Budget 2025

[C R]

Which loopholes are yuou referring to?

Tax rates on dividends are lower than income tax rates for the same band, for example.

 

[CXRAndy]

She didn't get the point he was asking the first first time, but the did at least indicate MOTs might be an option. Second time she answered it fully, albeit it indicates there is as yet no answer.

The question of the flat fee part of VED wasn't asked and is not relevant. She didn't talk about fuel duty either, or taxes on Jaffa cakes. What's your point?

She is making out EVs dont pay VED and didnt mention this PPM is ontop of the current VED.

This is the Chancellor not a front counter serving Halifax employee.

She isn't and wasnt able to absorb the information.

This is why she is called RFA. Totally useless

 

[Pblakeney]

Which loopholes are yuou referring to?

I very much doubt that the really rich are paid 100% in wages.
There are a lot of tax free (or reduced) ways to be remunerated.

 

[Beebo]

I very much doubt that the really rich are paid 100% in wages.
There are a lot of tax free (or reduced) ways to be remunerated.

Taken from AI. So might be bollox.

The wealthy use loans to avoid taxes by borrowing against their assets instead of selling them, a strategy often called "buy, borrow, die". This allows them to access liquidity for living expenses or new investments without triggering capital gains taxes, as borrowed money is not considered taxable income. By keeping their appreciated assets, their wealth continues to grow, and they can potentially pass them to heirs with the loan being paid off by the estate, minimizing the tax impact.

 

[icowden]

Taken from AI. So might be bollox.

Nope - it's entirely accurate. That's why the weirdo Barclay Brothers had both huge wealth and huge debt.

 

[Psamathe]

I can tell you aren't a politician. The rates of income tax haven't changed and neither has National Insurance. Thus they have "kept their promise". They have raised more tax by changing the thresholds. That's all that matters to them.

It's the same as if they sold lemonade and said "we will not increase the price of lemonade" and then just put less lemonade in the bottle.

Income tax rates have increased on savings

• Tax on savings income will increase by 2 percentage points across all bands. The basic rate will rise from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47% from April 2027. (https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-dividend-income/changes-to-tax-rates-for-property-savings-dividend-income

That a 2% rate increase

The manifesto pledge on NI was not about the rate but about the amount "we will not increase National Insurance" and changing threshold is changing NO contrary to manifesto promise.

 

[Dorset Boy]

Taken from AI. So might be bollox.

The wealthy use loans to avoid taxes by borrowing against their assets instead of selling them, a strategy often called "buy, borrow, die". This allows them to access liquidity for living expenses or new investments without triggering capital gains taxes, as borrowed money is not considered taxable income. By keeping their appreciated assets, their wealth continues to grow, and they can potentially pass them to heirs with the loan being paid off by the estate, minimizing the tax impact.

So who is making the cash payment in respect of these loans? There has to be cash somewhere in the equation.

As for dividends being taxed lower than PAYE income, that's a reflection of / an incentive for the risk being taken. And the fact that a dividend can't be paid if there hasn't been a profit, which will already have been subject ot Corporation Tax. That's hardly the mega wealthy, it's every small business owner set up as a limited company. Or are small business a bad thing that should be disincentivised?

 

[Dorset Boy]

Tax rates on dividends are lower than income tax rates for the same band, for example.

Is that really the best you can come up with?

 

[stowie]

So who is making the cash payment in respect of these loans? There has to be cash somewhere in the equation.

The loan is issued by the bank and secured against assets - this loan is used by the wealthy as their "income" without the normal taxation income attracts. They will generally never pay back the capital whilst alive, they may pay the interest portion (or part) which will attract taxation since this will be a "wage" from their assets or company but will be a fraction of the actual available money via loan. When they die the loan is called in by the bank and offset against inheritance tax thus neatly swerving part of that taxation as well.

It works because the bank is happy to roll-over and extend loans based on asset appreciation. Of course, if the assets collapse they could lose out, but generally these people with access to these schemes are so wealthy the chance of that being the case is very low (a bit like a mortgage secured at a very low LTV).

It neatly does an end run around taxation of unearned income without the wealthy having to give up their trinkets. It is a well known mechanism with Musk etc. in the US. Not sure if the UK HRMC would take such a flexible view to such as scheme as I have never been in the happy position to avail myself of it.

 

[Beebo]

OBR have issued a statement on the early release of their document.

It wasn’t actually emailed or posted anywhere.

“The document was not listed on the OBR website, journalists - including those at the BBC - were able to access it by guessing its URL, which was very similar to one used in a previous official document.”

So it was just a basic phishing exercise which exploited poor file management. But an easy mistake to make for the average administrator who is unfamiliar with such protocols.

 

[CXRAndy]

Employee benefit trusts and Efurbs were once popular ways of manipulating tax for avoidance reasons for company directors and senior staff.

They effectively became illegal after several legislation changes killing off their use.

 

[BoldonLad]

Income tax rates have increased on savings

• Tax on savings income will increase by 2 percentage points across all bands. The basic rate will rise from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47% from April 2027. (https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-dividend-income/changes-to-tax-rates-for-property-savings-dividend-income

That a 2% rate increase

The manifesto pledge on NI was not about the rate but about the amount "we will not increase National Insurance" and changing threshold is changing NO contrary to manifesto promise.

The "defence" on this, from RfA is that very few people have enough saving to use up all of their tax free interest allowance (£1000 of interest pa), plus, they can use Cash ISA to not pay tax on interest.

Just repeating what she said, not expressing an opinion on it.

 

[BoldonLad]

The loan is issued by the bank and secured against assets - this loan is used by the wealthy as their "income" without the normal taxation income attracts. They will generally never pay back the capital whilst alive, they may pay the interest portion (or part) which will attract taxation since this will be a "wage" from their assets or company but will be a fraction of the actual available money via loan. When they die the loan is called in by the bank and offset against inheritance tax thus neatly swerving part of that taxation as well.

It works because the bank is happy to roll-over and extend loans based on asset appreciation. Of course, if the assets collapse they could lose out, but generally these people with access to these schemes are so wealthy the chance of that being the case is very low (a bit like a mortgage secured at a very low LTV).

It neatly does an end run around taxation of unearned income without the wealthy having to give up their trinkets. It is a well known mechanism with Musk etc. in the US. Not sure if the UK HRMC would take such a flexible view to such as scheme as I have never been in the happy position to avail myself of it.

Are the loans interest free?

Asset appreciation improves the banks security for the loan, unless the asset is sold, it doesn't pay the loan.

 

[BoldonLad]

OBR have issued a statement on the early release of their document.

It wasn’t actually emailed or posted anywhere.

“The document was not listed on the OBR website, journalists - including those at the BBC - were able to access it by guessing its URL, which was very similar to one used in a previous official document.”

So it was just a basic phishing exercise which exploited poor file management. But an easy mistake to make for the average administrator who is unfamiliar with such protocols.

Storing the document in a location accessible to journalists was hardly a sensible decision.

 

[C R]

Storing the document in a location accessible to journalists was hardly a sensible decision.

It is piss poor security, who is their sys admin, the CEO's ten year old sprog?