Latest news with #taxchanges
Telegraph
6 days ago
- Business
- Telegraph
Reeves's deputy dismisses Bank of England's job market fears
The Treasury has dismissed Andrew Bailey's warnings that Rachel Reeves's £25bn National Insurance (NI) raid is hitting Britain's jobs market. Darren Jones, the chief secretary to the Treasury, insisted that 'hundreds of thousands of new jobs' have been created, despite the Governor of the Bank of England raising concerns that the tax changes were damaging hiring and hitting pay packets. Mr Jones claimed that National Insurance contributions (NICs), paid by bosses on their employees' pay packets, protect workers rather than harming their wages and their job prospects. 'There have been hundreds of thousands of new jobs created across the economy and we, in the first quarter of the year, were the fastest growing economy in the G7,' Mr Jones said in an interview on BBC Radio 4's Today Programme. 'We are doing everything we can to create the conditions for business to be profitable and to be able to grow, of course we had to take that particular tax decision in the Budget last year because our commitment was to protect working people in their pay slips.' He was speaking after Mr Bailey warned companies were 'adjusting employment and hours, and also having pay rises that are possibly less than they would have been if the NICs change hadn't happened'. 'I think we're getting more consistently the story that [businesses], if you take the National Insurance change, are adjusting via the labour market. I don't think we're getting to a tipping point in the sense that it's becoming a sort of flood,' he said in an interview with The Times. Softening labour market It is not the first time the Governor has raised concerns over the impact of the tax. Last month, Mr Bailey told the House of Lords: 'We are starting to see softening of the labour market and that's the message I get when I go around the country talking to firms. 'I am hearing more firms telling me they are making adjustments on both of the labour market sides, so both quantities and prices.' Regular wages in the private sector in April grew by 5.1pc on the year, according to the Office for National Statistics, the slowest pace since February 2022. Tax data indicates there were 30.2m payrolled employees in May, down by 0.9pc, or 274,000, compared with the same month of 2024. Even as the number of people employed in health and social work increased by 62,000 on the year, jobs in accommodation and food services plunged by 124,000. The ONS found 736,000 job vacancies advertised in May, down from the post-lockdown peak of 1.3m two years earlier, and the lowest number since the depths of Covid in 2021.
Yahoo
12-07-2025
- Business
- Yahoo
I Asked ChatGPT What Trump's ‘Big Beautiful Bill' Means for Retirees' Taxes: Here's What It Said
While President Donald Trump's recently signed 'One Big Beautiful Bill' (OBBB) has more provisions than one could ever hope to break down in an article, it's big on tax changes, including those that will affect retirees. Check Out: Read Next: Overwhelmed at understanding it, I turned to ChatGPT to learn more about what it means specifically for retirees and their taxes (with fact-checking, of course!). Here's what ChatGPT said. One of the big things that the OBBB does is extend many of the tax breaks originally introduced under the 2017 Tax Cuts and Jobs Act (TCJA). However, it did make some adjustments that retirees need to pay close attention to. The OBBB maintains the current lower income tax brackets from the TCJA for now, 'which means retirees pulling from IRAs, 401(k)s, or other taxable retirement accounts will likely continue to benefit from lower marginal rates through at least 2025,' ChatGPT pointed out. However, some of those provisions will still end in 2026 unless further legislation is passed. 'That means higher taxes on retirement income could be around the corner — especially for those who delay Required Minimum Distributions (RMDs) or Roth conversions,' ChatGPT said. With current income tax rates remaining lower, it might be a good idea for retirees to consider converting their pretax retirement savings into Roth IRAs, ChatGPT suggested, 'locking in today's lower rate and avoiding potentially higher taxes in future years.' While the OBBB doesn't restrict Roth conversions, ChatGPT pointed out that it does underscore how limited a window retirees have to take advantage of current tax policy. Not only does the OBB uphold the estate tax exemption, which was scheduled to sunset in 2026, but it increases it to $15 million per individual. ChatGPT suggested, 'Retirees with larger estates should start working with advisors now to explore gifting strategies, trusts, or other tools while current limits are still in place.' The OBBB permanently extends the doubled standard deduction, an added benefit to retirees who no longer itemize deductions like mortgage interest or large charitable contributions, ChatGPT informed me. 'This simplifies filing and reduces taxable income for many,' it wrote. Retirees who do still itemize won't benefit from this change, unfortunately. Healthcare expenses are always a huge concern for retirees. The OBBB does not eliminate the ability to deduct qualified medical expenses over 7.5% of AGI, which is critical for retirees with significant healthcare costs. While these all sound like good things for retirees and their taxes, I asked ChatGPT if there were any downsides for retirees within the OBBB? One downside is that the OBBB doesn't address the way retirement income can push retirees into higher brackets for Medicare premiums (IRMAA) or taxation of Social Security benefits, ChatGPT wrote. Thus, 'Even with lower federal tax brackets, higher income can trigger other hidden costs — and retirees may still be caught off guard,' ChatGPT wrote. The One Big Beautiful Bill gives retirees short-term certainty with continued low tax rates, but it doesn't eliminate all of the 2026 sunset risks. 'Retirees should consider proactive moves now, like Roth conversions, income acceleration, or estate planning updates, while rates are still favorable,' ChatGPT wrote. ChatGPT also emphasized the importance of 'active planning.' Otherwise, 'Retirees could end up with a larger-than-necessary tax bill, or miss out on optimization strategies like bracket management or asset location.' More From GOBankingRates Warren Buffett: 10 Things Poor People Waste Money On This article originally appeared on I Asked ChatGPT What Trump's 'Big Beautiful Bill' Means for Retirees' Taxes: Here's What It Said Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-07-2025
- Business
- Yahoo
Microsoft and Oracle Poised for a Cash Windfall
Evercore ISI notes that the One Big Beautiful Bill could quietly pump up cash balances at big software names like Microsoft (NASDAQ:MSFT) and Oracle (NYSE:ORCL). They've crunched the numbers and say that by tweaking how R&D and capital spending get deducted, companies will see more free cash flow sooner. Warning! GuruFocus has detected 7 Warning Sign with MSFT. Under this plan, all domestic R&D costs can be written off right away and any qualifying capital outlay placed into service between 2025 and 2029 earns full bonus depreciation. That replaces the old schedule where, in 2025, only forty percent could be deducted immediately. Microsoft alone could pocket about eleven billion dollars of extra cash flow next year, which works out to roughly one dollar and fifty cents a share. Oracle would see around three point three billion more, or just over a dollar per share, driven by their hefty AI and data center investments. Pulling deductions forward like this means more money on hand for new projects, infrastructure upgrades, or even returning cash to investors. Evercore points out that software firms paying real cash taxes might boost free cash flow by roughly nine percent thanks to these tweaks. That optimism shows up in Evercore's ratings too. They have both Microsoft and Oracle as outperform with raised price targets. It's clear they expect these tax changes to free up capital and help those tech giants fuel future growth. This article first appeared on GuruFocus.
