Cameron to scrap taxes on savings (basic rate only)

sdooley

right but as above small savers have the benefit of ISAs.

now if Cameron were to pay for this by abolishing ISAs (so higher rate payers paid tax on their savings income that might work but that'd screw his more vocal (read well-off) supporters.

if you want to beat the inflation rate on savings NS&I's long been the only way to be sure over a 3 or 5 year term.

as you say high interest rate environments also don't help savers, as the inflation rate tends to be higher

LesU

Inactive wrote: »

Indeed, but Mandy isn't likely to ever be in charge of our economy, unlike Osborne.:rolleyes:

So he isn't in talks with parts of industry, including the motor industry, regarding multi-billion pound bailouts?
The strings aren't as obvious as on Thunderbirds, but they are there nevertheless.

LesU

earlgrey wrote: »

Would tend to agree but there has often been a degree of unfairness with tax on small savings too. If for example someone gets 3% interest but inflation at 5% leaves him 2% worse off then taxing the 3% interest as if it is a "gain" is a tad unfair. (Was still worse when we had inflation in double figures so low interest rates with low inflation could actually be better for savers.)

The closest equivalent to this is Capital Gains Tax. Why should someone who has bought a painting and then sells it at a profit later on get an exemption of nearly £10,000 per annum against tax on that profit? Put the same into a savings account and you will get taxed on all of the gains every year.

Perhaps the same sum as the Annual Exempt Amount could be given to each tax payer to use as they see fit, whether it is paintings or savings.

harry_w

ozzage wrote: »

So... every bank account is an instant Cash ISA now?

Except for HRT like me? Would we still be paying 40% then?

Sorry, you and I fall outside the favoured groups who benefit from this particular tax-benefit/subsidy.

Almost all measures taken in response to the credit-crunch / financial crisis have been made to particular interest groups (mortgage borrowers, the low paid, pensioners, etc).

They're meaningless to people who happen to fall outside the Labour and Tories' pet voting groups.

It isn't economic policy it's electioneering.

Blah99

LesU wrote: »

Perhaps the same sum as the Annual Exempt Amount could be given to each tax payer to use as they see fit, whether it is paintings or savings.

That's not a bad idea actually, but the amount would have to be significantly higher than the CGT and ISA thresholds combined.

CGT is bad idea anyway, it's a blanket tax when a targeted tax would be much more appropriate. There's a reason that VCs get tax breaks on investments, the same principles should apply to what's currently covered by CGT.

MM46

If tax on savings is abolished for basic rate tax payers then there is a risk that cash ISAs are also abolished. That's all very well as long as the no tax on savings rule is kept, but when the economy recovers the government of the day could then re-introduce tax on savings. Then all the people (like us) who have painstakingly built up ISAs in the years when we were working will end up with no tax relief on savings at all to help with our pensions.

cottager

MM46, surely any government of any flavour would need to be absolutely specific about this situation from the start, and give assurances about retaining the tax-free status, or every ISA holder in the country would be joining lynch mobs?