We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
MSE News: Budget 2012: Personal tax allowance to rise
Former_MSE_Helen
Posts: 2,382 Forumite
This is the discussion thread for the following MSE News Story:
"Chancellor George Osborne revealed the personal tax allowance will rise, but pensioners won't benefit to the same extent..."
"Chancellor George Osborne revealed the personal tax allowance will rise, but pensioners won't benefit to the same extent..."
0
Comments
-
The chart B2 on page 91 of the budget report tells the true story.
Allowing for the changes to direct tax, tax credits, benefits and indirect tax it is indeed the top 10% of earners that are hit hardest in percentage terms as a percenatge of net income.
But what is shocking is that the next worst hit are the bottom 10% of earners.
Next worse are those in the bottom 10-20% of earners.
Next worse are those in the bottom 20-30% of earnings.
Next worse are those in the bottom 30-40% of earnings.
Next worse are those in the bottom 40-50% of earnings.
So taking out the very top 10% of earners the lower your earnings the harder you are hit by the budget
The caveat I would make is I am not certain I have interpreted it correctly, but that's what it looks like to me at first glance.I came, I saw, I melted0 -
So my tax allowance (I'm 62 ) and my husband's (63) will rise to £9205 in April. My friend who is 69 will have his frozen at £9940 until such time as mine and my husband's equals his, then after this we will all have the same rise.
Sounds fair enough to me.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
"Osborne says low and middle income earners will be £220 better off per year when this kicks in. Higher rate payers won't benefit to the same extent as more people will fall into that category."
Not very well explained.
What they have done is increase the personal allowance by £1100, from £8105 to £9205. At the same time, they have reduced the basic rate band from £34,370, by £2125, to £32,245.
Therefore the higher rate threshold, currently £42,475, will fall to £41,450.
Somebody earning £42,475 in 2012-13, will pay £6874 in income tax.
Somebody earning the real equivalent of that in 2013-14, which is £43,919 will pay £7436.66 in income tax, in 2013 money. That's a tax increase, in today's money, of £345.
So higher rate tax payers are £345 worse off. Basic-rate tax payers are actually better off by around £160, not £220, in real terms, because again the rate should rise each year.0 -
Your are reading it right, but I would say this:The chart B2 on page 91 of the budget report tells the true story.
Allowing for the changes to direct tax, tax credits, benefits and indirect tax it is indeed the top 10% of earners that are hit hardest in percentage terms as a percenatge of net income.
But what is shocking is that the next worst hit are the bottom 10% of earners.
Next worse are those in the bottom 10-20% of earners.
Next worse are those in the bottom 20-30% of earnings.
Next worse are those in the bottom 30-40% of earnings.
Next worse are those in the bottom 40-50% of earnings.
So taking out the very top 10% of earners the lower your earnings the harder you are hit by the budget
The caveat I would make is I am not certain I have interpreted it correctly, but that's what it looks like to me at first glance.
The chart doesn't show the story of this Budget - it shows the story of everything that has been announced since the Government came to power and everything that was announced by the previous Government and implemented since the election. I suspect analysis of the announcements in this Budget will show a completely different story - the IFS will no doubt produce such analysis in their Budget briefing tomorrow afternoon.
I would like to see the Treasury produce a chart by household type to see the impact on pensioners and families with children - but on previous evidence the IFS will do that for us tomorrow I'm sure.Did you really mean to put loose?
Lose: no longer possess, not to retain, unable to find
Loose: not firmly or tightly fixed in place0 -
No, In April 2012 your allowance will go up to £8105.seven-day-weekend wrote: »So my tax allowance (I'm 62 ) and my husband's (63) will rise to £9205 in April. My friend who is 69 will have his frozen at £9940 until such time as mine and my husband's equals his, then after this we will all have the same rise.
Sounds fair enough to me.
In April 2013 it will go up to £9205.
In April 2012 your friends age related allowance will go up to £10,500
And then be frozen.
http://www.hmrc.gov.uk/rates/it.htm
http://www.hm-treasury.gov.uk/budget2012_fair_efficient_tax.htm0 -
Ah right. I misunderstood. We will all end up with the same eventually though! (But then again we always would have.....)No, In April 2012 your allowance will go up to £8105.
In April 2013 it will go up to £9205.
In April 2012 your friends age related allowance will go up to £10,500
And then be frozen.
http://www.hmrc.gov.uk/rates/it.htm
http://www.hm-treasury.gov.uk/budget2012_fair_efficient_tax.htm
Thanks for explaining.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
AirlieBird wrote: »Your are reading it right, but I would say this:
The chart doesn't show the story of this Budget - it shows the story of everything that has been announced since the Government came to power and everything that was announced by the previous Government and implemented since the election. I suspect analysis of the announcements in this Budget will show a completely different story - the IFS will no doubt produce such analysis in their Budget briefing tomorrow afternoon.
I would like to see the Treasury produce a chart by household type to see the impact on pensioners and families with children - but on previous evidence the IFS will do that for us tomorrow I'm sure.
Yes I agree with you as it says
So it would have been more accurate for me to sayThis, and other distributional analysis in this annex, is presented on a cumulative basis and so includes measures from this Budget, Autumn Statement 2011, Budget 2011, Spending Review 2010, and the June Budget 2010. It also includes changes that were announced before the June Budget 2010 which are being implemented by the Government
So taking out the very top 10% of earners, the lower your earnings are, the harder you are hit by changes including those already announced to 2013/2014
Still shocking.I came, I saw, I melted0 -
Yes, it's always disingenious when politicians ignore what would have happened anway."Osborne says low and middle income earners will be £220 better off per year when this kicks in. Higher rate payers won't benefit to the same extent as more people will fall into that category."
Not very well explained.
What they have done is increase the personal allowance by £1100, from £8105 to £9205. At the same time, they have reduced the basic rate band from £34,370, by £2125, to £32,245.
Therefore the higher rate threshold, currently £42,475, will fall to £41,450.
Somebody earning £42,475 in 2012-13, will pay £6874 in income tax.
Somebody earning the real equivalent of that in 2013-14, which is £43,919 will pay £7436.66 in income tax, in 2013 money. That's a tax increase, in today's money, of £345.
So higher rate tax payers are £345 worse off. Basic-rate tax payers are actually better off by around £160, not £220, in real terms, because again the rate should rise each year.
HMRC say that most basic rate taxpayers gain by £170 in real terms, higher rate taxpayers gain by £42.50 when a reduction in NICs is taking into account.
They also say 1.8 million individuals will lose, on average, £185 and 300,000 people will be brought into higher rate tax. 25% of the losers will be pensioners (and that's before you take into account the losses coming from the aged personal allowance changes).Did you really mean to put loose?
Lose: no longer possess, not to retain, unable to find
Loose: not firmly or tightly fixed in place0 -
Rich get richer, poor get poorerEstate Agent, Web Designer & All Round Geek!0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.4K Banking & Borrowing
- 253.3K Reduce Debt & Boost Income
- 453.8K Spending & Discounts
- 244.4K Work, Benefits & Business
- 599.7K Mortgages, Homes & Bills
- 177.2K Life & Family
- 258K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards