2024 UK politics - now with Labour in charge

Why do thee muppets write these things? The first line about the increase to employers NI.

If you state the increase will be 1-2%, you cannot state the increased tax revenue as a single figure. It also has to be a range. (£10-£20 billion is what the fool should have been writing)

In terms of raising serious revenue, I like the first two, as they implicitly acknowledge what no-one really want to acknowledge, which is that serious tax raising can only occur when serious numbers of people are affected. (Employer NI will filter down into higher prices and / or lower pay than would otherwise have been the case.)

There is actually more impact from freezing thresholds to 2030 than the claimed £3.5b. The Labour rhetoric when the Tories froze thresholds to 2028 was that this was a "bad thing" as it clobbered the "workers", from which one could deduce (if one thinks that leftie politicians are honourable types) that Labour's baseline re thresholds was to start indexing them again immediately.

I quite like the approach re the minimum wage that has been adopted over recent years, i.e. increase it gradually, with a long-term target in mind, so that employers can adapt over time. Whether that target is at the right level is another question.

Unless there's a rabbit around VAT rates that's a tough budget for hospitality

Can you explain the maths of

Removing the threshold

Increasing the NIC emp rate by 2%

That leads to a wage cost increase >2%

Fair.

That's a scenario in which the increase would be greater than 2%.

It does however involve ignoring employer costs including pension

And it's the sort of marginal case which drives the forum mad when the Twitter Tax Person highlights it.

But fair.

I'll do the calculation for our business today and report back.

Though it's the minimum wage increase where the pain lies

Someone who earns £200k pa would increase in cost from £226,344 to £231,600 which is an increase of 2.32%.

Even if you include a 10% pension for the £200k person, the increase is still 2.13%, and that assumes they don't make the pension contribution subject to employer's NI.

This isn't a real world example. I have nothing to do with payrolls.

If someone earns £20k, the employer NIC threshold is £5k and the employer NIC is 13.8% then:

(*) ENIC = 13.8% * (20,000 - 5,000) = £2,070, so payroll cost = £22,070

If the ENIC rate goes up to 15.8% and the threshold is removed then:

ENIC = 15.8% * 20,000 = 3,160 and payroll cost = 23,160, which is an increase of nearly 5% vs (*)

If ENIC goes up to 15.8% and the threshold stays the same then payroll cost is 22,370, an increase of 1.4% vs (*)

So. A real world example

For a drinks distributor of 45 employees and and annual wage cost of c£1million

Changing the rate from 13.8 to 15.8 adds 1.2% to the annual wage cost (NOT 2%)

Removing the threshold too leaves the hit at 6%

Well I'm glad we got that sorted out.😆

It won't happen, but the Telegraph will report that they *thought* about it and that it will therefore possibly happen and is thus the same as it having happened.

Not long now before the Reevesbot stands up.

No exact calcs yet but the Employers NI changes are likely to cost us a few million based on a fag packet estimate.

25 minutes in, and not a single announcement really so far beyond lots of predictions around inflation, growth, debt.

Capital Gains Tax - lower rate from 10% to 18% - big, big increase

Higher rate 18% to 24%.

Property rate remains as is.

This could mean an increase of more than 2% to the wage bill for TailWindHome.

Reeves says the NI changes will raise £25 billion