So, with Labour winning, how can we protect ourselves against the tax grab?
Or more importantly, the shifting of the illusion of not raising tax, but you have.
Now, Keir Starmer has announced that wealth creation is the number one priority in the labour market,
as part of their manifesto.
He has also pledged to not raise the trio of the major taxes.
And has also said that the Tory statement that they're gonna raise taxes by £2,000 for each working household is wrong.
But the issue is that they need to get money from somewhere because they can't actually get receipts from a standing start.
So, what we're looking at as part of their manifesto, which would cause problems to a number of different individuals.
So, they're scrapping tax breaks on private schools.
Now, the problem with this is that historically, any tax regime related to children, i.e. kids' clothes, certain foods, kids' education.
So, if you buy a product specifically for children, then it would be VAT exam.
So, it might be difficult to actually push this through Parliament.
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.
The other issue is that they want to raise stamp duty for non-UK residents by 1%.
Now, this tinkering may lead to a number of these individuals leaving the UK's shores,
potentially together with those particular jobs related to them.
Because, if you're here in that sort of, as a non-resident, you probably have a reasonable amount of wealth.
And this also goes with the other thing they want to do is to abolish the non-dom status.
The issue with this is that there are lots of different locations.
Now, with communications almost around the world, you can build a factory within a very short period of time,
and you can manufacture abroad and get it shipped into the UK.
So, there is that issue.
The other issue is that we're potentially going to have a labour pension review.
So, either partial tax relief will be tinkered with, and the end of the use of offshore trusts to avoid heritage and stacks.
Also, there's more tinkering with stopping people buying a farm so that they can avoid capital gains tax and inheritance tax,
which could come into question if this is right across the board,
that traditional farmers are going to fill the brunt and this is going to stoke inflation.
Another thing that labour want to increase is, or re-evaluate, is the council tax.
Now, council tax is a bandit tax for evaluation of property that happened quite a long time ago.
Now, a lot of people during the pandemic had the time and the money to get extensions, improve their property, and etc.
So, the initial evaluation was quite rushed a lot of time.
It wasn't actually people walking down roads and having sort of good calculations.
It was people in a car, in cars, driving up and down, sort of making rushed calculations of what a property would cost.
And the problem with this is that people on a smaller footage, or it looked like the same square footage,
but smaller rooms had been tarred with having the same band.
So, a lot of people have actually contested the band and a lot of people have won.
So, the issue is that that rebanding could happen.
People normally will be paying more rather than less.
And there's that lack of, is that really a tax?
So, the thing is that we're not raising taxes, we're actually tinkering with the level of tax,
because it's not being properly calculated in their minds.
And also, the actual level of tax banding not actually being increased due to inflation.
So, I reiterate the big three tax pledges were, voting not to raise income tax, national insurance or VAT.
But they may not raise VAT at 20%, but they may introduce certain elements which are VAT free
and have the rate all the way from 5% and maybe pick the 20%.
The other issue is that there's a lot of speculation with tinkering with capital gains tax.
So, and this has led to a number of people to actually crystallize their investment portfolio
or making very big changes to their pension strategy before the election.
So, the options could be for your pension is that you're going to have to pay more in.
So, Bella, so the laborers have unsurprisingly pledged to uphold the state pension triple lock,
but there's no mention of bringing back the pension lifetime allowance,
meaning savers with large pension pots can hopefully breathe a sigh of relief
that they won't be clobbered with the tax charge of up to 55% for withdrawing cash from their pensions.
I mean, it's the whole thing. You work, you spend your money,
because I mean, it's costing a lot more and then you get the money taken off you
to pay for the people who either don't want to work, don't have the skills or can't work.
So, the other thing is that there's probably going to be some sort of smoke and mirrors as there usually is.
So, it's probably best until the labor come up with their autumn statement
because they're probably going to have to spend a lot of time analysing the funds,
having a fully costed budget, as they keep on saying.
And I don't think any of the actual things that they want to do,
they haven't thought about the actual issues.
If you have a couple of children at private school,
you've got the camp where you've got too much money, either inherited or you're sort of a CEO,
having another 40% increase to the cost of private child education is not going to worry you.
But there's going to be a lot of people where they actually do not have holidays,
they restrict a lot, they do not go out to the pubs and restaurants and so forth.
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,
they're still paying that particular debt.
So, I've been talking to a number of people and in some schools, I haven't done the calculation,
I hope somebody will, you have two years taught in one classroom.
So, even if you have a reasonable proportion, say 20%, maybe up to 25%,
the actual tax take won't increase because you're going to have to employ other teachers to actually teach these children
who are going from private education to public education,
you know, all the building of the classrooms and so forth.
It isn't just one teacher, you've got a teaching assistant and you've got the actual cost on top
because these teachers don't just get their basic salary,
they get a pension which is a defined benefit pension.
So, it's rated on how much they earn but you're either going to get something around 27% or up to 30%
going into their defined benefit pension so you've got to wrap that up in the cost.
The other thing to protect yourself is probably to actually put money into ICES, LICES, etc.
because we don't know whether the bandings will change, that there'll be,
the limitation will be a lot less, I mean currently it's for an ICES or it's 20,000
you'll have to do your research on other particular products but it sort of makes sense that
there is some sort of tinkering so that monies can actually be pulled out anywhere else,
they may change the amount of savings you can have before you are taxed
and if you can to shelter your investments now in regard to capital against tax.
