Top 5 financial things to do before labour get in?

[sugerbear]

Simpo Two said:

sugerbear said:

I am not sure the teachers are necessarily better, they just have less children to teach...

They don't have less children to teach, they have fewer children to teach...

100 lines incoming

[macron]

WayOutWest said:

I realise all politicians are economical with the truth but Rachel Reeves does seem to have backed herself into a corner on saying what taxes she won't increase, in an effort not to scare anyone before the election.

I can't see how VAT on school fees and chasing a few non doms will cover anything much at all.
Reeves has ruled out NI or income tax hikes, or corporation tax hikes, and due to fiscal drag the Personal Allowance is well overdue an increase (which would prevent the stupid Tory announcement on Triple Lock Plus pension even being relevant).

So where is all the money going to come from? Aligning Capital Gains Tax with Income Tax seems most likely but they tried to deny even that would change.

IHT threshold fixed, LTA reinstated, both presumably staying there to let that fiscal drag fk us all.

So top 5 things to do,

1) if you are old, give stuff away to get or keep your estate below the threshold. Trouble is old.folk worry and tend not to.

2) Think if you really want more in a pension, depending on how close you are to that limit, ie should you diversify?

3) Retrain to be a doctor on a high salary as they won't have an LTA apparently, but everyone else will.

4) sell any second home before that's prohibitively expensive to retain, although circs dependent it may be two houses/ separate names could work,

5) err. Move to a less st country? Not that we have any idea what Labour would do, they've just said what they won't do, but we do know us oldies will get loads of free stuff paid for by the young (our tenants, of course) if the blue team stay in, so we can afford holidays somewhere with less effluent on the beach.

[OoopsVoss]

This is a bit of a weird "prepper" thread.

The probability that Labour can do anything nuts is pretty low (outside the VAT on school fees and property driven wealth tax), the cost of implementing the hedge is probably worse than the reality.

A conservative Prime Minister (the Trusterf**k), limits the lunacy. As much as we all think the left are wallies - 100% debt to GDP, anaemic growth and over reliance on London curtails (high probability) anything stupid. No matter how much the fringe loons cry for nonsense policy, Starmer, Reeves etc are politicians their own survival is more important. They are system bounded.

[Ken_Code]

OoopsVoss said:

This is a bit of a weird "prepper" thread.

The probability that Labour can do anything nuts is pretty low (outside the VAT on school fees and property driven wealth tax), the cost of implementing the hedge is probably worse than the reality.

A conservative Prime Minister (the Trusterf**k), limits the lunacy. As much as we all think the left are wallies - 100% debt to GDP, anaemic growth and over reliance on London curtails (high probability) anything stupid. No matter how much the fringe loons cry for nonsense policy, Starmer, Reeves etc are politicians their own survival is more important. They are system bounded.

It doesn’t need to be “nuts” to be worth thinking about mitigating. Even a relatively small wealth tax would be expensive for some, as would be stopping fault-free evictions, increasing income tax or imposing a surcharge on pension savings.

[Jon39]

Some posters seem to believe a politician when they hear, we won't raise income tax, NI, or corporation tax.

It is quite easy for a government to say later, Oh, we were left such a financial mess by the Tory scum, that we are now having to modify our original intentions. Not raising, but 'modifying' due to unforeseen circumstances.
In 1974, the Labour government increased the top rate on earned income to 83%.
With the investment income surcharge, this raised the top rate on investment income to 98%. Why bother to work for 2 pence in every Pound earned.

There were strikes galore, the economy was in a shocking state.

ISAs are just ideal for a socialist government to tax. Privileged people involved in these dodgy tax avoidance schemes. There are now quite a number of ISAs well over £1 million and every penny is tax-free. A Labour government will ignore aspiration and people saving to be independent in the future. The reasons given will include, £x million is being lost in tax revenue, which is needed by hard working poor people, schools and the NHS. Hard working of course only applies union members in manual jobs, not people working hard in offices, or so called 'middle class' people.

An 'incentive to save', eventually becomes 'lost tax revenue' to a politician, even though there was no tax revenue received in the beginning.

Edited by Jon39 on Thursday 30th May 23:17

[Cupid-stunt]

Jon39 said:

An 'incentive to save', eventually becomes 'lost tax revenue' to a politician, even though there was no tax revenue received in the beginning.

Edited by Jon39 on Thursday 30th May 23:17

well said that man - couldn't have put it better myself.

[OoopsVoss]

Ken_Code said:

It doesn’t need to be “nuts” to be worth thinking about mitigating. Even a relatively small wealth tax would be expensive for some, as would be stopping fault-free evictions, increasing income tax or imposing a surcharge on pension savings.

