60% income tax rate

thelawnet

Walletwatch wrote: »

You would be much more successful at initiating some form of discussion or debate if you were to get your point across in a better fashion. I have no idea what you are on about.

Sorry, I'm surprised at how poorly reported this tax rise has been, and therefore that people have no idea what I'm talking about. It's shocking how little the media seem to grasp the effect of the changes. Hopefully it's clearer now.

thelawnet

Seriously poor. This is the BBC's summary of the changes:

50% tax rate for earnings over £150,000
Big debt and deficit increases
Economy shrinks at record rate
Public spending squeeze planned
Books not balanced until 2018
2p on fuel, 1p on a pint of beer and 7p on cigarettes
£15bn public sector 'efficiency savings'
Claw back tax relief on top earners' pension
£2bn help for young unemployed
£1bn to boost housing market
£2,000 car scrappage scheme

http://news.bbc.co.uk/1/hi/uk_politics/8011321.stm

Not one mention of the personal allowance change.

And the point-by-point:

http://news.bbc.co.uk/1/hi/uk_politics/8011882.stm

Even longer, not a word on the PA change.....

Walletwatch

thelawnet wrote: »

Sorry, I'm surprised at how poorly reported this tax rise has been, and therefore that people have no idea what I'm talking about. It's shocking how little the media seem to grasp the effect of the changes. Hopefully it's clearer now.

Thanks. Now that you have clarified exactly what you mean, I totally agree, the drift of this has not exactly been unearthed as part of media reporting. Certainly, while only 1% of taxpayers may be in the above 150k bracket, there will be far more in the above 100k bracket !!!

Off to tell some friends of mine at work as to how they are affected by this.

BargainGalore

I wonder if the price of a 10 years old scrap car with go up now, one way to get 2k off a new car. Mind you there is still the question of getting the credit if you need it, or the fact Ford increased price not long ago

thelawnet

Walletwatch wrote: »

Thanks. Now that you have clarified exactly what you mean, I totally agree, the drift of this has not exactly been unearthed as part of media reporting. Certainly, while only 1% of taxpayers may be in the above 150k bracket, there will be far more in the above 100k bracket !!!

Off to tell some friends of mine at work as to how they are affected by this.

I would imagine that anyone earning between £100k and about £120k will be asking for a pay cut to £100k and the surplus to be paid as an employer's pension contribution on their behalf. Or even just cut their hours for less money. 60% tax is ridiculous.

I know that high earners for banks and the like have ways of avoiding tax - this just encourages it even more.

Mr_Mumble

thelawnet

BargainGalore wrote: »

I wonder if the price of a 10 years old scrap car with go up now, one way to get 2k off a new car. Mind you there is still the question of getting the credit if you need it, or the fact Ford increased price not long ago

Probably not, you have to have owned the car for a year, it ends next March, and only £1k comes from the government. The other £1k is paid by the manufacturer, which they were going to give you as a discount anyway.

£1000 is not much off a new car. Some brands routinely give £4 or £5k discounts anyway. And how many people running 12-year-old Volvo 940s bought for £1000 are really going to think that at £26,000 rather than £27,000 for a new V70 is worthwhile? Especially when they could buy a 3-year-old one for say £8 or £9k?

10-year-old car owners do not buy new cars, and I see no reason why they'll start now.

Rochdale_Pioneers

Sounds good to me. I weep for all the captains of industry on 6 figure salaries. Will they be sat worried about unemployment? Paying the bills? Having to manage/reduce food budgets? Capping spending on luxuries and days out?

Thats what so many of their employees are doing right now - if my MD isn't sharing the pain then the system is rewarding them and punishing us. Trust me - the government start publicising this move and it will be VERY popular. The mood out there is for payback from the fat cats - if the Tories want to oppose this tax on the rich then more fool them.

baileysbattlebus

Perhaps it hasn't had a lot of coverage because it was announced in November's Pre Budget, although it was at 45% not 50%.

the income tax personal allowance will be restricted for those with incomes over £100,000 - the two per cent of people with the highest incomes - from April 2010, when the economy is forecast to be growing. From that level of income, the personal allowance will be reduced at a rate of £1 of allowance lost for every £2 of income over that level until it is halved in value. At this value, the personal allowance will be worth the same as for a basic rate taxpayer. From £140,000 of income, the remaining allowance will be completely withdrawn at the same withdrawal rate, so that people with the very highest incomes do not benefit from the personal allowance

http://www.parliament.the-stationery-office.co.uk/pa/cm200809/cmselect/cmtreasy/69/6905.htm

I'm surprised no one remembers.

If you currently earn £112k you already pay neary £35k a year in income tax.

The personal allowance is worth about £2.5k in your salary a year - I know because I don't have it, I pay tax at basic rate. And as this is on a tapering scale £2.5k is the maximum it's removal will cost someone a year. Up to £150k.

It's when you get past the £150k it starts to make a real difference.

The chancellor himself, whose basic pay this year of £141,866 is just below the new £150,000 threshold for 50% tax, will pay an extra £2,590 in 2010/11. But the £194,250 salary of the prime minister brings him into the new top tax rate - and accountants Deloitte estimate he will pay £7,015 extra in tax

seven-day-weekend

thelawnet wrote: »

Probably not, you have to have owned the car for a year, it ends next March, and only £1k comes from the government. The other £1k is paid by the manufacturer, which they were going to give you as a discount anyway.

£1000 is not much off a new car. Some brands routinely give £4 or £5k discounts anyway. And how many people running 12-year-old Volvo 940s bought for £1000 are really going to think that at £26,000 rather than £27,000 for a new V70 is worthwhile? Especially when they could buy a 3-year-old one for say £8 or £9k?

10-year-old car owners do not buy new cars, and I see no reason why they'll start now.

Quite right; our eleven-year-old ultra-reliable Seat Alhambra will be sticking around, it still has plenty of life in it as it enters it third age ( a bit like it's owners really). When it does die, we will not spend more than £5k on something else. We would not even consider a new car (unless it was at least half price).

Just as an aside, I don't see how it's any 'greener' to buy a new car. The raw materials used to manufacture our car were used up eleven years ago so now all it uses is fuel; why use another lot of raw materials AND fuel on a new car??