Capital Gains Tax to increase from 18% to 30%?

Harry_Powell

I thought tax credits were Brown's idea when he was chancellor? I could be wrong though.

zygurat789

Harry_Powell wrote: »

I thought tax credits were Brown's idea when he was chancellor? I could be wrong though.

The idea has been around for a long time but Gordon brought them in.
HMRC do require you to inform them if circumstances change so that they can change the assessment.
Trouble with themis:-
There are inherent problems giving people money for nothing.
The administration is appalling. I believe they gave billions to the Russian !!!!! in fraudulent claims.
They are far too generous.
The answer is to ensure it is possible to earn a living wage. The NMW is totally pathetic but businesses winge every time it goes up and tax credits is the result.

StevieJ

Pennywise wrote: »

The company paid 25% "advance corporation tax" (ACT) each quarter according to the dividends paid during that quarter.

At the end of the company's accounting year, it's corporation tax was calculated on the normal rules, i.e. profit made. If it made a healthy profit and had a higher corporation tax liability than already paid in ACT, it had a balance of tax to pay, but if it's taxable profits were less than ACT paid, it couldn't claim a refund and could only carry forward the excess ACT to later accounting years.

I know what you are saying but the ACT is a payment of corporation tax not a tax on dividends, it was just a way of collecting tax earlier.

Harry_Powell

zygurat789 wrote: »

The idea has been around for a long time but Gordon brought them in.
HMRC do require you to inform them if circumstances change so that they can change the assessment.
Trouble with themis:-
There are inherent problems giving people money for nothing.
The administration is appalling. I believe they gave billions to the Russian !!!!! in fraudulent claims.
They are far too generous.
The answer is to ensure it is possible to earn a living wage. The NMW is totally pathetic but businesses winge every time it goes up and tax credits is the result.

I dont understand why they dont use the tax free allowance more. It seems we all get the same maximum amount and then it's whittled away if you have benefits such as a company car and BUPA. Why couldn't they just have increased it for people who have children? It could at least have replaced the WTC. It'd encourage people to work and wouldn't be as open to organised crime.

Same with Child benefit, they should just increase people's tax free allowances by the CB amount. Why have the expense of taking tax money off people to then just give it back. Don't take it away in the first place!!

zygurat789

Harry_Powell wrote: »

I dont understand why they dont use the tax free allowance more. It seems we all get the same maximum amount and then it's whittled away if you have benefits such as a company car and BUPA. Why couldn't they just have increased it for people who have children? It could at least have replaced the WTC. It'd encourage people to work and wouldn't be as open to organised crime.

Same with Child benefit, they should just increase people's tax free allowances by the CB amount. Why have the expense of taking tax money off people to then just give it back. Don't take it away in the first place!!

we had this, the problem was the ones who needed it, the not so well paid, didn't pay any tax and therefore didn't get any benefit.
What we need is a guaranteed living wage then we wouldn't have to pay all these benefits and taxation could be reduced - it's called a virtuous circle

Elaine_Wilson

lemonjelly wrote: »

The only welfare benefit that we have that doesn't correspond to your actual current circumstances, but is actually based on your income in the previous tax year.

So your income goes down now, you need help now. What happens? They assess your entitlement based upon last year, whilst you had a good income/lots of overtime! Idiotic.

Lets look at it another way. They assess last years income to calculate what you'll get. Then, at the end of the tax year, they'll re-assess your claim. (Brilliant, so already they have to look at every claim at least twice!) Now, most people will get some form of standard of living increase. So their actual award will be based on an income lower than what they will actually get. Result? The majority of people will be overpaid, and therefore will have a debt at the end of the year.

It is idotic. & to my mind, it'll get worse.

It may be a lack of communication but this is not the way Working Tax Credit works.

The tax credit is based on the income of the year of claim. A provisional assessment is based on the previous year, then reviewed at the end of the year.

If your income falls during the year you can ask for the award to be reviewed and based upon your estimate of the actual anmount to be earned.

If you wait until the year end and the normal review one of two things can happen.

If your actual income is less than the previous year then an additional award is made.

If your income has risen then nothing is clawed back unless the increase is more than £25,000.

Where are these people getting cost of living increases in excess of £25,000?

Generali

Harry_Powell wrote: »

I dont understand why they dont use the tax free allowance more. It seems we all get the same maximum amount and then it's whittled away if you have benefits such as a company car and BUPA. Why couldn't they just have increased it for people who have children? It could at least have replaced the WTC. It'd encourage people to work and wouldn't be as open to organised crime.

Same with Child benefit, they should just increase people's tax free allowances by the CB amount. Why have the expense of taking tax money off people to then just give it back. Don't take it away in the first place!!

I agree with you.

FWIW, the argument is that the broader the tax base (that is the more people that pay tax) the greater stake more people feel they have when they come to vote rather than just voting for whoever is going to increase Government spending the most.

Arcaine

Any change to Capital Gains Tax will raise very little. HMRC Tax receipts in 07/08 were £451 Billion, of which £5.3 Billion was capital gain.

Source http://www.hm-treasury.gov.uk/psf_statistics.htm

This is the Government trying to win votes and tinkering around the edges of the tax system. This may bring in around £1-2 billion a year more.

Harry_Powell

Arcaine wrote: »

Any change to Capital Gains Tax will raise very little. HMRC Tax receipts in 07/08 were £451 Billion, of which £5.3 Billion was capital gain.

Source http://www.hm-treasury.gov.uk/psf_statistics.htm

This is the Government trying to win votes and tinkering around the edges of the tax system. This may bring in around £1-2 billion a year more.

Which is exactly the sort of pre-election vote winner that Labour are looking for. A tax on the wealthy that has no impact on the lower paid, but combined with a few other small measures make it look as though the government has everything under control.

As you quite rightly say, there will be little or no impact on the national debt from this, but then there will be little or no impact on Labour voters either. Once the election is over (and if labour win), then the fun starts.

Thrugelmir

Arcaine wrote: »

Any change to Capital Gains Tax will raise very little. HMRC Tax receipts in 07/08 were £451 Billion, of which £5.3 Billion was capital gain.

Source http://www.hm-treasury.gov.uk/psf_statistics.htm

This is the Government trying to win votes and tinkering around the edges of the tax system. This may bring in around £1-2 billion a year more.

It isn't so much a measure to raise tax, but stop legimate avoidance.

If CGT rates aren't raised expect tax accountants to find ways around the new 50% income tax rate.