Tax rises?

[Smartie]

The IFS has new analysis today regarding the issue of frozen tax thresholds.
Seems that it will be continued in the budget and has the following effect:

"Finally, since most means-tested benefits are by default uprated in line with inflation, individuals in households that receive means-tested benefits are increasingly likely to also pay income taxes. The number of taxpayers in families entitled to universal credit (UC) would rise to 3.1 million if the freezes are extended, 690,000 more than if there had been no freezes and 110,000 more than under current policy. This matters because these workers face particularly weak work incentives. Families in receipt of UC see 55p of benefit withdrawn for every £1 increase in the family’s after-tax earnings, meaning that workers on UC who do not also pay income tax or NICs keep 45p for every pound they earn. However, those who do pay income tax and NICs typically keep at most 32p from an extra £1 earned."

[malvolio]

Hidden in the detail is no change to rates but there could be a change to the thresholds.


Drop the income tax threshold
Increase Employee threshold for a a working person for a net zero change
Bring Employer pension contributions/salary sacrifice in scope of Emp NI and Income tax

Net result is private pensioners and private pension are now taxable.

They already are. Quite a lot of us are paying it...

[jamesbrown]

And now this ….

https://www.theguardian.com/uk-news/...ates-in-budget

Apparently, the fiscal forecasts aren't quite as bad as feared. Productivity downgrade offset by some improvements in wage growth and tax receipts.

On the downside, it sounds like a death-by-a-thousand-cuts budget, so expect general chaos (c.f. pasty tax) and much hammering of contractors and the wealthier.

[jamesbrown]

Hidden in the detail is no change to rates but there could be a change to the thresholds.


Drop the income tax threshold
Increase Employee threshold for a a working person for a net zero change
Bring Employer pension contributions/salary sacrifice in scope of Emp NI and Income tax

Net result is private pensioners and private pension are now taxable.

Eh? Pensioners already pay income tax (a personal tax) and personal income is completely separate from business income. If they were to charge EeNI on pension income, that would be a (consistent) personal tax too, given that NI is not hypothecated (despite popular misunderstanding), although they are unlikely to do it. Charging ErNI on employer contributions is also consistent, although it sounds as though SalSac is squarely the focus for understandable reasons.

[milanbenes]

give it a rest ffs :-)

the question is, how much do you need / will you need

to retire on (this means what are/will your monthly costs be)

and for how long

is your pension instrument of choice inflation proof

if you have the answers to those questions and can tick those boxes as solved then you're laughing

and then all this talk of budgets doesn't matter

Milan.

[sadkingbilly]

give it a rest ffs :-)

the question is, how much do you need / will you need

to retire on (this means what are/will your monthly costs be)

and for how long

is your pension instrument of choice inflation proof

if you have the answers to those questions and can tick those boxes as solved then you're laughing

and then all this talk of budgets doesn't matter

Milan.

aye, - right!

[milanbenes]

well that has to be a guess wouldn't it

it depends if

your pension plan to draw down to zero within a fixed number of years

or you have an income generating pension where you can live off the income without touching the source of the income

have a think about that

Milan.

[jamesbrown]

give it a rest ffs :-)

the question is, how much do you need / will you need

to retire on (this means what are/will your monthly costs be)

and for how long

is your pension instrument of choice inflation proof

if you have the answers to those questions and can tick those boxes as solved then you're laughing

and then all this talk of budgets doesn't matter

Milan.

It's more interesting than your boring ski holidays, Milan. Snooze central

[sadkingbilly]

well that has to be a guess wouldn't it

it depends if

your pension plan to draw down to zero within a fixed number of years

or you have an income generating pension where you can live off the income without touching the source of the income

have a think about that

Milan.

CBA, really, - i'm sorted

[milanbenes]

sorteeed

Milan.