1 00:00:00,000 --> 00:00:14,800 So, with Labour winning, how can we protect ourselves against the tax grab? 2 00:00:14,800 --> 00:00:24,800 Or more importantly, the shifting of the illusion of not raising tax, but you have. 3 00:00:24,800 --> 00:00:33,800 Now, Keir Starmer has announced that wealth creation is the number one priority in the labour market, 4 00:00:33,800 --> 00:00:39,300 as part of their manifesto. 5 00:00:39,300 --> 00:00:47,300 He has also pledged to not raise the trio of the major taxes. 6 00:00:47,300 --> 00:01:06,300 And has also said that the Tory statement that they're gonna raise taxes by £2,000 for each working household is wrong. 7 00:01:06,300 --> 00:01:27,300 But the issue is that they need to get money from somewhere because they can't actually get receipts from a standing start. 8 00:01:27,300 --> 00:01:40,800 So, what we're looking at as part of their manifesto, which would cause problems to a number of different individuals. 9 00:01:40,800 --> 00:01:46,800 So, they're scrapping tax breaks on private schools. 10 00:01:46,800 --> 00:02:09,800 Now, the problem with this is that historically, any tax regime related to children, i.e. kids' clothes, certain foods, kids' education. 11 00:02:09,800 --> 00:02:18,800 So, if you buy a product specifically for children, then it would be VAT exam. 12 00:02:18,800 --> 00:02:26,300 So, it might be difficult to actually push this through Parliament. 13 00:02:26,300 --> 00:02:45,800 And that would also, if it was, put into question the loading up of VAT at any amount for children's clothing and other education. 14 00:02:45,800 --> 00:02:55,300 The other issue is that they want to raise stamp duty for non-UK residents by 1%. 15 00:02:55,300 --> 00:03:11,800 Now, this tinkering may lead to a number of these individuals leaving the UK's shores, 16 00:03:11,800 --> 00:03:20,300 potentially together with those particular jobs related to them. 17 00:03:20,300 --> 00:03:35,800 Because, if you're here in that sort of, as a non-resident, you probably have a reasonable amount of wealth. 18 00:03:35,800 --> 00:03:42,800 And this also goes with the other thing they want to do is to abolish the non-dom status. 19 00:03:42,800 --> 00:03:51,300 The issue with this is that there are lots of different locations. 20 00:03:51,300 --> 00:04:03,800 Now, with communications almost around the world, you can build a factory within a very short period of time, 21 00:04:03,800 --> 00:04:10,800 and you can manufacture abroad and get it shipped into the UK. 22 00:04:10,800 --> 00:04:16,300 So, there is that issue. 23 00:04:16,300 --> 00:04:24,800 The other issue is that we're potentially going to have a labour pension review. 24 00:04:24,800 --> 00:04:38,800 So, either partial tax relief will be tinkered with, and the end of the use of offshore trusts to avoid heritage and stacks. 25 00:04:38,800 --> 00:04:54,800 Also, there's more tinkering with stopping people buying a farm so that they can avoid capital gains tax and inheritance tax, 26 00:04:54,800 --> 00:05:00,800 which could come into question if this is right across the board, 27 00:05:00,800 --> 00:05:10,800 that traditional farmers are going to fill the brunt and this is going to stoke inflation. 28 00:05:10,800 --> 00:05:21,800 Another thing that labour want to increase is, or re-evaluate, is the council tax. 29 00:05:21,800 --> 00:05:32,800 Now, council tax is a bandit tax for evaluation of property that happened quite a long time ago. 30 00:05:32,800 --> 00:05:42,800 Now, a lot of people during the pandemic had the time and the money to get extensions, improve their property, and etc. 31 00:05:42,800 --> 00:05:52,800 So, the initial evaluation was quite rushed a lot of time. 32 00:05:52,800 --> 00:06:00,800 It wasn't actually people walking down roads and having sort of good calculations. 33 00:06:00,800 --> 00:06:15,800 It was people in a car, in cars, driving up and down, sort of making rushed calculations of what a property would cost. 34 00:06:15,800 --> 00:06:27,800 And the problem with this is that people on a smaller footage, or it looked like the same square footage, 35 00:06:27,800 --> 00:06:33,800 but smaller rooms had been tarred with having the same band. 36 00:06:33,800 --> 00:06:40,800 So, a lot of people have actually contested the band and a lot of people have won. 37 00:06:40,800 --> 00:06:46,800 So, the issue is that that rebanding could happen. 