And thd Tories won't? The same applies to the Tory government right now. Hunt has confirmed fiscal drag through to 2028, I wouldn't rule anything out from them. The Tories however are just more transparent on their actual policy platform. Staying in power. All else is secondary, even if it means longer term damage.

Some form of wealth tax (very likely through property) is coming, but they are still politicians. That means they are bounded on 1 side by the electorate the other the market. The economy has been mismanaged from the 90s thru to today, we are all going to have to pay the piper on that one.

[OoopsVoss]

Its going to be property / land.

Pension is too risky politically, they have a longer term funding problem with the state pension; so they need to encourage self provision.

This is going to be centrist Labour, not fringe Labour (although I will caveat IF they don't get a decent working majority - ALL BETS ARE OFF - it could be worse than the last 14 years).

Edited by OoopsVoss on Friday 31st May 08:58

[Jon39]

Cupid-stunt said:

Jon39 said:

An 'incentive to save', eventually becomes 'lost tax revenue' to a politician, even though there was no tax revenue received in the beginning.

Well said that man - couldn't have put it better myself.

Thank you.


Some more interesting thoughts.

Is there a difference between a promise and a politicians pledge?
Tony Blair's pre-election pledge was, no increase to Income Tax.
After achieving power, National Insurance was increased.

Sir Kier Starmer (call me mister, publicly funded by nursery at Reigate Grammer School) has supported a pledge of no increase in Income Tax, National Insurance and Corporation Tax.

See charts;
Looking at past Labour governments addiction to spending tax payers money
and the main sources of government revenue; income tax, NI, VAT, corporation tax (all derived from economic activity),
there will need to be huge tax increases from other tax streams, which at present only contribute minor amounts.
Non-dom and private schools VAT will be minor contribututors and capital gains tax has always provided less revenue following rate increases.

Edited by Jon39 on Friday 31st May 09:37

[db10]

Stick Legs said:

I disagree in my particular case only.

2 income household. Both PAYE.
Joint income around £200k pa. Both earning about the same.

The 45% tax rate seen in Scotland will almost certainly come here. Inflation will rise as Labour will spend.

Fiscal drag will be as damaging as any deliberate policy.

PAYE ‘high earners’ are the easy cash grab for a government of any stripe. I’m not hopeful.

assume you meant to say the 48% tax rate rather than 45% (45% is the top rate in the rest of the UK)

[Car bon]

They will argue that growth is the answer.

If everyone produces and earns more, then tax revenues will rise even when the % doesn't change.

Delivering growth is the hard part.....

I expect them to go after everything that would be classed as unearned income - so the 'hard working people' on PAYE less impacted.

[Ken_Code]

If they actually do care about growth then tackling the UK’s woeful productivity would be a good start.

[I 8 a 4RE]

Can someone please enlighten me on pre-paying your private school fees?

I have asked the bursar at our school and he states it is not an option from amongst other AML reasons. Extract from long email below.

—-

We have been advised that to do so will probably not work as a tax avoidance scheme for two reasons:
Firstly, as it has been in the press, it is likely that it will be included in the Labour Party foreshortening measures when they announce the change. This means that they will be able to backdate any tax to when they announced that they intended to make the tax change.
Secondly, tax is charged at the time of use so it is likely that HMRC will say that the tax for each year's education is charged at the time of the education.

—

Any tips to circumvent above very welcome.

[NRS]

Jon39 said:

Some posters seem to believe a politician when they hear, we won't raise income tax, NI, or corporation tax.

It is quite easy for a government to say later, Oh, we were left such a financial mess by the Tory scum, that we are now having to modify our original intentions. Not raising, but 'modifying' due to unforeseen circumstances.
In 1974, the Labour government increased the top rate on earned income to 83%.
With the investment income surcharge, this raised the top rate on investment income to 98%. Why bother to work for 2 pence in every Pound earned.

There were strikes galore, the economy was in a shocking state.

ISAs are just ideal for a socialist government to tax. Privileged people involved in these dodgy tax avoidance schemes. There are now quite a number of ISAs well over £1 million and every penny is tax-free. A Labour government will ignore aspiration and people saving to be independent in the future. The reasons given will include, £x million is being lost in tax revenue, which is needed by hard working poor people, schools and the NHS. Hard working of course only applies union members in manual jobs, not people working hard in offices, or so called 'middle class' people.

An 'incentive to save', eventually becomes 'lost tax revenue' to a politician, even though there was no tax revenue received in the beginning.

