MSE News: Budget 2012: Personal tax allowance to rise

thelawnet

EvieSaver wrote: »

"HMRC say that most basic rate taxpayers gain by £170 in real terms, higher rate taxpayers gain by £42.50 when a reduction in NICs is taking into account."

What reduction is this? Does anyone know?

The NI threshold goes from £146/wk to £152/wk. The UEL is being reduce from £817/wk to £796/wk.

So

2012-13
NI: £146-£817/wk @ 11%, above that 2%
IT: £8105 @ 0%, £34,370 @ 20%, above that 40%

2013-14
NI: £149-£796/wk @ 11%, above that 2%
IT: £9205 @ 0%, £32,245 @ 20%, above that 40%

[Deleted User]

jimmo wrote: »

No, In April 2012 your allowance will go up to £8105.

In April 2013 it will go up to £9205.

In April 2012 your friends age related allowance will go up to £10,500

And then be frozen.




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



http://www.hm-treasury.gov.uk/budget2012_fair_efficient_tax.htm

Thank you jimmo - It looks as if you have answered my question which I posted as a new post before reading this thread - Am I correct in thinking that the £10500 tax free allowance will still apply to those eligible for the first time in the tax year 2012-13.

As my post says I wondered if it would frozen at the £9940 level for 2011-12 onwards. If, as you say, the 2012-2013 level of £10500 applies that will be better news for me.

Thank you,

Crimson

molley

Deleted_User wrote: »

Thank you jimmo - It looks as if you have answered my question which I posted as a new post before reading this thread - Am I correct in thinking that the £10500 tax free allowance will still apply to those eligible for the first time in the tax year 2012-13.

As my post says I wondered if it would frozen at the £9940 level for 2011-12 onwards. If, as you say, the 2012-2013 level of £10500 applies that will be better news for me.

Thank you,

Crimson

Tax codes for 12-13 have already been issued and mine says £10,500

[Deleted User]

molley wrote: »

Tax codes for 12-13 have already been issued and mine says £10,500

As the rate for 65+ is being frozen do you think the 12-13 rate will still apply (10,500) - or could they change it by freezing it at the 2011-12 level of £9940? Like you, molley, I have received the Tax Code but I wonder if they can change it retrospectively because of the budget announcement about freezing it.

I apologise if I'm not being very clear but I hope you know what I mean. Thank you.


Crimson

Rollinghome

Deleted_User wrote: »

As the rate for 65+ is being frozen do you think the 12-13 rate will still apply (10,500) - or could they change it by freezing it at the 2011-12 level of £9940? Like you, molley, I have received the Tax Code but I wonder if they can change it retrospectively because of the budget announcement about freezing it.

I apologise if I'm not being very clear but I hope you know what I mean. Thank you.

From the budget document:

To simplify the tax system while diversifying the tax base and improving medium-term sustainability the Government will: move towards a simpler, single personal allowance regardless of age by freezing existing age-related allowances (ARAs) from 6 April 2013 at their 2012–13 levels (£10,500 for those born between 6 April 1938 and 5 April 1948, and £10,660 for those born before 6 April 1938) until they align with the personal allowance. From April 2013, ARAs will no longer be available, except to those born on or before 5 April 1948. The higher ARA will only be available to those born on or before 5 April 1938.

So while the personal allowance will go up for those under 65, the age allowance will stay the same and just wither away.

[Deleted User]

Rollinghome wrote: »

From the budget document:
So while the personal allowance will go up for those under 65, the age allowance will stay the same and just whither away.

Thank you very much Rollinghome - your post has made it totally clear and I really appreciate it.

Crimson

DundeeDoll

I think i'll just wait and see what happens to my pay packet. For us we've turned our finances round from spending more than we earn every month :eek: to spending within earnings, even having a bit left over, all thanks to OS :money: :T :T :T

molley

Rollinghome wrote: »

From the budget document:
So while the personal allowance will go up for those under 65, the age allowance will stay the same and just whither away.

I'm still a bit confused but as I was born in 1943 does that mean ( as it seems to be saying) I'll continue to get the ARA from 2013.

Boposop

Does anyone know ...

Is the personal allowance being reinstated for incomes >100k or not?

Thanks.

maykopg

It has been said that the state pension will be the same for everyone ie £140 per week. At present I receive a portion of my late husbands state pension as he died aged 57, does anyone know if I will lose this in the event of an across the board £140