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B1370 - Finance Bill 2018 watch

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    B1370 - Finance Bill 2018, TSR Government


    Finance Bill 2018
    An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

    1. Income Tax
    (1) There shall be a Personal Allowance of £10,165.60.
    (2) The Working Rate, charged on additional earnings up to £9,834.40 above the Personal Allowance, shall be set at 15%.
    (3) The Basic Rate, charged on additional earnings up to £30,000 above the Working Rate, shall be set at 20%.
    (4) The Higher Rate, charged on additional earnings up to £90,000 above the Basic Rate, shall be set at 40%.
    (5) The Additional Rate, charged on any additional earnings above the Higher Rate, shall be set at 45%.

    2. Corporation Tax
    (1) The Corporation Tax Reform Bill 2016 is hereby repealed.
    (2) Corporation Tax shall be set at a flat rate of 19%.
    (3) Businesses due to pay under £10,000 in Corporation Tax shall be exempt.
    (4) Businesses due to pay between £10,000 and £50,000 in Corporation Tax shall be eligible to pay half of the flat rate.

    3. Value Added Tax
    (1) The Standard Rate shall be set at 17.5%.
    (2) Pubs shall be exempt from Value Added Tax.

    4. Pension Fund
    (1) The National Insurance (Primary Threshold Reform) Bill 2017 is hereby repealed.
    (2) National Insurance shall hereby be known as the Pension Fund.
    (3) There shall be a Personal Allowance of £10,165.60.
    (4) Category A, H and M contributions, charged on earnings up to £36,521.60 above the Personal Allowance, shall be set at 9%.
    (5) Category A, H and M contributions, charged on any additional earnings above £50,000, shall be set at 2%.

    5. Land Value Tax
    (1) The landowner shall pay an annual tax of 2.5% on the land value of their land which shall hereby be known as the Land Value Tax.
    (2) Council Tax and Council Tax Support are hereby repealed.
    (3) Revenue from Land Value Tax must be given to councils at a level equivalent to funding through Council Tax prior to the enactment of this bill.
    (4) The state shall be exempt from paying Land Value Tax.
    (5) A Land Value Commission shall come into force and shall have the responsibility to determine current and all subsequent land values in England, Wales, Scotland and Northern Ireland.
    (6) Where there are multiple property owners upon a single site, the Land Value Tax shall be charged in proportion to the property sizes upon that site.
    (7) Land values shall be re-evaluated every five years.

    6. Land Value Tax Allowance
    (1) To be eligible for Land Value Tax Allowance, the average income of working, adult occupants shall be a maximum of £20,000 a year on average.
    (2) The amount received shall depend on how much they pay in Land Value Tax, how many people are living in the property taxed and the household income.
    (3) No more than half of Land Value Tax levied on a property shall be reimbursed for households with an average income of £10,000 or less, unless an occupant is on Disability Allowance.
    (4) No more than one-third of Land Value Tax levied on a property shall be reimbursed for households with an average income of £10,001 to £15,000, unless an occupant is on Disability Allowance.
    (5) No more than one-quarter of Land Value Tax levied on a property shall be reimbursed for households with an average income of £15,001 to £20,000, unless an occupant is on Disability Allowance.
    (6) Households with an average income of £20,000 or more shall not be eligible for Land Value Tax Allowance under any circumstances.

    7. Inheritance Tax
    (1) Inheritance Tax is hereby repealed.

    8. Commencement, Short Title, Extent and Conditions
    (1) This bill may be cited as the Finance Act 2018.
    (2) This bill shall extend to the United Kingdom.
    (3) This bill shall come into force on April 1, 2019.

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    Notes

    This government believes we must send a message to the rest of the world that we are open. Many have called Brexit a cliff-edge, where we will descend into a national decline. We believe that will only be the case if the government adopts a similarly pessimistic stance. To this end, we will reform Corporation Tax by returning to a flat rate alongside tax relief for small businesses. Under the new system, businesses due to pay under £10,000 will be exempt from paying tax and businesses due to pay between £10,001 and £50,000 will be able to pay half the flat rate.

