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Zubedaky

Listed below are comments made by Zubedaky between Friday, 8th August 2008 and Friday, 24th April 2009.

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Why tax the rich? 4:37pm on 24 Apr 2009 The projected deficit for this year, with flakey assumed growth (a blancing figure really), is @ £175bn. Put in context, that's an overspend of 35% against tax take. A shocking figure.

50% for those earning over £150k can only be the start. We will all have to pay more, quite a lot more, and for some time to come too.

Given what this means for future disposable incomes I suspect there will be all sorts of nasty knock on effects, depressing all sorts of sectors - perhaps most obviously house prices among them.

Having recently had an offer accepted on a house, I am now inclined to withdraw until there is some clarity around what the tax regime is really going to look like going forward as I can't be sure my disposable income now will be the same in 24 months time.

A pity about the flakey assumed growth - without that AD might otherwise have had to be a bit more honest about how all this would be paid for down the line - then people could have had a little more faith that they were making half decent "big" life decisions.

If any one knows George Osborne can you please ask him to let slip what he sees basic rate tax being over the next 5 years - I can then plan around that and get back to sleeping a little more easily than of late!
Treasury wants to cut pensions tax break 4:23pm on 20 Apr 2009 # 63 I am afraid your simplifying measures would result in a large hole in the government's finances.

Higher rate of 40% kicks in at taxable income of £34,800, employee NIC at 11% is charged up to £40,040, and at 1% thereafter and employer's NIC is payable at 12.8% on all of this.

So, if you abolish NIC, and replace it with 25% and 45% tax bands, you will reduce effective tax rates from 43.8% to 25% for those earning up to £34,800, from 63.8% to 25% for the incremental earnings between £34,801 to £40,040 and from 53.8% to 45% for the incremental earnings over £40,040.

Yep, we do all pay that much tax already!!! And yep, the incremental rate for those earning between £35k and £40k is eyewatering!!!

I suppose if NIC was done away with and it was all called income tax, more people would at least appreciate the income taxes burden we are all already paying. No chance of that then.

I can sympathise though that it may seem odd that incremental rates for higher rate taxpayers is 53.8% whilst the incremental rate for those earning below £35,000 is only 10% lower at 43.8%.
Treasury wants to cut pensions tax break 12:46pm on 20 Apr 2009 Excellent point youhave5fingers at #33 - very well made too.

Another excellent point Andyicta at #30.

Let's not lose sight that pension contributions will be taxed when received as pension (save for the limited proportion allowed for a tax free lump sum). Hence, if I pay tax now at 20% on my higher earnings pension contributions and then again conceivably at 40% in the future on my pension, that's around a 55% effective tax rate, so why would I bother saving beyond a certain point?

That said, I don't understand why anyone would opt to pay into a personal pension scheme if the tax relief is only 20%. Whilst you save 20% tax on the contribution you will end up paying that tax rate when you draw it as income at a future point in time. All you will have achieved is tieing up your money for a very long period, possibly with never getting to utilisie it and along the way you will have paid some nasty fees and commissions, as well as more than likely have achieved a pretty poor return.

Naive to think that the whole point should be to encourage all tax payers to save for their retirement - otherwise we might as well all aim to throw ourselves at the mercy of the state system.

As for doing away with the public sector final salary schemes - yes I agree with those posting above that it is very unfair. And I thought it unfair when my former private sector employer pulled its final salary scheme 8 years ago too!

There's a lot going on right now that isn't fair - but hey, life's not fair! It will ulitmatly also be unfair that my children and just about everyone else's will in future years pay the price for those accruing public sector fixed salary pensions. At the very least the schemes should be closed to new members - it will then be for prospective public sector workers to make a choice between the state sector or the alleged "lucrative" private sector! Given the economic position - NOW is the time to close the schemes to new entrants!

All that said, this is academic as GB will never touch the public sector final salary schemes whilst he still deludes himself that he might have a sniff of retaining power.
That bloomin' pension again 4:47pm on 03 Apr 2009 C'mon Robert move on. As referred to above by Fingerbob69, how about something on the US easing up on "mark to market", surely this is more important, or don't you have a source on this?

Good of Citigroup to say the change will have no impact on their reported figures - what are the odds on better than expected quarterly figures coming from them then?

Also well said Graham Ward at 14, positive thinking, that's good to see. Hope things work out well on your various fronts.
Should the Bank of England buy shares? 8:08pm on 12 Mar 2009 Other things they could usefully do..

Establish a scheme to provide grants of up to 33% of the cost of undertaking significant home improvements, e.g. loft, cellar conversions, extensions etc in the next two years.