38 00:06:46,800 --> 00:06:52,800 People normally will be paying more rather than less. 39 00:06:52,800 --> 00:07:00,800 And there's that lack of, is that really a tax? 40 00:07:00,800 --> 00:07:10,800 So, the thing is that we're not raising taxes, we're actually tinkering with the level of tax, 41 00:07:10,800 --> 00:07:14,800 because it's not being properly calculated in their minds. 42 00:07:14,800 --> 00:07:24,800 And also, the actual level of tax banding not actually being increased due to inflation. 43 00:07:24,800 --> 00:07:35,800 So, I reiterate the big three tax pledges were, voting not to raise income tax, national insurance or VAT. 44 00:07:35,800 --> 00:07:51,800 But they may not raise VAT at 20%, but they may introduce certain elements which are VAT free 45 00:07:51,800 --> 00:07:59,800 and have the rate all the way from 5% and maybe pick the 20%. 46 00:07:59,800 --> 00:08:08,800 The other issue is that there's a lot of speculation with tinkering with capital gains tax. 47 00:08:08,800 --> 00:08:25,800 So, and this has led to a number of people to actually crystallize their investment portfolio 48 00:08:25,800 --> 00:08:36,800 or making very big changes to their pension strategy before the election. 49 00:08:36,800 --> 00:08:46,800 So, the options could be for your pension is that you're going to have to pay more in. 50 00:08:46,800 --> 00:09:01,800 So, Bella, so the laborers have unsurprisingly pledged to uphold the state pension triple lock, 51 00:09:01,800 --> 00:09:06,800 but there's no mention of bringing back the pension lifetime allowance, 52 00:09:06,800 --> 00:09:11,800 meaning savers with large pension pots can hopefully breathe a sigh of relief 53 00:09:11,800 --> 00:09:17,800 that they won't be clobbered with the tax charge of up to 55% for withdrawing cash from their pensions. 54 00:09:17,800 --> 00:09:25,800 I mean, it's the whole thing. You work, you spend your money, 55 00:09:25,800 --> 00:09:36,800 because I mean, it's costing a lot more and then you get the money taken off you 56 00:09:36,800 --> 00:09:45,800 to pay for the people who either don't want to work, don't have the skills or can't work. 57 00:09:45,800 --> 00:09:58,800 So, the other thing is that there's probably going to be some sort of smoke and mirrors as there usually is. 58 00:09:58,800 --> 00:10:07,800 So, it's probably best until the labor come up with their autumn statement 59 00:10:07,800 --> 00:10:13,800 because they're probably going to have to spend a lot of time analysing the funds, 60 00:10:13,800 --> 00:10:18,800 having a fully costed budget, as they keep on saying. 61 00:10:18,800 --> 00:10:29,800 And I don't think any of the actual things that they want to do, 62 00:10:29,800 --> 00:10:35,800 they haven't thought about the actual issues. 63 00:10:35,800 --> 00:10:42,800 If you have a couple of children at private school, 64 00:10:42,800 --> 00:10:52,800 you've got the camp where you've got too much money, either inherited or you're sort of a CEO, 65 00:10:52,800 --> 00:11:06,800 having another 40% increase to the cost of private child education is not going to worry you. 66 00:11:06,800 --> 00:11:14,800 But there's going to be a lot of people where they actually do not have holidays, 67 00:11:14,800 --> 00:11:27,800 they restrict a lot, they do not go out to the pubs and restaurants and so forth. 68 00:11:27,800 --> 00:11:38,800 All the years that their kids are in education or they carry on as normal and then 10 years after their children have finished school, 69 00:11:38,800 --> 00:11:41,800 they're still paying that particular debt. 70 00:11:41,800 --> 00:11:51,800 So, I've been talking to a number of people and in some schools, I haven't done the calculation, 71 00:11:51,800 --> 00:11:57,800 I hope somebody will, you have two years taught in one classroom. 72 00:11:57,800 --> 00:12:09,800 So, even if you have a reasonable proportion, say 20%, maybe up to 25%, 73 00:12:09,800 --> 00:12:23,800 the actual tax take won't increase because you're going to have to employ other teachers to actually teach these children 74 00:12:23,800 --> 00:12:29,800 who are going from private education to public education, 75 00:12:29,800 --> 00:12:33,800 you know, all the building of the classrooms and so forth. 