    Another measure to pursue a country where people’s work is rewarded more effectively is by reforming National Insurance into a Pension Fund. National Insurance has failed to fulfill its purpose, instead being used to raise taxes by stealth. The Pension Fund will be used solely for state pensions. To fund National Insurance’s replacement with a Pension Fund, the Personal Allowance for both will be set at £10,165.60.

    The aforementioned changes allow cuts to Income Tax for the working class to become feasible. Before the merge with National Insurance is accounted for, a Working Rate of 15% will be created for those earning up to £20,000 per year. The Basic Rate will cover those earning between £20,001 and £50,000 and the Higher Rate will cover those earning between £50,001 and £140,000.

    Moving on from the big three taxes, Value Added Tax has been addressed by this government as a cause for concern. Ultimately, it is a tax that undermines the progressive nature of Income Tax by hitting the poorest in society the hardest. To challenge this reality, pubs will be made exempt from Value Added Tax and the Standard Rate will be reduced from 20% to 17.5%.

    Land Value Tax was introduced and then repealed, but this government believes that - if implemented correctly - it is a considerably superior method of taxation than that which taxes income and revenue. With the aforementioned tax cuts, we believe it is the appropriate time to reintroduce Land Value Tax at a rate of 2.5% alongside a Land Value Tax Allowance. The money generated will be used to repeal Council Tax with council funding preserved at FY 2018/19 levels.

    This government announced its intent to pursue the abolition of Business Rates in the budget, but we have decided it would be appropriate to do so in a separate bill. The last change included in this bill is Inheritance Tax which is abolished, as it merely serves to harm the families of those who have spent their lives generating wealth to pass on to their relatives. This is a large set of changes and this government’s offer to the country, providing assistance to all sections of our society.

    Calculations

    Income Tax Changes: £11.6 billion
    Corporation Tax Changes: £5.2 billion
    Corporation Tax Exemptions: -£4.7 billion
    Value Added Tax Changes: -£18.1 billion
    Value Added Tax Exemptions: -£3.6 billion
    B1262 Repeal: -£5.5 billion
    Pension Fund: -£11.1 billion
    Land Value Tax: £85.2 billion (only including England)
    Land Value Tax Allowance: -£34.2 billion
    Council Tax: -£34 billion
    Inheritance Tax: -£5.4 billion

    Total cost: -£14.6 billion (before including Land Value Tax collected in Wales, Scotland and Northern Ireland)

    Sources

    [1] Autumn Budget 2017
    [2] Income Tax
    [3] Corporation Tax and Pension Fund
    [4] Corporation Tax Reform Bill 2016
    [5] Value Added Tax Exemptions
    [6] National Insurance (Primary Threshold Reform) Bill 2017
    [7] Jammy Duel’s Land Value Tax Costings
    [8] Land Value Tax Allowance


    Posted by SpeakerBot
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    Pleased to see Saunders amend the numbers here relative to the budget, and delighted to back this historic and groundbreaking tax reform that creates a freer economy for Britain.
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    This seems good. I do have one suggestion, however, and that is to exempt the NHS from paying VAT (which it does under the Value Added Tax Act 1994). The only purpose of it was to encourage outsourcing. I do not believe a service funded through taxes should have to, itself, pay certain taxes.
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    Mr Speaker

    Following on from the budget, I am glad my right honourable friend the Chancellor has so readily brought to the house a Finance Bill. I look forward to voting for this.
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    Corporation tax doesn’t make any sense actually, £52,631.57 of profit and you owe nothing, £52,631.58 and suddenly you owe the state £5000 so if you are close to the boarder you are incentivised to try and make less money, the same at the other boarder. This means that SME’s are encouraged not to grow because they would be financially worse off for it. This alone is reason to nay.
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    (Original post by Aph)
    Corporation tax doesn’t make any sense actually, £52,631.57 of profit and you owe nothing, £52,631.58 and suddenly you owe the state £5000 so if you are close to the boarder you are incentivised to try and make less money, the same at the other boarder. This means that SME’s are encouraged not to grow because they would be financially worse off for it. This alone is reason to nay.
    This would be a legitimate concern if the bar wasn't set as low as £50,000. With this encompassing the smallest businesses in the United Kingdom, those that will naturally be unlikely to grow will remain content with their small size, whereas those innovative enough to grow will still do so because of the opportunity cost involved.

