The Annual Chancellors Budget 2010 - discussion - How are YOU affected?

So, the new chancellor has presented his first budget, and made some fairly poignant and bold decisions regarding changes to the country's economy over the next few years. What do you think of the 2010 budget in general, how do you think it compares to Gordon Browns signature "all hidden in the fine print" budgets of old and most importantly, if you're happy to discuss it - how will the changes announced today affect you or your family?

For my own family, the changes will be quite radical. Changes to the VAT rate which will be introduced in Janurary (start of the clendar year rather than the start of the fiscal year as previously expected) will obviously affect everyone. If it means there's a chance of the economy stabilizing in the next few years then I'm all for it, but 2.5% on all spending is hard to swallow at first, especially as an offshore UK island resident. Everything is already more expensive over here than on the mainland, so the VAT rise may be felt a little more here than anywhere else.

Both my parents work in the public sector, and so their pay is to be frozen for two years. It stings a bit for both Mum and Dad, because Mum was only seeing less than 2% per annum as it was, and Dads union (FE Lecturers) have been attemting to secure a pay rise for about two years to more or less no avail. They recieved a small rise last year which barely surpassed inflation, making it a giant waste of time.

The rise to 28% in capital gains tax affects us as well because we own more than one property. Of all the announced increases that affect our household, I think this is the one that has us reeling :/

State pension age increased to 66 - I don't know the specifics, or if he's even eligible to collect it when he retires, but if so, this will affect Dad in the next 5 years.

Small businesses (oh hai ) get a welcome tax cut to 20%, so that takes the sting out of the VAT increase a little for me. Whether or not it'll be implemented in NI was still under question the last time I checked, but NI economists are optimistic that it will be introduced at the same time or shortly after it comes into effect in the rest of the UK.

Also, as someone who does a lot of travelling for work, the omission of an increase on fuel tax was more than welcome. I don't know what fuel prices are like in England at the moment, but I'm paying as much as £1.20 per litre for Diesel at the moment, getting 640 miles per tank and filling a 48 litre tank at least twice a week. More fuel tax was definately something I didn't need!

I also welcomed the decision to abandon both the plans and the department dedicated to those plans to asses and implement the introduction of the Euro as standard currency in the UK in coming years. I haven't spoken to anyone today who hasn't welcomed this decision.

That's about it. I just want to add that as someone who is strongly opposed to binge drinking and heavy smoking as health concerns and being detrimental to society, I was surprised and disappointed that the Chancellor didn't find some extra capital by increasing the price of alcohol and tobacco. I kinda just assumed that he would

 

I wonder if large Businesses will swallow that 2.5% increase like they did when the VAT went from 15% to 17.5%, even if it was temporary.

To be honest, i don't really understand anything else, i suppose i should really given i'm 22 now, but i do wonder how many 20+ year olds actually understand all the other bits and bobs that comes with the 'Budget'.

Sam

 

The VAT increase stings a bit (20% is a little bit of a piss take considering we're taxed on all the money we earn - then lose more money to the Taxman when we want to spend it, but oh well...).

Apart from that, I won't be hugely affected as I'm re-entering full time education in October.

The Cons/Lib Dems will probably catch a lot of flack for this budget, but someone had to make the cuts. Well, if brown had stayed on he would have probably tried to fix the economy with yet more borrowing, but that's another matter...

Also, we can't forget that the last time the Conservatives inherited a financially crippled government, they turned everything around before handing off to New Labour to **** things up again.

 

I'm quite happy by the budget. Nice to have a competent Government come in to fix Labour's mess and lies

 

I take a small hit.
I'd rather have the budget deficit cut and get the country out of debt, then spend money we don't have to try and stimulate a slow and broken economy.



+2.5 % VAT will make as much difference to my sepnding habbits as -2.5% did.
i.e. f~ck all.

Slightly out of pocket with the kiddies, but as one starts school thisnyear and the other next year we're £1000 a month up on not paying nursery fees, so again, FA difference in real terms. We lose £2~100 per month in loss of income as our combined wages exceed £40000 (just) bet as we won't be paying £1000 a month in nursery fees, it's not realy a hit we'll notice.

