Reply to: Final salary high earners could be hit by another Budget tax bombshell

[AtW]

Much higher Atw, 90 per cent for top earners.

I asked what %-tage of TOTAL income tax take those high earners represented? The tax might be 100% but if no one pays it represents 0% of total income.

My assertion would be that with reduction in top level of tax actual amounts raised from "rich" people increased.

[AlfredJPruffock]

And what %-tage of total income tax take did they pay back then? I doubt it was as high as it is now.

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Much higher Atw, 90 per cent for top earners.

[expat]

There are deals in the private sector that have been broken and thus some retirees are getting no pension whatsoever when they expected a good pension.
Deals can be broken

Ipse dixit.

[AtW]

If your Ltd Co subscribes to BUPA for you, you have to pay tax on BIK now, not when you are ill, because the benefit is the coverage, not the payout. Same with a pension: the taxable benefit is that you are covered.

BUPA is immediate insurance - plus the order of numbers is totally different, how much BUPA can cost and how much tax is?

You are NOT entitled to pension until you retire unlike BUPA or car insurance which provides immediate entitlement.

Now £6k pay raise to result in immediate demand of £24k paid for future pension that you might not live to use wtf?

Any tax on pensions should be deferred until the time when person retires and THEN income from such pension should be taxed (if income is high enough).

Govt however wants to tax you in advance because they are desperate for money.

[expat]

No, that's total rubbish - you don't receive benefit of pension until you retire: where as they tax you a big lump sum NOW according to new rules, that's total bull.

It's bad enough this pension con prevents people from getting hands on their own money until they retire, but now they would take huge tax which may well be abolished in a few years, yet nobody will give you a refund, that's total bull given that you might not live enough to use that "benefit".



The benefit is deferred big time - if Govt wants to tax it then they should wait until point pension is in effect and tax income from it.

If your Ltd Co subscribes to BUPA for you, you have to pay tax on BIK now, not when you are ill, because the benefit is the coverage, not the payout. Same with a pension: the taxable benefit is that you are covered.

[Mich the Tester]

We have 52% tax on income over 54000 euros here in NL. Very few people pay it, even though lots of people earn more than that. In practice people pay themselves through company dividend schemes as long as they can get away with it and then when the tax man starts making it difficult they just work less or emigrate. Most business owners actually just deliberately cut their profits and live off the business as much as possible; as I’ve said before if I risk paying lots of tax I just stay in more expensive hotels. A couple of the political parties want to abolish the higher tax rate and introduce a flat tax, but they can’t explain to numpties that a flat tax would actually net more income for the government as rich people work more and stay in NL, added to the savings through simplifying the system.

Politicians take note; people who are clever enough, or well advised enough to earn a lot of money tend to be clever enough or well advised enough to keep hold of their money.

[AtW]

1. The pensions due to public sector employees are due. They are part of the deal.

Deal does not need to be renegged - it can be taxed however right now at high rate which would in effect return money back to Govt.

[AtW]

Dont feel sorry for the Rich Atw - remember back in 1980 the taxrate for the top earners was 90 per cent

And what %-tage of total income tax take did they pay back then? I doubt it was as high as it is now.

This budget bit about massive extra tax if you have even small pay raise over £150k and you are on final salary just means that tax avoidance will be huge of this - with £6k salary raise paying £24k tax upfront on future pension that you might not even get is utter bs: this essentially means people won't get salary raise then (not official), which is probably the idea of Nu Liebor.

[Cyberman]

How can anybody "solve" it?

1. The pensions due to public sector employees are due. They are part of the deal. How lightly do you renegue on deals, Cyberman? And please don't tell me that you personally never made the deal, or I'll have to tell you how representative government works.
Can the employer now go back and change the employment contract retrospectively just because we now think that it was too generous? How about a private sector employer deciding that the salary it paid you 5 years ago was too generous, so they will now have half of it back? That's what it would be like.

2. most public sector pensions work exactly the same way as private sector pensions except that the employer is allowed not to have a fund because of the special power of this employer to raise funds as needed. The employee normally does contribute.

3. The public sector employer, i.e. the government, i.e. the people, was allowed to run a pension without a fund, because it could raise the money later. The employer, i.e. the government, i.e. the people, benefitted at the time from the use of both the employees' actual contributions and the employer's notional contributions, since it could spend or invest that money instead of saving it in a pension fund. We gained from that money (or, if you like, the govt frittered it away) and now the bill is due. That's all.

