The Budget Breakdown - Episode 8

In this episode, Mark Morton unpacks the uncertainty and speculation surrounding the Autumn Budget 2025. From leaked proposals on income tax and dividend rates to potential changes in pension contributions and road charging for electric vehicles, Mark explores the lack of clear strategy and its impact on business confidence. He questions whether knee-jerk reactions are replacing long-term planning and what that means for taxpayers and businesses.

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Transcript

Hello and welcome to this budget related Podcast.

So this is the last one, pre-budget in this little series of trying to work out what is actually going on.

And I have to say in the lead up to the shambles, I think my little last little podcast was after the rather strange speech, which seemed to say in a nutshell.

It's really bad, but it's not my fault.

Post that a lot of briefing suddenly comes out in the press that the government are gonna go ahead with a two P raise in income tax and yes a week later, suddenly we're not doing that.

And if I'm honest, you know, all governments of recent times have done a bit of leaking before the budget.

I can't honestly think that.

In the last two budgets, I can't think prior to that in my career, we have had so many kites being flown by whoever it is, you know, whether it's the chancellor, whether it's the treasury, whether who it, and of course, complete chaos.

I think the best way I can sum it up is a complete shambles, to be quite honest.

And interestingly, I've mentioned his name before, a guy called Torsten Bell, who is a treasury minister.

Making the comment some days down the line.

Well, there's been too much speculation about the budget.

I should have a look at home mate and have a look at who's been dripping this out to the press. 'cause I su suspect some of it was you ultimately amongst others.

And as we all know, complete uncertainty.

Are the figures good?

Are they bad?

You know, two weeks ago it was a kind of disaster.

Now apparently the economic forecast has changed and it wasn't as bad as we thought, and hence.

You know, just make a decision.

And I think one of the, one of the fundamental problems, it is amazing. 14 years in opposition, you would've thought there would be ultimately a plan, whatever that plan is, whether you like it, whether you don't like it, whether it's tax the rich, whether it's, whatever it is, you would've thought there would be a plan.

And I think that the scary thing at the moment is.

There appears to be no great plan and it's just knee jerk reactions to events without any great ethos driving what then may or may not happen.

You know, if you look in the last week we've had the two P or not two P.

That is the question.

We've had a suggestion leaked in the press that taxation on dividends is gonna go up.

Now the figure that was mentioned was 16%.

Which wouldn't affect two brackets of dividends, but would affect the basic rate tax on dividends.

Presumably on the basis only rich people have shares or something.

You know what that is about quite, you know, where it's come from.

Nobody seems to know.

We've then had a suggestion that if you've drie, just brought an electric car, you may be unhappy because what we'll start do is road charging you because you don't pay, ultimately any fuel duty.

And I think those two things particularly are brilliant ideas because I have no dividend income and I don't have an electric car, you know, so please feel free to do those and leave me alone.

The other thing which doesn't get as much.

Press 'cause I suspect ultimately the press don't really understand the point.

Some suggestion floating around.

There will be a cap put on the salary sacrifice of personal pension contributions for employer contributions.

Now in terms of the tax position.

Obviously the tax position is unchanged presumably because unless they're gonna change the situation that, you know, as a personal individual I get some sort of tax relief.

And as the business I get some sort of tax relief.

But of course the national insurance now, that would be an increase in national insurance.

I'd be very interested how you sell that when working people.

Would be affected by that. 'cause I suspect there's a lot of employees working for a lot of big companies who may be dragged into that somehow.

The government seemed to suggest this 2000 pound limit.

So maybe the selling point is actually you're not a working person if your personal patient contributions are that high.

Of course the other issue it would do for bigger employees is put their national insurance bill up yet again.

Now in light of what we've just seen in the last year of an increase in national insurance, you know, followed by unemployment up, job vacancies down, inflation sticky, and so on and so forth, it would seem a very odd.

Idea that you would come along to certain employees and essentially do the same thing again, to some extent quite what the people in power think the consequences of that would be.

We shall see.

But the problem ultimately, you know, you brief like this, it worries people.

And I think if you look at business confidence.

My feeling would be that successful businesses are saying, actually, we're not gonna recruit anybody at the minute.

We're not gonna make that investment.

We're not gonna take a risk because they are keeping their powder dry because they are not sure what's coming.

Particularly in light of the fact that a year ago we were told, you know, one big set of tax rises and that's, it seems to be followed by another set of tax rises.

And I think, you know, the figures may be better than thought, but ultimately as a country.

I touched upon this before we spend more than we have year on year.

And to address that, you have to do something fundamental.

You can't just keep raising taxes.

You have to look at the other side of the question equation and say, well, what are we spending this money on?

And are we getting, you know, a fair rate of return on public expenditure?

That side of the equation is not really being talked about at the moment.

You know, winter fuel was a billion quid.

Well, our deficit is the best part of a hundred billion quid.

You know, it's a hundred billion quid of a hun, you know, so it's very difficult times.

But I think what is clear is there are gonna be tax changes.

There clearly are, but it would appear that rather than something really fundamental that laypeople would understand it's actually gonna be done in a roundabout manner.

And of course, the last thing I've just seen coming through the press over the last couple of days is we'll freeze tax bans yet again for, you know, another couple of years.

Which is not quite so well understood as two P and the pound.

The interesting thing there is, particularly pension, is that is gonna get some people's backs up.

Particularly in certain areas.

So we are in strange times.

We are in very strange times, but the waiting will be over on the 26th of November, I think.

All I can say is don't panic.

For those of you that remember Dad's army anyway, we'll be trying to keep you up to date, post budget day with the developments assuming that we contract the developments.

So we will see.

But anyway, take care everybody.

We'll see what the budget brings.