Painful Labour Tax Rises in October

so today is August the 28th and we're already being prepared for what the budget is going to look like in October today K St has been speaking and he's come out and he's outrightly said that he's going to be asking more of us in the Autumn statement now we've been covering this a little bit on the channel for some time now in terms of we're in a predicament at the moment from an economic point of view we've got a 22 million pound uh black hole which we need to fill um the economy is well it's imp positive right now but the economy hasn't been performing and it feels like everything's just broken at this point in time so with a new labor government in it's a it's a new beginning it's a change of the Guard if you will right trying to repair the damage that had been done by previous administrations and previous governments right now we've been covering the fact that with all the work that needs to be done and the challenges that we're facing the government is going to have to raise taxes and probably going to have to incur or introduce spending cups both of which are very uncomfortable conversations to be had because we've been here with authorities when the Tories took over from the labor party back in 2010 so it feels like 14 years on we're still in the same position we're hearing the same old things they're blaming it on the previous government and they're also being very very bold and forthright in saying well look it's is it's it's worse than we thought it was going to be and we're going to have to make tough decisions and that was the language being used by Karma today but here's the big question and one that we've been asking on this channel if they are going to ruce tax rides and spending cuts and I'm talking specifically about tax Riders here how are they going to raise the money that they need without touching income tax and na Insurance contributions that was clearly in the labor Manifesto that that was something that he wasn't going to do so it doesn't raise taxes on everyday working people now if you've been following we've covered in the fact that the ifs which is the institute for fiscal studies when they look at government spending they tell us that income tax and naal insurance contributions forms about 42% of the government's overall tax revenue The Lion Share of the government's tax revenue when you lump on vat to that it's about 52 54% roughly all the other taxes form remaining part of that high right but income tax na Insurance are the largest parts of it now in addition to tax Rises there will be spending cuts and this is something that um was asked of the Prime Minister today and this was uh his uh response uh that he gave in um down street okay so he was asked specifically about tax cuts so a journalist from the times asked if spending cuts were being looked at starm said he won't preempt the chancellor in relation to the October budget and he goes on to say he says I frankly you don't want to take the tough decisions we're going to have to take I frankly don't want to take the tough decisions we are going to have to take which really just Paints the picture that there are going to be some kind of spending cuts in some way shape or form the question is where and how because you need to you need to introduce efficiencies into a government that has a black hole it's spending more than it basically than than it than it has and what it's generating right now if you look at some of the figures over the last day or so you know we borrowed we've already spent more than we bought in so far this year and that's backdated reporting so there needs to be some in some cuts and some efficiencies introduced in some way shape or form but how we don't know now back on the tax cuts he was also asked today or at least he gave a hint today of where the tax cuts or tax Rises I should say not tax cuts tax Rises are going to come from this is what he said he described the budget that's coming in October as painful and especially for those with the broadest shoulders and that's the biggest clue so far about where there might be tax risers So based on that and this is guess work at the moment what might we deduce as being the areas where there will be tax Rises if he's putting it on those with the broadest shoulders so in hariton tax we've heard or it's been posited there's likely going to be an increase in the inheritance tax rate some people are saying 54 54.4% I think that's pretty large from 40% 54.4% it's not going to go down well at all I mean some Circles of society will will cheer it on and if you are on that side of society please let me know in the comment section whether you are within inheritance as as well there may be a reduction to the allowances to the N rate band and the residence n rate band we know what's going to happen there but that's likely going to be something that is going to be targeted they're likely going to Target capital gains tax they might equalize the capital gains rate with uh income rates tax specials that is 20% 40% 60% they might do that they might reduce capital gains allowance as well I don't know whether they'll do anything with dividend tax I mean dividend allowances have already been slashed quite significantly but they may do something with the tax um levels um and again that's not going to go down done that well with business owners or those who run the risk of building their own businesses there's a lot of risk in running your own business you can't you know there's not a lot of financial stability when you run your own business I run my own business and yes I have a little bit of financial stability that's because I practice what I preach in my book and everything I talk about here on the channel but being able to take the risk of building the business and join the business in a tax efficient manner that's always been something that has been a benefit for people who take that risk of building a business if they change that that's likely going to go down really poorly um because it means that you're going to take all of that risk and have to pay even more tax at the back end um so that's going to be interesting to see what happens there um again income tax Nation Insurance contributions probably be left alone I mean at least he