76 00:12:33,800 --> 00:12:44,800 It isn't just one teacher, you've got a teaching assistant and you've got the actual cost on top 77 00:12:44,800 --> 00:12:52,800 because these teachers don't just get their basic salary, 78 00:12:52,800 --> 00:13:00,800 they get a pension which is a defined benefit pension. 79 00:13:00,800 --> 00:13:14,800 So, it's rated on how much they earn but you're either going to get something around 27% or up to 30% 80 00:13:14,800 --> 00:13:21,800 going into their defined benefit pension so you've got to wrap that up in the cost. 81 00:13:21,800 --> 00:13:31,800 The other thing to protect yourself is probably to actually put money into ICES, LICES, etc. 82 00:13:31,800 --> 00:13:37,800 because we don't know whether the bandings will change, that there'll be, 83 00:13:37,800 --> 00:13:45,800 the limitation will be a lot less, I mean currently it's for an ICES or it's 20,000 84 00:13:45,800 --> 00:13:54,800 you'll have to do your research on other particular products but it sort of makes sense that 85 00:13:54,800 --> 00:14:04,800 there is some sort of tinkering so that monies can actually be pulled out anywhere else, 86 00:14:04,800 --> 00:14:14,800 they may change the amount of savings you can have before you are taxed 87 00:14:14,800 --> 00:14:22,800 and if you can to shelter your investments now in regard to capital against tax. 88 00:14:22,800 --> 00:14:33,800 As I said the labour manifesto pledged to not raise four taxes, income tax, national insurance, VAT and corporation tax. 89 00:14:33,800 --> 00:14:40,800 I mean Starma said, I don't believe it's fair to raise taxes on working people. 90 00:14:40,800 --> 00:14:51,800 Now the problem is, it's the definition of working people, it's later seemed to be established 91 00:14:51,800 --> 00:15:04,800 and I suppose this hasn't been agreed by Starma that a working person is somebody who doesn't have 92 00:15:04,800 --> 00:15:20,800 more than sort of 1500 sterling in their make account which would probably class the majority of people 93 00:15:20,800 --> 00:15:28,800 if they manage their money correctly would not affect a really working class. 94 00:15:28,800 --> 00:15:37,800 So the other thing that was stated, we're pro-business well to a certain extent 95 00:15:37,800 --> 00:15:50,800 because a lot of business people on the larger side are probably floating between being a non-dom 96 00:15:50,800 --> 00:16:00,800 at the moment and maybe being forced to move away from a non-dom. 97 00:16:00,800 --> 00:16:08,800 So he also stated we are pro-business and pro-worker. 98 00:16:08,800 --> 00:16:16,800 The party of wealth creation, the party promises to cap corporation tax at the current level of 25%, 99 00:16:16,800 --> 00:16:20,800 the lowest in the G7 for the entire parliament. 100 00:16:20,800 --> 00:16:32,800 Well, I don't know if they're going to do any particular tax changes like in Ireland specifically for the arts 101 00:16:32,800 --> 00:16:40,800 which is incredibly low and maybe they ought to just pick something really exciting out of the bag 102 00:16:40,800 --> 00:16:51,800 which will bring more employment for those sort of smaller companies. 103 00:16:51,800 --> 00:16:59,800 So we moved down, Labour also pledged to not increase the basic higher or additional rates of income tax. 104 00:16:59,800 --> 00:17:10,800 So they're going to either they've said well the actual rates of tax are going to stay the same 105 00:17:10,800 --> 00:17:19,800 but they're going to play with the ceiling amount before you actually get into the next band. 106 00:17:19,800 --> 00:17:28,800 So they're not raising taxes but they're raising the actual entry to where it is. 107 00:17:28,800 --> 00:17:40,800 There's not really a great deal of confirmation about capital gains tax in the Labour manifesto 108 00:17:40,800 --> 00:17:48,800 which is a major concern amongst entrepreneurs in the U.K. 109 00:17:48,800 --> 00:18:01,800 So you could face a capital gains tax if you're a higher rate taxpayer on our own channel 110 00:18:01,800 --> 00:18:08,800 or your investments crystallize or other chargeable assets. 111 00:18:08,800 --> 00:18:15,800 I mean they have already seen their annual exempt allowance slashed by the current Conservative Government 112 00:18:15,800 --> 00:18:22,800 for 3,000 a year from memory service from 10,000 a year. 113 00:18:22,800 --> 00:18:31,800 I mean we've talked about that, I'd reiterate it's probably never been more important to maximize your 20,000 114 00:18:31,800 --> 00:18:46,800 allowance for I'm not sure why people utilize it for gaining interest unless they're at a reasonable age 115 00:18:46,800 --> 00:18:54,800 but it's much better to actually utilize this all for stocks and shares if you have a balanced portfolio. 