As I said the labour manifesto pledged to not raise four taxes, income tax, national insurance, VAT and corporation tax.
I mean Starma said, I don't believe it's fair to raise taxes on working people.
Now the problem is, it's the definition of working people, it's later seemed to be established
and I suppose this hasn't been agreed by Starma that a working person is somebody who doesn't have
more than sort of 1500 sterling in their make account which would probably class the majority of people
if they manage their money correctly would not affect a really working class.
So the other thing that was stated, we're pro-business well to a certain extent
because a lot of business people on the larger side are probably floating between being a non-dom
at the moment and maybe being forced to move away from a non-dom.
So he also stated we are pro-business and pro-worker.
The party of wealth creation, the party promises to cap corporation tax at the current level of 25%,
the lowest in the G7 for the entire parliament.
Well, I don't know if they're going to do any particular tax changes like in Ireland specifically for the arts
which is incredibly low and maybe they ought to just pick something really exciting out of the bag
which will bring more employment for those sort of smaller companies.
So we moved down, Labour also pledged to not increase the basic higher or additional rates of income tax.
So they're going to either they've said well the actual rates of tax are going to stay the same
but they're going to play with the ceiling amount before you actually get into the next band.
So they're not raising taxes but they're raising the actual entry to where it is.
There's not really a great deal of confirmation about capital gains tax in the Labour manifesto
which is a major concern amongst entrepreneurs in the U.K.
So you could face a capital gains tax if you're a higher rate taxpayer on our own channel
or your investments crystallize or other chargeable assets.
I mean they have already seen their annual exempt allowance slashed by the current Conservative Government
for 3,000 a year from memory service from 10,000 a year.
I mean we've talked about that, I'd reiterate it's probably never been more important to maximize your 20,000
allowance for I'm not sure why people utilize it for gaining interest unless they're at a reasonable age
but it's much better to actually utilize this all for stocks and shares if you have a balanced portfolio.
Other more complex options include deferring gains by investing in enterprise investment schemes, EIS
but of course these carry significant risk but if you're a high net earner
you can offset sort of quite a substantial amount of this.
For inheritance tax you probably need to start planning to avoid a future liability
and where the Labour increases the rate of inheritance tax which is an eye-watering 40%
or reduce the nil ban rate which is 325,000 over the course of the next parliament is not really clear
but the major other thing to look at is whether gifts to spouses or civil partners
which are currently completely free of entire inheritance tax and each tax year you can give away 3,000
pounds worth of gifts with your annual exemption this means couples can give away 6,000 a year.
In addition there is no limit on excess income above expenditure that can be gifted.
We do not know whether this will be changed but any gifts will be clear of inheritance tax
if they fulfill the 7 year rule.
Now the major thing is school fees.
Now if you tax fees on education this is the short end of the wedge when what else are you going to tax?
Now I've been doing a little research so if you teach a student on a one-to-one
that particular activity is zero rate rated.
So the whole thing is that we've got zero rating on education as it currently stands.
You've got zero rating on books and you've got zero rating on clothes.
I think the issue is that there's this muddle that a lot of private schools have said that they are charity.
So I think you know at this moment irrespective of whether they are charity or not
I think looking at the current rules and the principle that VAT isn't imposed on people under the age of 18
will make it quite difficult for this to actually get through without the site that this could open the floodgates.
So the manifesto says that labor will end the VAT exemption and business rates relief for private schools to invest in our state schools.
The party expect to raise more than 1.5 million in 2028 to 2029 from the measure.
Now I will see that they would probably need to actually budget for 0.75 billion to be utilized to accommodate those parents
who can't afford or don't want to afford the private education and they would have to be taught by the local schools.
So I think that that measure is a bit moot.
But it's important for families to start planning for extra costs now.
I mean I think paying early may not be an option.
I think it will still be caught by the new rules or you may still want your children to have that education.
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.
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
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
which would detract a number of sons and daughters from actually doing this.
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.
So it's going to be harder and harder to have the funds to send children to private school.
But most will be reluctant to put their child out of the school, disrupting friendships and if key exams are on the horizon.
But it's vital to face up to the challenge and make a plan.
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.
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.
So many private schools offer pay and advance schemes, enabling parents to pay for a few years up front if they have them.
I'm not entirely sure that many parents would have that. They would have to take out a loan which is reasonably expensive.
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.
So I think you need to take legal advice if you're going to do that.
I mean, it says here that potentially on my notes this could also allow them to avoid the future imposition of VAT.
However, there is a risk of labour government could amend the legislation surrounding VAT.
So it becomes liable when a service is delivered rather than invoiced.
Now, I think that this is very difficult because this would also potentially change the bonding laws.
So the bonding laws is that you pay VAT on the purchases of things that go into bond like alcohol, whiskey, etc.
And then when you actually take out the product for consumption or if you resell, then you've already paid the relevant VAT.
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.
But it will be prudent to prepare for this financial hit in other ways by making economies elsewhere if necessary.
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.
And you may have to avoid holidays for paying a portion of this increase in tuition.
Lifetime gifts to help cover school fees can help reduce an eventual inheritance tax bill on an estate.
So this could be an option to consider for wealthier grandparents.
So with sufficient assets to gift.
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.
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.
And without being a detrimental with the emergency funds, etc.
So thank you very much for listening to my, my rant.
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Thank you very much for your time and have a good one.