Not read up on the tax allowance, but as my understanding is, PA wages are only taxed after your allowance. AFAIK it has gone up £1000 to £7500 pa so a fella on on £10,000 pa will only pay tax on £2500. So I'll pay slightly less income tax, but again, as I earn around the national average, not a great deal £220 for the year or £18 a month.

I work in a school so the pay freeze is a bummer, but we got a pay deal finalaized 2 years ago, I wasn't expecting any big changes for about 5 ~10 years. SO thay would only affect the standard cost of living increment, which is only 2% or so. With inflation being so low in real terms it's not going to affect me unless inflation goes up.

I'm all for the increase on capital gains tax.
If you're "using money to make money" then that should be taxed, as most people will do this as a second income, they're still under the standard 40% TAX most folks would get with a second income.

 

I studied Business and Economics for 3 years in school, and I have an unfair advantage - Mums job requires her to have a full knowledge of matters like UK economics, finances, wages, public spending etc as she works in the public financial sector, so it's rubbed off on me over the years.

 

Some parts are fair enough, but others seem overly harsh - my parents are both teachers and Herr Osbourne has just forecast a 25% reduction in the amount of funding available to schools. Considering that every penny counts even now, that's a huge problem.

Meanwhile, there's been a big reduction in corporations tax. This is why all those business leaders came out to tell us that the Conservatives would be the best thing for Britain. One person said it very nicely. If the cut in corporations tax had not been made, the savings would be enough to pay the higher university fees for every student in England.

The 2.5% increase in VAT is basically nothing. Sure, it adds up over time, but even on an £11750 car it will only result in a £250 increase - not much for most people.

 

A fair point on the cuts, and to be honest 25% did seem pretty major when I seen it too.

However I do support the corporation tax reduction - as Cameron explained very badly during the TV debates, the Government is somewhat limited when it comes to the day-to-day growth and change within its economy. Sure it can set regulation etc, but ultimately private businesses are needed to grow and (positively) change the economy.

Thus hopefully the corporation tax cut along with some of the NI changes (making new business start-ups a little cheaper) will be benefitial.

And I agree that the VAT cut means very little. Consumer spending barely increased when it got cut 2.5%, and thus I doubt it'll fall now that it's been increased 2.5%. Especially since food and certain items are still 0% or low% items.

 

Aye the only place you'll notice the VAT rise is petrol.

 

I think it's been done very well. All that will affect me is the 2.5% rise in VAT as I go back to full-education in September after a gap year. And the pay freeze wouldn't have affected me anyway.

I do find it funny when you get people moaning on TV/Radio/Facebook over the cuts like they are shocked it has happened? I even heard one person moaning about the VAT rising as she can't buy all the clothes she wants... Also another woman sounded angryish on the Radio and said the MP's should take a paycut (She's really up to date on the news...). It was goin to happen, but sadly it could lose Conservatives votes, and in the next general election you'd probably get people to vote Labour to ruin the economy again. And in a sort of related subject, I'm glad they are finally clamping down on Benefits.

 

Personally, I don't think that Cameron should be allowed to pay his PR gurus £100k plus. Their sole purpose is to make him look good, and I don't think that £100k is in the public interest.

He contradicted that by refusing to give the games industry any kind of tax break - surely one of the most profitable industries.

I agree with the majority of that, but growth was fine in the good times with the 'high' corporation tax, so whilst it might promote growth now, it is not totally necessary to achieve good growth.

It might improve growth, but I think that offering huge concessions to large corporations (thus benefiting the workers of today) is not as important as perhaps ensuring a good education (benefiting the workers of tomorrow).

The reduction could have been lesser, leaving more money for other, more important things.

 

The 2.5% increase is designed to be minimally noticeable to us, but for the government it's a pretty substantial increase indeed. £13bn/year was touted on the news earlier, which is a serious wodge of cash that the country badly needs.

Imo the budget is very reasonable for such a tough time economically. Desperate times and all that.

