I take it this is a load of old rubbish ?

Tinkerbelle1

There is a rumour going around that part-time workers or infact anyone in the UK earning less then £10,000 will not pay tax, this could be announced in the 2009 budget.

This sounds like rubbish to me, has anyone else heard this?

dmg24

What you are suggesting is that they may raise the personal allowance to £10,000. I have not heard such a rumour, but it is not as unlikely as it may seem.

Where have you heard the rumour?

PlutoinCapricorn

It sounds like wishful thinking and speculation, but there may be some truth in it.
People on low incomes are said to spend rather than save, so it makes sense to give them more money: they spend it and help the economy. We shall see soon enough.

Tinkerbelle1

I only heard through word of mouth,people had read it in newspaper I suppose the budget is not far off now, so we will hear then.

What is the personal allowance at the minute?

dmg24

Google is your friend ...

http://www.hmrc.gov.uk/rates/it.htm

Tinkerbelle1

dmg24 wrote: »

Google is your friend ...

http://www.hmrc.gov.uk/rates/it.htm

Ok I may sound silly, but how does this personal allowance work? Is it for example if you earn £10,000 do you earn the £6475 tax free and are then taxed on the remaining £3525 ? Or are you taxed on the full £10,000 and only tax free if you earn below the £6475 ?

timbellina

I'd be a wealthy man. But one of the reasons this gets touted so much is that increasing the personal allowances is far better socially than reducing tax rates. A hike like this takes a large number of people right out of the tax net. So there's less paperwork involved. It's far fairer as well - everyone gets the benefit, not just the individuals who are earning at the marginal rate when a rate is cut.

Gordon Brown is "old school" - and he was recommending this about thirty years ago (when I were a lad, and you could have fish and chips and a grand night out int' Odeon and still have change out of a florin); so maybe he has come, somewhat belatedly, to his tax senses.

Probably not, though.

Andy_L

Tinkerbelle1 wrote: »

how does this personal allowance work? Is it for example if you earn £10,000 do you earn the £6475 tax free and are then taxed on the remaining £3525 ?

That is the way it is done

Tinkerbelle1

Andy_L wrote: »

That is the way it is done

Ah ok thank you for that Andy

ceridwen

Hmmm...I'd not heard this and will be interested to see if its true.

I think there would be a certain logic in it. Obviously one cant afford tax on an income of only £10k per annum - but that hasnt stopped the Govt charging tax till now on it. But I dont think this would be done from fairness - more like the fact that a noticeable number of employees are currently having their hours reduced (be it temporarily or permanently) and I guess it could be a way for the Govt to help employERS out - ie make their employees less reluctant to "agree" to these wagecuts - from which there would be less chance of people going onto increase the size of the dole queue (because they thought "blow this - I'm a full-timer...I'm not having my hours cut...so I'll refuse and wait to see if they make me redundant").

So - put like that...I think it could be possible - just at a financial level.

On a social level - it could be that they are thinking "well if we do something that will make people less reluctant to do part-time jobs - then there will be more paid work to share around between everyone - and less chance of a large number of people sitting on their !!! completely unemployed - and less chance of social disorder".

The Government is clearly anticipating large-scale social disorder at present - and understandably so - so this might be one of the less antisocial ways they might try and "nip it in the bud" (well...tis an improvement on the Surveillance Society and nipping in over the last week and doing a mass arrest of over 100 people IN CASE they commit an offence - ie Climate Campers!:mad:)

p00hsticks

This is probably better of in 'discussion time', but...

In my opinion this is very unlikely to happen in this budget. For one thing, it would be very expensive, and I think that Alisdair Darling has already stated that there is no money available for changes of this magnitude.

Also, as timbellina points out, an increase in the tax allowance means that every one gets extra money, however highly paid they are. You can more effectively target low earners by measures such as increasing the rates of CTC and WTC and/or loosening the eligibility criteria for them.

It's possible that it might be raised to that sort of level for the over -65's though - it's not that big an increase from their existing allowance and many pensioners are in a group whose income has been severely impacted by the drop in interst rates on savings.