New higher tax bracket

investing

ceeforcat wrote: »

ceeforcat: I love your definition of 'middle income'

I'll let it go here - still can't see how you managed to guage that it is my definition or that I defined your income as 'high' when I didn't mention the word but there's more to life .....

Maybe I've misread, apologies if I did but I thought you did say: " Middle income being squeezed to death it would appear."

sunshinetours

lazer wrote: »

Everyone does need to contribute their share, but not more than their share
With the increase in VAT, increase in NI, new 50% tax bracket (For the very high earners), and the lose of child benefits - the 'weatlhy' have already contributed more than their fair share.
If its the welfare system that is broken - it is the welfare system that needs fixed, not the employment tax system.

You cannot fix one without the other, surely you can see they are hugely inter linked. "Higher" / "Middle" earners whatever you wish to call them do have more capacity than extreme low earners to contribute - can't believe that is being argued?

investing wrote: »

I don't want to sound like a whining person but I'm sure that cuts could be made to the welfare system (for those claiming nicer houses than myself if they have a big family) rather than taxing the middle income earners more.

I do my very best to save my money and the extra £200-£300 a year could be considered a real treat for me to buy something I like - something I haven't done for a long long time.

Cuts are being made to the welfare system along with all public sectors - surely you must have read about this?

Getting your head around a country's "accounts" is pretty mind boggling because of the way that taxes and benefits interact with each other and how different taxes interact with each other . ie raise direct taxation (PAYE or NI) and watch indirect taxation such as VAT receipts fall as people spend less

investing

sunshinetours wrote: »

You cannot fix one without the other, surely you can see they are hugely inter linked. "Higher" / "Middle" earners whatever you wish to call them do have more capacity than extreme low earners to contribute - can't believe that is being argued?



Cuts are being made to the welfare system along with all public sectors - surely you must have read about this?

Agreed, to be honest - the difference in £200 isn't exactly going to take me to the poor house nor it will change my lifestyle but it's just that I try to hard to save, not buying new gadgets (and resisting) and all the years effort goes with a simple tax hike.

sunshinetours wrote: »

Getting your head around a country's "accounts" is pretty mind boggling because of the way that taxes and benefits interact with each other and how different taxes interact with each other . ie raise direct taxation (PAYE or NI) and watch indirect taxation such as VAT receipts fall as people spend less

Agreed also, I'm sure it's more complex than I had described it and that cuts are already being made to all sectors. It's just that everything has been increased in order to mend the broken system. I am however also sure that some people are paying for this broken system more so than others.

ceeforcat

The welfare system is a disatrous minefield. There are some who pay almost 72% tax on each additional pound of income (losing tax at 20%, NIC at 11% and tax credits at 41%) which is no incentive to work. Imagine a friend of mine who has five children and,next year, will get £1000 increase in his salary bringing him just in higher rate tax . As it stands he will lose all of his child benefit (for five children, remember) and lose 52% tax and NIC. He is currently trying negotiate a pay freeze.

investing

ceeforcat wrote: »

The welfare system is a disatrous minefield. There are some who pay almost 72% tax on each additional pound of income (losing tax at 20%, NIC at 11% and tax credits at 41%) which is no incentive to work. Imagine a friend of mine who has five children and,next year, will get £1000 increase in his salary bringing him just in higher rate tax . As it stands he will lose all of his child benefit (for five children, remember) and lose 52% tax and NIC. He is currently trying negotiate a pay freeze.

I love it, trying to negotiate a pay freeze... what a way to slow down the economy.

ceeforcat

I should, of course, clarify that the changes to child benefit come in 2013. My friends salary increase of £1000 will cost him £3842 in child benefit on current rates and £520 in tax leaving him £3362 worse off per annum

investing

When was this law (lower tax threshold) pass?

I am surprised not hearing more about it in the media and no one making a huge deal of it.

sleepless_saver

investing wrote: »

When was this law (lower tax threshold) pass?

I am surprised not hearing more about it in the media and no one making a huge deal of it.

It was announced before the Budget. For most people it doesn't make a lot of difference as it is largely cancelled out by the increase in personal allowance which is why you won't have seen a lot of fuss.

The effect is to increase the income of basic rate taxpayers because of the increase in personal allowance. The threshhold for higher rate tax has been reduced to stop those tax payers benefiting from the personal allowance increase.

Mikeyorks

investing wrote: »

When was this law (lower tax threshold) pass?

It was announced in the emergency budget in June 2010.

investing

hmmm at the time I was still under the threshold so I guess that's why I didn't mind.... now I'm over!