oh dear: Minister hints at pensions tax raid on middle-class savers

[AtW]

"Pensions tax relief should be used to help lower paid workers rather than those who are better off, a minister has suggested amid growing signs that George Osborne is preparing to mount a raid on the pensions of middle-class savers.

The Chancellor is considering plans to scrap higher rate tax relief on pension contributions as part of his Budget later this month and move towards a "flat rate", which could be as low as 25 per cent.

The move would give lower paid workers more tax relief on their pension constributions but represent a significant cut for those who earn more.

David Gauke, the Financial Secretary to the Treasury, said in response to concerns raised by a Conservative MP that the Government wants to ensure that "the costs of pensions tax relief are targeted in the right direction".

It came as it emerged that millions of people could be forced to re-plan for their retirement under Government plans to raise the state pension age.

Ministers have announced a radical review of the pensions regime amid concerns that he current system is not "affordable in the long-term".

The review will be chaired by Sir John Cridland, the former head of the Low Pay Commission, and will assess whether the current pensions system is "affordable in the long-term". "

Source: Minister hints at pensions tax raid on middle-class savers - Telegraph

So Brown robbed pension funds of dividend tax credit, Tories always pointed out at that.

Osborne in less than 12 months robbed EVERYBODY of dividend tax credit _AND_ now pension relief will go kaboom.

But since Labour would have done it anyway (according to Waldork) we should not be concerned about it

[Waldorf]

Let's wait until we what is announced before we all get hot under the collar.

However all of this goes back to what a delicate state our finances are in. Personally I would be happy with the total removal of tax relief on pension contributions and move to a Pension ISA. This would be sold as save now and total tax free income when you retire. However if we don't get this the most relief I would go for would be 20%, the saving would go a long way to reducing the deficit.

As much as I support cutting spending, it is very difficult to do, once a previous government has given allowances, benefits etc it is very hard to take it away. The best way to do it would be to let them 'wither on the vine' but with inflation so low, this will take much longer to take effect.

Certainly an exit from the EU will allow us to properly review where we spend money and vastly reduce what we expect s government to do. Whether this happens very much depends on who in the next Prime Minister. A vote to remain will probably result in George Osborne taking over, a vote to Leave will probably mean someone very different.

On dividend tax credits, their removal has no effect in reality, so saying they have been 'robbed' is very misleading but what we can expect from the scare mongers.

[BrilloPad]

It could be worse. There could be a tax on cocaine. Or hookers. Or radiator keys.

[AtW]

On dividend tax credits, their removal has no effect in reality, so saying they have been 'robbed' is very misleading but what we can expect from the scare mongers.

Really???

No effect in reality???

My dividend tax rate will go up from 30.56% to 38.1%, bearing in mind that after that company paid corp tax which will still be 20% in 2016/17.

That's much worse than under Liabours 50% income tax regime (which Osborne opposed) when dividends tax rate was 36.11%

[AtW]

If I hear the term "hard working families" one more time, I'm reaching for the Barrett.

50 cal or 338?

[AtW]

However all of this goes back to what a delicate state our finances are in. Personally I would be happy with the total removal of tax relief on pension contributions and move to a Pension ISA. This would be sold as save now and total tax free income when you retire.

Who can guarantee that it will still be the case long after Osborne is gone???

I can actually guarantee the opposite - anybody with decent pension pots will be extra taxed in the name of "fairness".

[AtW]

My dividend tax rate will go up from 30.56% to 38.1%, bearing in mind that after that company paid corp tax which will still be 20% in 2016/17.
That's much worse than under Liabours 50% income tax regime (which Osborne opposed) when dividends tax rate was 36.11%

Come to think of it - 20% corp tax, 80% left, then 38.1% tax - 49.52% left: so effective rate of 50%+ tax from next month.

[barrydidit]

It's Only Fair(tm).

If I hear the term "hard working families" one more time, I'm reaching for the Barrett.

I think they're the new 'ordinary people'

[Waldorf]

My dividend tax rate will go up from 30.56% to 38.1%, bearing in mind that after that company paid corp tax which will still be 20% in 2016/17.

That's much worse than under Liabours 50% income tax regime (which Osborne opposed) when dividends tax rate was 36.11%

You are confusing the rate of income tax on dividends with the dividend tax credit. They are two different things.

You implied that people had been robbed of the dividend tax credit, this makes no difference, at least not in a bad way. Some people who had just crossed the higher rate tax bands may be slightly better off as the net dividend is no longer grossed up, therefore they may not enter the next tax band.

You either cannot understand basic matters or you are an idiot, not sure which.

[Waldorf]

Come to think of it - 20% corp tax, 80% left, then 38.1% tax - 49.52% left: so effective rate of 50%+ tax from next month.

Ah, but remember you claimed to have profits in excess of £1.5 million, so your corporation tax has come down from 28% to 20% and in a few years to 18%. So you are laughing aren't you!