Persimmon etc.

I've just been speaking to an IFA, its quite incredible the range of vehicles still available to avoid Inheritance Tax, in fact, its quite possible to avoid almost all tax especially at the higher rates.

The new rules on IHT for farms allow 10 years to pay, i'm sure we'd all love 10years to pay our tax bills.

I once stayed in a farm house B&B where the "farmers wife" was complaining that she'd just got back from Cyprus that morning and how hard it was to make a living from "the thin soil in these parts", while my summer hols were a few days in a B&B in Yorkshire 🤣

Surely a good tax system incentivises spending and investment that brings wider benefits. Investment into things which grow the economy, create employment and produce necessary things should be more tax efficient than things that don't.

If he put his money into developing a working farm rather than, say, a stack of buy to lets so that he can pay less tax then that's a good thing and worth far more to the Exchequer ultimately than a little IHT hit when he dies.

I see the government are blaming Liz truss for the slump in the pound after their budget.

It's a good job you don't eat food isn't it.

I've just been speaking to an IFA, its quite incredible the range of vehicles still available to avoid Inheritance Tax, in fact, its quite possible to avoid almost all tax especially at the higher rates.

Course you have.

Do share your IHT tax avoidance plans.

Just out of interest, where would people suggest we raise tax from to pay for our (ever crumbling) public services.

I would have reversed the Tories recent cut in NI, which was only done to spite Labour pre-election; amalgamate income tax and employees NI and then increased the new income tax. That is the most progressive way imo.

I also would have abandoned the idea of spending £22 billion on this deluded carbon capture scheme.

Still?

I’ve just been listening to an economist round up the markets’ thumbs down and why

He was clear on reasons related to Reeves’ budget

UK still suffering from trauma of Liz Truss, says Treasury chief https://www.theguardian.com/uk-news/2024/nov/01/uk-still-suffering-from-trauma-of-liz-truss-says-treasury-chief-darren-jones?CMP=share_btn_url

Could there be less accountability. I don't think they planned the response and the reality is that high debt will cost more to service.

Might be prudent to check whats happening today?

Markets have calmed dramatically, Gilt yields marginally just higher than in the spring of 2024 after Hunts budget. 4.37 vs 4.41.

It impacts low-paying organisations the most anyway.

A business employing all their staff on the national median wage would see a c2.4% increase in overall staff wage costs with these changes. One employing them on the real living wage will see a c2.9% increase and one that's employing staff on the national minimum wage will see a 3.1% increase from the NI changes.

Given that it's pretty standard to budget for a 2-5% increase in staff costs, most decent businesses should be in a position to absorb these changes and say "Hey folks, unfortunately due to these NI changes you won't get / will get less of a pay rise this year (which is shit), but your jobs are safe and we'll be able to resume again next year".

The issue is most acute for business paying NMW as they have no choice but to cover both the NI and NMW increases in one go, which means they're facing a c 7.3% increase in overall staff costs. But that's the risk you run if you opt for NMW over a fair wage. If those same businesses had chosen to pay their staff the real living wage instead (a whole £1.16 p/h more than NMW) they'd only be looking at the 3% increase next year.

The local economy seems to actively dislike him. It's a frequent feature on his shows.

Also he doesn't run it as a 'farm', it's run for entertainment purposes and that's clearly and easily its primary purpose. No farmer in his or her right mind would run the farm like he does if they actually had to live off the proceeds.

Some "locals" don't like him because of prejudice. He's "annoyed" a lot of people over the years, such as Express readers and Peugeot drivers. I can assure you that lots of locals absolutely love and support him, especially the local businesses who benefit directly from his businesses, the staff he employs, and the local businesses who benefit indirectly by virtue of the extra "footfall" he's brought into the area, just to visit his farm, and who stay in local holiday lets and hotels, drink in local pubs, eat in local cafes and restaurants and shop in local shops. The "Clarkson" affect on the surrounding area is huge!

The "entertainment" side is all staged. No sane person thinks that Clarkson genuinely runs the business like that. No sane person thinks he genuinely ploughs his own fields. He employs lots of local staff to actually "run" the farm professionally - it's far more than Gerard and Kaleb, in fact, neither of them actually do much "proper" work on the farm anymore either - their involvement is now also primarily on the "entertainment" side of things.

One thing that IS real is Clarkson's campaigning on behalf of other farmers. He's absolutely nailed it with his highlighting of the problems being faced by farmers and how tough it is.