    For example, if I owned a business in a market that was growing yet minor in size and it had the potential to become a large business, the border would be of little worry to me; I would not just stop to avoid tax, I would keep working to grow my business and make much more profit than would be taken away at the border.

    This issue is made even more minimal by the fact that businesses due to pay under £50,000 pay half the flat rate rather than being fully exempt, meaning the gap is a lot smaller than you mention in your reply. SMEs will grow because our economic plan will leave the country better off, with VAT reduced to increase aggregate demand and a separate bill to abolish Business Rates on the way.
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    (Original post by Saunders16)
    This would be a legitimate concern if the bar wasn't set as low as £50,000. With this encompassing the smallest businesses in the United Kingdom, those that will naturally be unlikely to grow will remain content with their small size, whereas those innovative enough to grow will still do so because of the opportunity cost involved.

    For example, if I owned a business in a market that was growing yet minor in size and it had the potential to become a large business, the border would be of little worry to me; I would not just stop to avoid tax, I would keep working to grow my business and make much more profit than would be taken away at the border.

    This issue is made even more minimal by the fact that businesses due to pay under £50,000 pay half the flat rate rather than being fully exempt, meaning the gap is a lot smaller than you mention in your reply. SMEs will grow because our economic plan will leave the country better off, with VAT reduced to increase aggregate demand and a separate bill to abolish Business Rates on the way.
    the gap is what I say in my reply because I took that into account. The top barrier is for businesses earning over £250,000 a year. That is a lot of PROFIT for a small business to make, most never get there.
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    Nay. I strongly oppose the budget and I obviously oppose the implementations of the budget.
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    (Original post by EDMacRae)
    This seems good. I do have one suggestion, however, and that is to exempt the NHS from paying VAT (which it does under the Value Added Tax Act 1994). The only purpose of it was to encourage outsourcing. I do not believe a service funded through taxes should have to, itself, pay certain taxes.
    Hi, I see you’ve stumbled across the Model House of Commons.
    Are you interested in getting involved with this game of politics?
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    (Original post by CountBrandenburg)
    Hi, I see you’ve stumbled across the Model House of Commons.
    Are you interested in getting involved with this game of politics?
    I must admit, I have been considering it. What sort of things does it entail?
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    (Original post by CoffeeAndPolitics)
    Nay. I strongly oppose the budget and I obviously oppose the implementations of the budget.
    I refer the House to my previous comments about how awful a Budget it is.
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    (Original post by EDMacRae)
    I must admit, I have been considering it. What sort of things does it entail?
    Nice! This is a place where we draft legislation and debate it, essentially play politics to put it simply. If you join a party you’ll be able to have input on legislation and perhaps become an mp at some point. We hold general elections every 6 months and we are currently 4 months into this term.

    https://www.thestudentroom.co.uk/sho....php?t=5299238
    If you’re interested make an application here, there’s links on this thread to help you decide which party is for you. Any other questions you can ask there.
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    (Original post by EDMacRae)
    I must admit, I have been considering it. What sort of things does it entail?
    Shouting at each other and telling members of other parties that they are wrong and stupid!

    It's essentially a debating forum formatted as a House of Commons, you can be as active as you want but, if you want to treat it as more than an ordinary debating forum, you can become an MP and get involved in internal party politics. You can join a party yourself by posting here. Feel free to ask any questions.
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    Mr Speaker,

    Does this Government plan on increasing SDLT rates for foreign buyers to prevent them from buying homes as investments and to keep housing affordable for the British people?
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    (Original post by Aph)
    the gap is what I say in my reply because I took that into account. The top barrier is for businesses earning over £250,000 a year. That is a lot of PROFIT for a small business to make, most never get there.
    What I will say is that, depending on cost, I will look at making the exemptions and tax relief on Corporation Tax more tapered so that this issue is minimised, although I simply dispute that it is that large of a problem in the first place and I could only foresee it harming businesses in a small percentage of cases. At the end of the day, if this is your only issue you would be able to vote for the bill; we both know you will never vote for the enactment of a centre-right budget.