116 00:18:54,800 --> 00:19:04,800 Other more complex options include deferring gains by investing in enterprise investment schemes, EIS 117 00:19:04,800 --> 00:19:14,800 but of course these carry significant risk but if you're a high net earner 118 00:19:14,800 --> 00:19:21,800 you can offset sort of quite a substantial amount of this. 119 00:19:21,800 --> 00:19:28,800 For inheritance tax you probably need to start planning to avoid a future liability 120 00:19:28,800 --> 00:19:35,800 and where the Labour increases the rate of inheritance tax which is an eye-watering 40% 121 00:19:35,800 --> 00:19:45,800 or reduce the nil ban rate which is 325,000 over the course of the next parliament is not really clear 122 00:19:45,800 --> 00:19:57,800 but the major other thing to look at is whether gifts to spouses or civil partners 123 00:19:57,800 --> 00:20:05,800 which are currently completely free of entire inheritance tax and each tax year you can give away 3,000 124 00:20:05,800 --> 00:20:13,800 pounds worth of gifts with your annual exemption this means couples can give away 6,000 a year. 125 00:20:13,800 --> 00:20:19,800 In addition there is no limit on excess income above expenditure that can be gifted. 126 00:20:19,800 --> 00:20:30,800 We do not know whether this will be changed but any gifts will be clear of inheritance tax 127 00:20:30,800 --> 00:20:35,800 if they fulfill the 7 year rule. 128 00:20:35,800 --> 00:20:39,800 Now the major thing is school fees. 129 00:20:39,800 --> 00:20:55,800 Now if you tax fees on education this is the short end of the wedge when what else are you going to tax? 130 00:20:55,800 --> 00:21:08,800 Now I've been doing a little research so if you teach a student on a one-to-one 131 00:21:08,800 --> 00:21:16,800 that particular activity is zero rate rated. 132 00:21:16,800 --> 00:21:25,800 So the whole thing is that we've got zero rating on education as it currently stands. 133 00:21:25,800 --> 00:21:31,800 You've got zero rating on books and you've got zero rating on clothes. 134 00:21:31,800 --> 00:21:44,800 I think the issue is that there's this muddle that a lot of private schools have said that they are charity. 135 00:21:44,800 --> 00:21:50,800 So I think you know at this moment irrespective of whether they are charity or not 136 00:21:50,800 --> 00:22:05,800 I think looking at the current rules and the principle that VAT isn't imposed on people under the age of 18 137 00:22:05,800 --> 00:22:16,800 will make it quite difficult for this to actually get through without the site that this could open the floodgates. 138 00:22:16,800 --> 00:22:27,800 So the manifesto says that labor will end the VAT exemption and business rates relief for private schools to invest in our state schools. 139 00:22:27,800 --> 00:22:36,800 The party expect to raise more than 1.5 million in 2028 to 2029 from the measure. 140 00:22:36,800 --> 00:22:58,800 Now I will see that they would probably need to actually budget for 0.75 billion to be utilized to accommodate those parents 141 00:22:58,800 --> 00:23:13,800 who can't afford or don't want to afford the private education and they would have to be taught by the local schools. 142 00:23:13,800 --> 00:23:18,800 So I think that that measure is a bit moot. 143 00:23:18,800 --> 00:23:25,800 But it's important for families to start planning for extra costs now. 144 00:23:25,800 --> 00:23:32,800 I mean I think paying early may not be an option. 145 00:23:32,800 --> 00:23:42,800 I think it will still be caught by the new rules or you may still want your children to have that education. 146 00:23:42,800 --> 00:23:59,800 You're just going to have to pay it longer after they actually finish school and then have the burden of being a higher earner and having no relief for your children. 