Remind me not to lend a tenner to anyone who thinks that it's OK to welch on paying back, because it doesn't look like such a good idea now.

There are deals in the private sector that have been broken and thus some retirees are getting no pension whatsoever when they expected a good pension.
Deals can be broken if they are unaffordable and are only there because a Labour government is scared of union action. It is up to the public sector to contribute fairly to their own pensions and not up to the taxpayer to bail them out year on year with ever rising taxes.
Contributions by public sector workers must be increased to at least 10% from the current 0-1.5% of salary if they wish these benefits to remain, and if they are not prepared to then their pension benefits must be cut.

[AlfredJPruffock]

Retards in the Govt should be jailing people like Sir Fred the Shred and confiscating their property to pay off victims of mismanagement rather than apply blanket tax on rich people.


Dont feel sorry for the Rich Atw - remember back in 1980 the taxrate for the top earners was 90 per cent - theyve been on a massive roll for a long ling time and benefited from a property boom - theyve been asked to cough up a wee bit more to help the country due to an economic collaspe caused by other reckless rich people in the Shadow Banking Sector.

[AtW]

This benefit is received now, whether you live to collect the payments or not.

No, that's total rubbish - you don't receive benefit of pension until you retire: where as they tax you a big lump sum NOW according to new rules, that's total bull.

It's bad enough this pension con prevents people from getting hands on their own money until they retire, but now they would take huge tax which may well be abolished in a few years, yet nobody will give you a refund, that's total bull given that you might not live enough to use that "benefit".

That would not be logical. The benefit that you receive is the existence of pension provision, not the actual payments of the pension.

The benefit is deferred big time - if Govt wants to tax it then they should wait until point pension is in effect and tax income from it.

[expat]

HMG hit private pensions but do nothing to reduce the public pensions timebomb. Currently the deficit is 4.5 Billion this year which has to be made up by taxpayers because public sector employees in many cases contribute nothing personally and public sector employers pay a reduced NI level to private employers.
This is a massive pensions apartheid and discrimination and the Tories have promised to solve this crisis of Labour's making.

How can anybody "solve" it?

1. The pensions due to public sector employees are due. They are part of the deal. How lightly do you renegue on deals, Cyberman? And please don't tell me that you personally never made the deal, or I'll have to tell you how representative government works.
Can the employer now go back and change the employment contract retrospectively just because we now think that it was too generous? How about a private sector employer deciding that the salary it paid you 5 years ago was too generous, so they will now have half of it back? That's what it would be like.

2. most public sector pensions work exactly the same way as private sector pensions except that the employer is allowed not to have a fund because of the special power of this employer to raise funds as needed. The employee normally does contribute.

3. The public sector employer, i.e. the government, i.e. the people, was allowed to run a pension without a fund, because it could raise the money later. The employer, i.e. the government, i.e. the people, benefitted at the time from the use of both the employees' actual contributions and the employer's notional contributions, since it could spend or invest that money instead of saving it in a pension fund. We gained from that money (or, if you like, the govt frittered it away) and now the bill is due. That's all.

Remind me not to lend a tenner to anyone who thinks that it's OK to welch on paying back, because it doesn't look like such a good idea now.

[expat]

IMO all this small print that is only coming out now is worse than 40->50% increase in income tax. It is particularly ridiculous to ask for big lump sum in advance as tax when you will only get benefits of pension many years in the future and possibly never if you die, would the Govt pay back this pension tax if you die too early?

That would not be logical. The benefit that you receive is the existence of pension provision, not the actual payments of the pension. This benefit is received now, whether you live to collect the payments or not.

I agree with you about the small print though, that's always the worst of the Budget.

[Cyberman]

HMG hit private pensions but do nothing to reduce the public pensions timebomb. Currently the deficit is 4.5 Billion this year which has to be made up by taxpayers because public sector employees in many cases contribute nothing personally and public sector employers pay a reduced NI level to private employers.
This is a massive pensions apartheid and discrimination and the Tories have promised to solve this crisis of Labour's making.

[AtW]

The great irony is that those people are paying actually lots of taxes already and by having private pension and most likely private medical services they reduce cost of them to the state.

Retards in the Govt should be jailing people like Sir Fred the Shred and confiscating their property to pay off victims of mismanagement rather than apply blanket tax on rich people.

IMO all this small print that is only coming out now is worse than 40->50% increase in income tax. It is particularly ridiculous to ask for big lump sum in advance as tax when you will only get benefits of pension many years in the future and possibly never if you die, would the Govt pay back this pension tax if you die too early?