TAX CUTS for 25 million people in Emergency budget

HAMISH_MCTAVISH

The tax-free personal allowance will be raised by at least £700 to more than £7,000 under plans by the Liberal-Conservative coalition — a move that will benefit an estimated 25 million lower-paid workers and pensioners.

Tax cuts for 25 million people earning less than 35K.

Those earning over 40K will pay very slightly more, due to the NI increase.

Taking the income tax cut and National Insurance rise together, someone earning £10,000 will be £254 better off while someone earning £20,000 will save £154 in tax. But someone earning £50,000 will pay £286 more in tax from next year and someone on £100,000 will pay an extra £786.

http://www.telegraph.co.uk/news/newstopics/politics/7721618/Coalition-government-tax-cuts-of-140-for-workers-on-basic-rate.html

I think this is a pretty good idea.

I wouldn't even notice paying a few hundred quid more a year in tax, but the tens of millions on lower incomes will feel a real benefit from more disposable income.

Not the cuts the doomers had in mind for this emergency budget......:D

LydiaJ

I still find it staggering that after 13 years of Labour government, the first thing a mainly Tory administration feels it is necessary to do is bring in redistributive tax changes. Labour supporters should be asking what their party has been doing for the last decade and a bit.

jackieb

I'm okay with that.

tomterm8

It's spin, isn't it? They are raising VAT at the same time, so most of this saving doesn't make anyone 'better off', it just counteracts other tax rises.

Emy1501

HAMISH_MCTAVISH wrote: »

Tax cuts for 25 million people earning less than 35K.

Those earning over 40K will pay very slightly more, due to the NI increase.

http://www.telegraph.co.uk/news/newstopics/politics/7721618/Coalition-government-tax-cuts-of-140-for-workers-on-basic-rate.html

I think this is a pretty good idea.

I wouldn't even notice paying a few hundred quid more a year in tax, but the tens of millions on lower incomes will feel a real benefit from more disposable income.

Not the cuts the doomers had in mind for this emergency budget......:D

Aren't they going to pay for this in part by keeping labours plan to increase NI for employee's? Also they tax cuts will simply mean cut in other areas.

The huge cuts are coming whether people like it or not.

Pennywise

There's a massive problem with lower earners and tax credits etc. It's just not worthwhile to work a few hours more or to take a minor promotion etc due to potentially being worse off due to tax/NIC on the higher wage, reduced tax credits and potential loss of other benefits. Reducing taxes for the lowest paid will be a small movement towards making it more worthwhile to either get a job, work longer or accept a slightly better paid job. They're bang on the money with this - probably goes nowhere near far enough, but a very good start at dismantling Gordon Brown's Tax Credit trap.

Jonbvn

LydiaJ wrote: »

I still find it staggering that after 13 years of Labour government, the first thing a mainly Tory administration feels it is necessary to do is bring in redistributive tax changes. Labour supporters should be asking what their party has been doing for the last decade and a bit.

I don't usually like to agree with anyone - cos that's the way I am! However, "this lot" seem to be setting policies that anyone with a modicum of common sense would find difficult to argue with. The whole tax-credit thing is a complete bureaucratic nightmare.

The "it's only spin" chants coming from the liebour supporters is almost inevitable, given that it's all they've ever known. I would suggest that they concentrate on choosing a new team manager and their team selection, before they think of promotion.

marklv

LydiaJ wrote: »

I still find it staggering that after 13 years of Labour government, the first thing a mainly Tory administration feels it is necessary to do is bring in redistributive tax changes. Labour supporters should be asking what their party has been doing for the last decade and a bit.

Hardly resdistributive, we are talking small change here. Anyway, lifting the personal allowance is fairer and encourages more people to go for relatively low paid jobs. A good idea, in my view.

marklv

tomterm8 wrote: »

It's spin, isn't it? They are raising VAT at the same time, so most of this saving doesn't make anyone 'better off', it just counteracts other tax rises.

VAT in most EU countries is around the 20% mark. The alternative is higher income tax - what would you rather have?

lemonjelly

Emy1501 wrote: »

Aren't they going to pay for this in part by keeping labours plan to increase NI for employee's? Also they tax cuts will simply mean cut in other areas.

The huge cuts are coming whether people like it or not.

I believe that they are keeping employees increased NI's.

Interestingly, employers NI increases have been cancelled...

mitchaa

A £700 rise in the personal allowance threshold would equate to a maximum of £140. (20% of £700) Where are they getting £254 from?

There was an article printed by the mail yesterday that suggested the threshold was going to be raised by £1000 upto £7475 with an increase in NI by 1% coming in at £20k+

So anyone earning upto £20k would be better off to the tune of £200 and then the NI hike would mean that £200 was taken away upto earnings of £40k. I.e someone earning £24k would be £160 better off, someone earning £30k would be £100 better off. At £40k it would break even.

There's some fine tuning to be done I think. We are being conned by this personal allowance nonsense anyway. The Lib Dem mandate was to bring in a £10k allowance, we are now being told that this is going to be spread over a number of years. That isn't quite the same though as there would be increases in the thresholds every year anyway. We did not get 1 this year however, they kept it frozen.

We are now being told £10k in 5yrs time, instead of £10k next year + inflation afterwards upto that 5yr point.

Slightly different.