It would triple the impact of the governments initial spending, would keep craftsmen & builders in work, would help add equity value to properties and actually, when you consider the VAT, paye, NIC and corporation tax generated, probably wouldn't cost the government a bean!

Even better from GB's point of view, it would garner votes among middle class swing voters.

Better than blowing £15bn on a VAT reduction, 40 - 50% of the benefit of which was immediatley exported.

Come on George, I am doing your job for you!
The Goodwin pension questions 5:37pm on 26 Feb 2009 The more that comes out about this, the more clear it appears that the powers that be have not just been naive, they have been inept..... yet again!

I run a business with significant sums on deposit with NatWest. I am very inclined to move our deposits elsewhere - but recognising my social conscience I suppose this wouldn't help those left to pick up the pieces.

Hmm... perhaps I am now being naive!!!
Taxpayers' short-term loans to business 3:18pm on 13 Jan 2009 # 14 & 28 Couldn't agree more.

"Finally, the Business Department is making available a few tens of millions of pounds of equity capital to help the survival of strategically important small businesses that foolishly borrowed too much during the years of the debt bubble."

I run a small business, have cash in the bank and always have had. No not prudent, just sensible. What is the rationale for bailing out those who "foolishly" borrowed. Be interested to see how competent UK govt is at spotting those worth saving. Presumably those "politically" worth saving.

A further point, "strategically important" implies that there is some sort of strategy at work here. To suggest that is the case is laughable.

Finally, how ironic that 12 months ago the govt saw fit to increase taxes for small companies, whilst cutting it for large corporates. It's not going to be the large global businesses that generate a recovery in the UK, it will be small businesses and start ups. How about some joined up, medium term (never mind long term) strategic thinking for once from the govt - how about introducing in the next budget measures to encourage entrepreneurial spirit. Or perhaps that simply doesn't fit in with Gordon Clown's personal agenda over the next 12 months.

I expect more tinkering, and more stubborn lecturing to come from the govt.
Why punish savers? 09:15am on 04 Dec 2008 Never mind not passing on the cut in rates in full to borrowers. The banks' are abusing depositors too.

I run a small business that regularly has signifciant sums on deposit with NatWest (RBS). Following last month's 1.5% cut in base rates, our deposit rate went from 4.99% to 2.44%.

Try explaining that one to me.
End of Thatcher's tax incentives 6:07pm on 24 Nov 2008 Let's not kid ourselves, the government is taking the economic opportunity to justify policies that will shore up the core labour vote at the next (June?) election.

A pity, because if ever the time was right to tackle the public sector pension timebomb, surely now is the time!

If the wealthy have to bear their share of the burden - surely the public sector can too?

As a small business owner and employer, I would hope the media recognise that the combined 1% increas in national insurance is effectively a 1% inrease in tax for all employees earning above the minimum NIC threshold!

As a VAT registered business, the reduction in VAT is pointless. Not only does the timing issue guarantee future difficulties, but it will make no difference whatsoever. It would have been more sensible (and politically savvy for labour) for the govt to target tax breaks to the less well off and pensioners!

As for the timing and projected rate of recovery - looks like they plucked out of thin air whatever figure they needed to balance the equation!
Stamp phobia 10:13am on 08 Aug 2008 Shivering jim jam post# 51, not sure maths is your strong point.

You mentioned paying rent is a waste of money when you could be paying towards capital.

Have you ever seen a repayment mortgage schedule? The capital repayment is loaded towards the end of the mortgage, in the early years only a small element goes towards capital repayment, perhaps 1% a year if that at the outset.

In any event, as I understand it, in recent years it has almost become the norm for buyers to take out an interest only mortgage, so there is no repayment at all! No doubt the prevalence of this practice will have added a further small percent uplift to prices over the years.

I am currently renting and my own personal view is that unless you can secure a 20-25% reduction on an advertised price now, you would be foolish to buy just now. Particularly when, as another comment put it above, you can get 6% on cash in the bank.

So when is the time to buy?

I worked at Barclays centralised mortgage lending business back in the early 1990's (the good old days when we were selling fixed rate money at 13.75%!), as I recall then, prices fell for 2 years and then spluttered for another 2 after that. Given that experience and my own personal circumstances, I figure it might be sensible to defer entering the market again until the end of 2009 - at the earliest. Why waste money otherwise?

However, for those forced to buy in the short term - assuming there is such a thing! - why would you buy before the October PBR? You would clearly be risking wasting the value of your stamp duty.

Furthermore, given the calibre of Caroline Flint's responses on Newsnight last night - more of an aimless, angry rant - it is clear that HMG is all at sea and not thinking rationally at this point. My prediction, expect some idiotic meddling in October. It won't be sensible nor in anyone's long term interests, but for buyers may nevertheless be worth wating for.

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