The cut in education spending is the only thing I have issue with, but I have no doubt there's reason behind it. The downside is that my mum, as a support teacher, could well lose her job.

 

From what my mum's been telling me, she tends to lay off teachers by employing them on temporary contracts in the first place, which makes it easier. Basically, if your mum's on a permanent contract, she's at least more secure than temps - there's a big problem though, in the last few years more and more professionals have been joining teaching, in many cases because it was easier than finding a job in the city or in the IT industry. Now, there's going to be loads of redundancies - big problem, will make it much harder to find jobs.

On a totally different note, I read that Osbourne said today 'We're all in this together'. Now, personally, the first quotation that came to mind after I read that was part of George Orwell's Animal Farm. 'All animals are equal, but some animals are more equal than others'.

It works quite nicely in this context, I think.

 

Agreed. I know Labour did pretty much the same thing, but Cameron was the one who started the whole "We're new; we've changed" thing

Aye fair points, I'd agree overall.

The removal of the tax relief does seem silly. I guess they just don't see it as a priority at the moment (which I can kind of understand; this is a policy/cut that won't really affect 99% or more of the public). Still, I do agree.

 

The VAT change is both retrograde and fair. Retrograde as in it hits those with low to low middle incomes harder then it hits higher incomes due to relative proportions of spending compared to saving. Fair as in the whole VAT system is a lot fairer then a sales tax system, where produces have to pay VAT on value added rather then just taxing the end consumer.

Its also a giant pain in the arse as I now have to spend extra time checking all my spreadsheets, client records and book keeping programmes to make sure they're correct, especially annoying as I've only just sorted them a couple of months ago from the last dicking about. But such is the life of an accountant.

The increase in personal allowance is a welcome change as it gives a good incentive to work, as are the NI changes, though this change makes it easier to work and employ. I did think that the speculated change to £10,000 was a little ambitious but it would have been nice as it would have made all low income earners £800 better off, as it stands we're £200.

I don't feel too bad for the pay freezes in the public sector as its something most of the private sector has had to deal with. I am ok with the fact they've set a threshold below which the full freeze wont be felt.

Though as a single male with no dependants living at home, I feel that I'm an overall winner from this budget. What I would like to have seen mentioned is how they plan on helping people out of my situation. Renting just seems like a waste of money and with my current salary there is no way I could afford a deposit or a mortgage with house prices being so high. An average 1-2 bed house or flat in my area is £80k+ which is 6 times my current gross salary.

 

In general, I applaud this budget and its efforts. The Conservatives / Lib Dems do not really want to be doing this, in fact things like freezing public sector pay and various benefits in most years would be considered complete political suicide - but we all know that theres no money left in the bank. Paying 25% of the government's budget on interest alone is absurd and something has to be done. But I can't complain too much as I earn the minimum wage and thus the raise in income tax threshold will leave me better off. Shame about VAT when it comes to computer parts but honestly who notices when a £500 graphics card becomes £510...

 

I've always been against the Conservatives on ideological grounds, but I have to say this budget is excellent, and I praise George Osborne for having the conviction to go through with what needs to be done when everyone will have him for it. Interestingly, I also find it a very leftist budget. Sure it reduces personal freedom (ie anti-liberal) but it doesn't do this to give big business more more as in the Conservative past (ie libertarianism/laissez-fairism). Bravo for joining the Left!

 

Cut in corporations tax - 28% to 24%, which will see the government losing £2.7 billion a year. This is despite the G7 average corporation tax being 32.87%.

 

I'm liking it personally, but I am a student, so I'm largely unaffected by it. The papers are going crazy with it though, toxic wastes of space that they are.

I dug up some lists on the UK's national debt if anyones interested:

Article from last June spelling out what is owed.

A nice list of countries debts.

A weird chart thingy that shows the national debt as % GDP and breaks it down into sectors.


Basically the government needs the 2.5p per £1 alot more than we do... We don't want to go the way of Greece...

 

I'm disappointed that the duty on alcohol and tobacco didn't go up. Both are luxuries, so anyone not able or willing to pay increased prices could do without.