    (Original post by CoffeeAndPolitics)
    Nay. I strongly oppose the budget and I obviously oppose the implementations of the budget.
    With regard to the taxation section which this bill attempts to put into law, your first issue was lowering VAT although, if I recall correctly, you had no issue with a minor decrease which is what this bill does. This is a tax cut for everyone, although VAT effects the poorest hardest so this will go a long way to helping people's living standards increase.

    You described a Land Value Tax of 5% as, and I quote, 'a bit too much'. We have halved it since that point, in addition to it being accompanied with an allowance to make sure it does not lower people's living standards and force anyone into poverty.

    You also outlined abolishing Council Tax as a concern, although this maintains council spending at current levels through a clause introduced in that section. You stated you wanted this to be low, although it is increasing constantly in real life.

    Another concern of yours was the changes to National Insurance; what is the issue with lowering the 12% rate to 9%? This lowers everybody's tax burden, but especially those closer to the poverty line. Surely, as a Conservative Party member, these are the kind of fiscally conservative changes that you should be happy to see?

    I hate to say it but I feel as if you are only opposing this so heavily for the sake of opposing it, this pursues minor changes that will improve our tax system and help the country face the challenge of Brexit in the coming years. Have you even read this and is there anything we could do to change your mind?
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    (Original post by Unown Uzer)
    Mr Speaker,

    Does this Government plan on increasing SDLT rates for foreign buyers to prevent them from buying homes as investments and to keep housing affordable for the British people?
    Mr Speaker,

    While this Finance Bill does not contain any changes to SDLT, it does include the introduction of the Land Value Tax, a tax that will go a long way to tackling the issue you have raised. This government is taking measures to ensure housing becomes more affordable for the British people and we are proud to do so.
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    (Original post by Saunders16)
    What I will say is that, depending on cost, I will look at making the exemptions and tax relief on Corporation Tax more tapered so that this issue is minimised, although I simply dispute that it is that large of a problem in the first place and I could only foresee it harming businesses in a small percentage of cases. At the end of the day, if this is your only issue you would be able to vote for the bill; we both know you will never vote for the enactment of a centre-right budget.



    With regard to the taxation section which this bill attempts to put into law, your first issue was lowering VAT although, if I recall correctly, you had no issue with a minor decrease which is what this bill does. This is a tax cut for everyone, although VAT effects the poorest hardest so this will go a long way to helping people's living standards increase.

    You described a Land Value Tax of 5% as, and I quote, 'a bit too much'. We have halved it since that point, in addition to it being accompanied with an allowance to make sure it does not lower people's living standards and force anyone into poverty.

    You also outlined abolishing Council Tax as a concern, although this maintains council spending at current levels through a clause introduced in that section. You stated you wanted this to be low, although it is increasing constantly in real life.

    Another concern of yours was the changes to National Insurance; what is the issue with lowering the 12% rate to 9%? This lowers everybody's tax burden, but especially those closer to the poverty line. Surely, as a Conservative Party member, these are the kind of fiscally conservative changes that you should be happy to see?

    I hate to say it but I feel as if you are only opposing this so heavily for the sake of opposing it, this pursues minor changes that will improve our tax system and help the country face the challenge of Brexit in the coming years. Have you even read this and is there anything we could do to change your mind?
    Mr Speaker, my right honourable friend is absolutely correct. CoffeeAndPolitics seems to be opposing this for no reason other then he is in opposition. I gently remind the (right?) honourable member that the job of the opposition is to scrutinise, not oppose, legislation. I hope that he rethinks his decision on this bill and decides to vote in favour of it.
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    This is premature and doesn't really solve a lot of the problems, in fact some parts are absurd, for instance the LVT allowance limit is always more than the income of the household, if ever the allowance cap is hit the household is literally unable to afford it and the LVT figures remain wrong because you've taken an out of date range and said "the minimum is correct" and beyond that a number of figures are inaccurate based on my modeling
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    The LVT allowance caluclation is even worse than the rest because it carries over all the flaws of the rest of the costing (no logic to the cohorts used and inaccurate populations) and apply to it a seemingly arbitrary average allowance.

    It is made even more absurd than the rest of the figures because it implies that there are 55m HOUSEHOLDS rather than just 55m workers
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    I should add to my previous statement.

    I have just noticed that there is no funding in 2018-19 and in future years to enable the country to celebrate Ed Balls Day on April 28th each year.
 
 
 
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