said it today that he has no intention or at least he wants to keep to the manifesto problem to promise problem problem promise he wants to keep to the manifesto promise how he does that though I don't know and if he does kudos to him it really kudos to him but I just don't know other things that they might increase vat now the problem with vat is vat is a tax on product and services right so if they increase vat all that's going to happen is it was going to be passed over to you the consumer because you ultimat ultimately pay so if it goes from 20 to 25% for example well you're going to pay it more you're going to pay more of that or at least all of that additional cost uh council tax again indirectly you're going to pay for it and that's going to be really interesting to see business rates likely is going to get passed on in some way shape or form to Consumers consumers always pay at the end of the day so it's going to be very very interesting to see what they do in October and the kind of the things that they actually announce in October this is all guess work at this stage but I want to end this video in just maybe stating the obvious here okay look this week the energy price cap went up what so for the average household now ,700 a year for the average household we thought we see we'd seen the end of this but apparently not and in the midst of all of this they've taken unpopular decisions in cutting the winter fuel tax for pensioners now on that if you know anyone you have family friends relatives whoever who are pensioners right now who have lost the winter fuel payment there are 880,000 pensioners right now that are not claiming pensions credit they need to claim pensions credit it's it takes about 5 10 minutes I'm going to put a link in the description down below get someone to do it for them because they may not know how to do it themselves check if they're legible if they are at least they get back their winter fuel payment now that's going to make a huge difference to a lot of people and I really think that if they are willing to they are willing to make that kind of difficult decision I don't think them saying well you know what we are going to have to increase income tax and insurance contribution as being a far stretched idea I think they will do it if they have to I think it would be an unpopular one to let out of the bag early and so it's all going to be about t to hooks waiting for the statement in October the second thing I want to talk about just in closing this is look now more than ever it's really important to have the money Basics locked down and I say the money Basics because it's upon my book The Money Basics how to become your own Financial hero having those principles locked down strong financial management if you can paying down debt and avoiding debt because debt is a drain on your income I practice everything that I preach and everything that I wrote about in that book is what has got me to have a little bit of Financial Security in my life right now or I have a little bit of choice avoiding debt and I know a lot of people will be looking at credit cards right now I mean this is where Financial companies and Banks do very very well in times like this when things are difficult because people we know one in four people have less than1 pound in savings we know that already so when you don't have1 pound in savings what happens you go over Jar's credit cards the banks make a killing because of the interest rates to that but it's a drain on your income so if you can avoid it and if you do have debt try and pay it down try and ensure that you're able to build some kind of financial buffer around you I know that there will be a portion of people watching this video be thinking well that would be nice Pete look it doesn't happen overnight it is a work in progress but the point is you have to start with the work to make the progress and I wouldn't be sat here today if I didn't have to do the work myself and the same applies for you you'll be amazed at how small things can add up over time and make a real real difference now is the time to really be tight on finances financial habits and everything you're doing from a financial point of view look if you have any questions feel free reach out to me I do coaching with people go and pick the go and pick up the book or you can go and listen to on an audio book but definitely look do something to better your situation it's not just my book you can go pick up any book but I'm talking about my book because I know what I put in it and I know that those principles have changed my life and in times like this we have to take charge it's all about not succumbing and just relinquishing to the fact that things are going to be difficult and so therefore you know you allow yourself to to surrender to debt to surrender to the things that you can't control when actually you do have some influence over them and I think that's really important right now it's so easy to be in a dark place and just think oh things just going to be so so so bad that people end up doing spending like we have influence we have control over these things and this is the stuff that now more than ever it matters we need to take charge we have to take charge hopefully my sincere hope is that we come out of this stronger than we went in because guess what times like this will always roll around we're going to have external factors that we cannot control have a huge impact on what we the decisions we have to make which is why I'm covering this stuff on the channel yes it's political but these political decisions are going to have a huge impact on our own personal finances so naturally what are the things that we can do to protect ourselves to make sure that we can learn lessons now and be better when we come out and prepared for what comes next let me know what you think of this entire thing in the comment section what taxes do you think they're going to raise if you think they're going to do spending cuts where do you think it needs to happen I know what people are going to say immigrants Ukraine I've I've heard all those before but hey put them in there anyway I love to hear your thoughts and hear your views on this but thank you so much for watching I'll catch you on the next one cheers