To wonder how the UK will look in 3 years time?

[Labradorlover987]

I was inspired to write this after reading the UC post that was just reported - the govt’s welfare bill has passed but was watered down so unlikely to make any real savings.

I earn 40k, have a school age child and just feel like I am living hand to mouth 😩 I 100% think there should be a welfare systems that supports people on low incomes but I wonder how the current system will be sustained in the long run?

Just wondered what other people thought.

I actually wouldn’t mind paying more in taxes if we could be guaranteed more in services etc - for example my council tax just went up and the services seem even worse this year than usual.

As discussed up thread, many economists and institutions now believe that reducing inequality - via, for example, progressive taxation, is more likely to promote growth than reduce it.

https://www.oecd.org/en/publications/policy-approaches-to-reduce-inequalities-while-boosting-productivity-growth_af121c8f-en.html?utm_source=chatgpt.com

https://www.imf.org/external/pubs/ft/ar/2018/eng/spotlight/making-growth-inclusive/?utm_source=chatgpt.com

Are you really an accountant of 30 years, as per your earlier post?
It's astonishing that you don't seem to understand the effect the NI and NMW increases have had on SMEs.

Everyone knows that ChatGPT is really sh.t at maths, but how people can be so illiterate???

£615 increase is 15% of difference between 9100 and 5000.

It does not take into account extra 1.2% on everything above this rate!

This poster is accountant?!?
OMG

Why do you think accountants all work for SMEs? Doing their financial statements and tax returns?

it’s probably your own lack of knowledge that makes you think that. I don’t know anyone that runs an SME professionally or personally. Neither do they interest me.

I do understand business models and sustainability though.

Did you see the sentence above calculating the 1.2%?

The UC figures are now even worse.
UC claimants has reached a new high of 8 million.

I don't disagree with you about NMW. I'm talking about the overall impact of Labour policies on businesses and then on the economy.

Raising income tax will kill everything once and for all - people nearing thresholds either put it into pensions or reduce hours. £100k is simply proverbial at this stage, but those approaching 50k are doing this as well. It hampers productivity.

We can't afford anymore tax increases, we need to review spending.

Apparently so. I'm glad they're not my accountant.

You don’t know much about accountants do you?

So what would you cut?

I've employed quite a few. They can usually add up, and have at least a basic understanding of the economy in my experience. They would all understand immediately the consequences of the budget on SMEs.
I'm certain they would all be aware of the latest jobs market figures showing losses particularly in retail and hospitality, which would include the cafe mentioned upthread.

You should probably be aware that accountants do all sorts of things and a sizeable number do not work for individuals processing their tax returns.

try asking someone who restructures university financing at kpmg to tell you about the latest job market figures in hospitality. Good luck!

see my post at 21:49

As a bare min I'd time limit UC. Give claimant a year to sort themselves out. And link it to previous earnings. In parallel I'd actually reduce taxes, especially at the bottom end.

FT NMW now gives you about £1750 net per month. It's tough but liveable. For a couple on FT NMW it's totally liveable with childcare paid for them.

And I'd make PIP to be based on formal diagnosis.

I mean... I'd expect more or less literate people at least to read some news
UK jobs market cools as vacancies fall - BBC News

Accountants I'd expect to read FT
UK economy shed jobs in July

And not to ask ChatGPT about impact of NI and NMW increases

I don't disagree that we need welfare reform. However, I don't think it's as straightforward as you think.

Firstly, if we're going to require a diagnosis for PIP, we'll need to sort out NHS waiting lists so that people aren't waiting years for a diagnosis. So that will require increased spending.

Secondly, if we want fewer people on disability benefits and more in work, employers will need to bear the extra costs of making reasonable adjustments etc, perhaps tolerate any attendance issues etc. That isn't necessarily a bad thing, but it won't come without a cost for someone.

What would you propose should happen to someone on UC who doesn't manage to "sort themselves out" after 12 months? Are we leaving them to beg, borrow or steal at that point? What do you think the social consequences of that might be?

Finally, you say that one third of working age population don't pay any tax at all. Surely you meant to say that they don't pay income tax,, rather than not paying any tax at all?

Your expectations are wrong, and weird. Being an accountant is a job. Why would they do all that unless they needed to in relation to their role?
Most big organisations (not the high street accountant you use) provide staff with the market intelligence they need for their jobs in house. I would’ve thought anyone with some corporate experience would know that.

This in spades.
The 'rich' who think they are rich are far closer to the homeless guy in the street than the uber rich. Its sad that they dont see that, and that when the middle class, and the upper middle have been screwed out of their money, then they, or their children, will be next.

Its time that everyone who works, everyone who isnt in this super elite club, joined together rather than continued to fight and scrabble for whats left. because without doing so there will be nothing left.

My corporate experience of 30 years in FTSE top 10 in reasonably senior roles tells me that accountants there have a level of intelligence and education which make them at least understand the impact of tax changes on general economy and behavior of both businesses and individuals.

I'm sorry you don't get it.
Let's move on.

This is not true. The UK data centre sector is worth billions and predicted to double in the next five years. I work adjacent to this sector, so I know this.

So people who don't want to be taxed into oblivion love their country less? What an idiotic argument. And UK taxes hardly benefit the poor, why don't you read the statistics about who actually benefits the most from those taxes you love paying so much. Why is it that people who proclaim to be oh so bright are actually the opposite?

What would you propose should happen to someone on UC who doesn't manage to "sort themselves out" after 12 months? Are we leaving them to beg, borrow or steal at that point? What do you think the social consequences of that might be?
But this is exactly how it works in Scandi though. If you didn't find a job in a year you'll be given some in public services - street cleaning, whatever, you can't refuse it. Our current system makes it almost better for an individual to stay on benefits, esp with small PIP supplement, rather than work in NMW. And your point re waiting lists for diagnosis - in most cases they aren't more than several months, at least not for conditions so severe they require PIP. Treatment might be longer, yes, but not diagnosis.

Finally, you say that one third of working age population don't pay any tax at all. Surely you meant to say that they don't pay income tax,, rather than not paying any tax at all?
Well, they pay VAT on their spending and possibly council tax, that's it. They don't contribute anything at all to services they consume.

Well, given that some of the services they consume are paid for with council tax and revenue from VAT goes towards health and education, that’s not quite true.

I agree with this completely but I also don't agree with an increase in taxes which disproportionately hurt workers, middle class and upper middle class much more than the uber wealthy. So what is the answer?

If you want to tax me risking my life savings and my house in the same way as taking a job then be prepared to see investment plummet, start ups plummet.

Who is going to be mad enough to risk everything and then pay 50% tax on it?

There isn't a country in the world that taxes capital gains like that.

Great plan

• Create 1,000,000 (1m) business.
• Sell it, pay 45-50% tax on sale.
• Have 550,000 left.
• Die, pay 40% on that amount over your house proceeds because you live in the South East.
• Have 330k left.

Tax paid = 670k Tax rate - 67%

Excellent system. Currently it works as

• Create 1m business
• Sell it, pay 24%
• Have 760k left
• Die pay 40% on that amount over house proceeds etc
• Have 420k left

Tax paid = 580k. Tax rate = 42%

Or, I can live in multiple European countries with no capital gains tax and no inheritance tax. Sounds better?

In the UK, the top 1% pay 29% of income tax, top 5% pay 49% of income tax. This is more than any country in Europe. You have to be smoking crack to think we aren't getting enough tax from them.

Can you please look at tax rates in Europe? Other countries have far higher taxes on lower earners.