147 00:23:59,800 --> 00:24:17,800 Which I think having a situation where your parents, how much they earn determines whether you get a grant or a sufficient grant to actually survive 148 00:24:17,800 --> 00:24:32,800 or whether you have to go and tap in hand to your parents and say well this is what the stake is about, can I have that exactly the same when you've got the cost of living crisis 149 00:24:32,800 --> 00:24:41,800 which would detract a number of sons and daughters from actually doing this. 150 00:24:41,800 --> 00:25:02,800 I think that there are too many parents that are right on the cusp and I think that a number of things that Labour will do will actually stoke inflation. 151 00:25:02,800 --> 00:25:11,800 So it's going to be harder and harder to have the funds to send children to private school. 152 00:25:11,800 --> 00:25:19,800 But most will be reluctant to put their child out of the school, disrupting friendships and if key exams are on the horizon. 153 00:25:19,800 --> 00:25:22,800 But it's vital to face up to the challenge and make a plan. 154 00:25:22,800 --> 00:25:39,800 But the problem is that a lot of these schools have ecrotricular activities which are incredibly expensive and they also have the ethos of going on holiday more. 155 00:25:39,800 --> 00:25:54,800 So you don't want your child to be out of face when you can't afford to pay for the private fees as well as holidays, although these are relevant activities. 156 00:25:54,800 --> 00:26:01,800 So many private schools offer pay and advance schemes, enabling parents to pay for a few years up front if they have them. 157 00:26:01,800 --> 00:26:10,800 I'm not entirely sure that many parents would have that. They would have to take out a loan which is reasonably expensive. 158 00:26:10,800 --> 00:26:33,800 But the other thing, I would see that any activity that tries to avoid this particular tax or removal of charity status would be investigated. 159 00:26:33,800 --> 00:26:40,800 So I think you need to take legal advice if you're going to do that. 160 00:26:40,800 --> 00:26:49,800 I mean, it says here that potentially on my notes this could also allow them to avoid the future imposition of VAT. 161 00:26:49,800 --> 00:26:56,800 However, there is a risk of labour government could amend the legislation surrounding VAT. 162 00:26:56,800 --> 00:27:03,800 So it becomes liable when a service is delivered rather than invoiced. 163 00:27:03,800 --> 00:27:18,800 Now, I think that this is very difficult because this would also potentially change the bonding laws. 164 00:27:18,800 --> 00:27:33,800 So the bonding laws is that you pay VAT on the purchases of things that go into bond like alcohol, whiskey, etc. 165 00:27:33,800 --> 00:27:44,800 And then when you actually take out the product for consumption or if you resell, then you've already paid the relevant VAT. 166 00:27:44,800 --> 00:28:09,800 I mean, there is a benefit in paying in advance because you potentially might get a discount and you are paying at, well, potentially in the current rate without inflation being imposed. 167 00:28:09,800 --> 00:28:20,800 But it will be prudent to prepare for this financial hit in other ways by making economies elsewhere if necessary. 168 00:28:20,800 --> 00:28:37,800 I mean, it's pretty drastic if you downsize your own, but you might need to sort of be very choic-y about your shopping habits, your entertainment habits. 169 00:28:37,800 --> 00:28:53,800 And you may have to avoid holidays for paying a portion of this increase in tuition. 170 00:28:53,800 --> 00:29:03,800 Lifetime gifts to help cover school fees can help reduce an eventual inheritance tax bill on an estate. 171 00:29:03,800 --> 00:29:08,800 So this could be an option to consider for wealthier grandparents. 172 00:29:08,800 --> 00:29:11,800 So with sufficient assets to gift. 173 00:29:11,800 --> 00:29:29,800 So if you've got grandparents to actually gift, but it's always mindful that the government don't see it as a gift if it puts your financial security into jeopardy. 174 00:29:29,800 --> 00:29:58,800 So I would advise everybody in the UK to have a look at their finances, to actually look at every element of investments that they have, to actually plug the allowances as soon as, as much as you can without any financial aid. 175 00:29:58,800 --> 00:30:06,800 And without being a detrimental with the emergency funds, etc. 176 00:30:06,800 --> 00:30:15,800 So thank you very much for listening to my, my rant. 177 00:30:15,800 --> 00:30:30,800 If you could please share this video with others, if you could subscribe to my channel and I'll see you on my next video. 178 00:30:30,800 --> 00:30:46,800 Thank you very much for your time and have a good one.