Edited by Jon39 on Thursday 30th May 23:17

And yet at the same time we're told there is no difference between Labour and the Conservatives now, and they're the same. Too many people are harking back to what they remember 40 years ago when they were a young person and most of your ideals are formed. The world is a very difference place now. Both parties are just meandering along controlled by a big debt that will increase because so much growth has moved to cheaper countries, and we have a big population bomb to get through (less workers, big increase in expenses for healthcare and pension).

The reality is both parties are pretty limited in how much more they can tax/spend and are just kicking the can down the road while they earn their salaries and expenses while in power.

Ken_Code said:

If they actually do care about growth then tackling the UK’s woeful productivity would be a good start.

A wealth tax here makes a lot of sense. Salaries have stagnated against inflation for a few decades, wealth has beaten it. We need to encourage spending on stuff that actually is growth, not just sticking your money into land or similar and getting better returns despite it not actually doing anything for the economy. Encourage more investment in automation etc for people to be more productive. It also will help the issues caused by less workers being available as the boomers retire, we need more automation to keep the same amount of work being done despite there being less people for it.

[OoopsVoss]

Ken_Code said:

If they actually do care about growth then tackling the UK’s woeful productivity would be a good start.

Which is partly why they are on a tightrope. Business is fickle, they know Labour is incoming. They are already doing the consultations on what does / doesn't fly. The elephant in the room IS productivity & investment (the UK has been climbing up the ranks on FDI). They have to appear stable or that goes to Paris etc (which politically looks less stable).

They have to maintain centrist and stable credibility. They have to fire the growth engine. They need to continue to purge the left. IF they do that, they have some borrowing headroom. The more stable we look, the calmer the Gilts market, the ability to borrow remains. There will be market side pressure, but from the Trussterf**k to now - we've had an awesome lesson in inflation / rate control. I'm sure there is a wealth tax out there, that many will hate - but they know its all about growth. I don't think they look ambitious enough on the UK Investment Bank / SWF stuff (personally), albeit I think they should cede political control on that.

[Ken_Code]

I 8 a 4RE said:

Can someone please enlighten me on pre-paying your private school fees?

I have asked the bursar at our school and he states it is not an option from amongst other AML reasons. Extract from long email below.

—-

We have been advised that to do so will probably not work as a tax avoidance scheme for two reasons:
Firstly, as it has been in the press, it is likely that it will be included in the Labour Party foreshortening measures when they announce the change. This means that they will be able to backdate any tax to when they announced that they intended to make the tax change.
Secondly, tax is charged at the time of use so it is likely that HMRC will say that the tax for each year's education is charged at the time of the education.

—

Any tips to circumvent above very welcome.

You could ask them to take your children “off the books” for a payment in actual cash. I understand that it’s quite common when paying plumbers and the like, so maybe worth a try. If you don’t ask, you don’t get.

[I 8 a 4RE]

Ken_Code said:

You could ask them to take your children “off the books” for a payment in actual cash. I understand that it’s quite common when paying plumbers and the like, so maybe worth a try. If you don’t ask, you don’t get.

LOL - I don’t think I would want a school that would tolerate that type of behaviour to teach my kids with honesty and integrity.

If that’s the only way, I take comfort in knowing I am paying the 20% because the school is manager so well, they don’t need to do dodgy deals.

[boyse7en]

I 8 a 4RE said:

Can someone please enlighten me on pre-paying your private school fees?

I have asked the bursar at our school and he states it is not an option from amongst other AML reasons. Extract from long email below.

—-

We have been advised that to do so will probably not work as a tax avoidance scheme for two reasons:
Firstly, as it has been in the press, it is likely that it will be included in the Labour Party foreshortening measures when they announce the change. This means that they will be able to backdate any tax to when they announced that they intended to make the tax change.
Secondly, tax is charged at the time of use so it is likely that HMRC will say that the tax for each year's education is charged at the time of the education.

—

Any tips to circumvent above very welcome.

Put your kids into a state comprehensive and donate the money you would have spent on private school fees each year to the PTA. They can then use it to buy better books/equipment/trips for the entire school, improving the standard of everyone's education.

[nikaiyo2]

clio007 said:

Where do we think houses prices will go under labour?

Where did they go last time?

It is an easy way to generate good feeling and spending money. Its the one thing I keep thinking, just buy another BTL and screw the idiocy they will introduce so long as i can get out with in5 years it will be a great investment.

[Ken_Code]

I 8 a 4RE said:

LOL - I don’t think I would want a school that would tolerate that type of behaviour to teach my kids with honesty and integrity.

My mistake, sorry, I thought that you were asking how to work with them to evade tax.