Yahoo
08-07-2025
- Business
- Yahoo
Tax changes for P.E.I. businesses are a small step forward, says CFIB
The Canadian Federation of Independent Business is welcoming P.E.I.'s tax changes for businesses but believes more can be done to support local owners and help them stay competitive. "Definitely it's a step in the right direction, but it's just a small incremental step," said Frédéric Gionet, the director of Legislative Affairs for the CFIB in Atlantic Canada, said of the measure that came into effect a week ago. P.E.I. has two types of tax rates for businesses: the small-business tax rate and the corporate tax rate. The general tax rate for businesses has now dropped from 16 to 15 per cent, and although the small-business tax rate is staying at 1 per cent, the income threshold has gone up $100,000 to $600,000. It means "every business operating in the province can claim more of their income under the lower rate of business tax," according to a news release from the Department of Finance. Changes in effect July 1 The changes, initially announced in the provincial operating budget, came into effect on July 1, 2025. The province estimates it will save businesses more than $9 million. "We've been asking the P.E.I. government for years to increase the small-business tax rate threshold," said Gionet. "We were asking for $700,000 and indexed inflation. So we'll keep working on that for sure, but that does help." When it comes to the small-business tax rate, P.E.I. has one of the lowest in the country, while also now boasting one of the highest income thresholds. The province's corporate tax rate remains one of the highest in Canada, however, said Gionet. "We understand that this, you know, takes away revenue from government, but at the same time, these businesses do provide a lot of economic activity, employ a lot of people," he said. "It has to be competitive. Otherwise we're just going to be driving businesses away." More work to do, says CFIB In Nova Scotia, the small-business tax rate sits at 1.5 per cent, while the small-business income threshold is $700,000. "We have to look at our neighbours," he said. "New future businesses, new young people wanting to start a business, it might be a disincentive to do so, looking at their own financial situation down the road if the tax rates are not there, are not favourable for them to grow and to be successful." Still, he said the tax changes are a start. "It also sends a signal that P.E.I. is, you know, trying to right the wrongs of their taxation," said Gionet. "I think it's the first step that's going to need to have multiple other steps to be competitive on that landscape. And we want to encourage governments to do that, to find the ways to make P.E.I. competitive."
Yahoo
07-07-2025
- Business
- Yahoo
Wealthy UK households rush to leave England over tax change
Labour has been warned over a "flight of the non-doms" as the super-rich flock to leave the UK. Reports say the wealthy elite are leaving over tax changes – prompting a possible rethink by Rachel Reeves, the Labour Party Chancellor. More than 20 luxury properties in the Belgravia postcode are on the market, says a buying agent. One Indian non-dom, who has been living in the UK for the past five years, said she was considering moving her family to Switzerland as a result of the tax changes. 'We love England. We feel very much at home here,' she told the Guardian. 'We want to pay fair tax as members of society. But the biggest pain point was inheritance tax … it is not just ours, but my grandfather's and my parents' wealth that would now be taxed by the UK. That feels deeply unfair as the money was not made here. READ MORE: Warning for thousands of drivers who have 'quiet' EVs on driveway READ MORE: Dame Deborah James' husband's new girlfriend 'unmasked' as he finds love again READ MORE Next UK heatwave set to be 'even hotter than expected' and will start within days 'The current philosophical approach seems to be shrinking everyone's pie instead of enlarging the pie, bringing more investment, employability and wealth to the country.' Sean Cockburn, of the advisers Forvis Mazars, said: 'There has been an acceptance of higher income and capital gains but the emotional trigger has been inheritance tax. That seems to be the motivator for those moving. But not everyone is leaving the UK entirely. 'Yes some people have left, some people are considering it, but some people have decided to stay and are broadly accepting of the new rules. In the media there have been very high-profile, very wealthy people leaving who receive a lot of coverage. I personally have not had many clients leaving.' "Non-dom" describes a UK resident whose permanent home - or domicile - for tax purposes is outside the UK. It refers to a person's tax status, and has nothing to do with their nationality, citizenship or resident status - although it can be affected by these factors. A non-dom only pays UK tax on the money they earn in the UK. They do not have to pay tax to the UK government on money made elsewhere in the world (unless they pay that money into a UK bank account). For wealthy individuals, this presents the opportunity for significant - and entirely legal - savings, if they nominate a lower-tax country as their domicile.
