Will savers take a hit with the 30% flat tax..

coastline

A proposal thats been in the press in the last few days...
Simplify our system...NI...VAT...CG...Income tax...
Our savings are taxed at 20% now so we may be in for another bad day...any views..

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9202370/Osborne-urged-to-introduce-30pc-income-tax-for-all.html

http://www.myfinances.co.uk/savings/2012/05/21/tax-commission-calls-for-30-flat-tax-rate-on-income-and-capi

Graham_Devon

You'd have to weigh it up against the increased tax allowance.

IronWolf

Interesting, I hadn't really thought about how it effects income in the form of interest, dividends and capital gains, which are traditionally taxed much lighter (which benefits the rich mostly, but liberal joe public doesnt seem to realise that and instead complains about the top rate of income tax being cut )

In theory I am in favour of NI and income tax being merged. Im not in favour of scrapping VAT as I believe a consumption tax is one of the best ways to stop businesses avoiding tax, and making foreign business contribute to the UK treasury. It is also to the benefit of savers who dont blow all their money.

coastline

well its ended up on this part of the forum..never mind...but plenty to talk about I suppose..

ukcarper

Should go down well with pensioner.

grizzly1911

I'll believe when I see it.

BBC reports tax savings of £3240 for a low earning couple. HMRC are not going to give that amount away to so many.

No problem with merging NI and PAYE for the employee it is the same thing to Jo(e) Public. and the Govt. washes it all together in reality.

Interesting point about unearned income though.

StevieJ

ukcarper wrote: »

Should go down well with pensioner.

Yes, they seem to be under all out attack, then again I suppose the 'fat cats' of the the IOD and taxpayers alliance don't really care

I like this comment:)

So having paid NI for 42 years (12 of which get me sweet fa ).
I would now pay 10% more income tax -where do I sign up ...

Graham_Devon

ukcarper wrote: »

Should go down well with pensioner.

Which pensioners? Normal pensioners won't suffer much, probably won't even notice it. Have to have a fair chunk of svaings at todays rates to even get taxed in the first place.

grizzly1911

Graham_Devon wrote: »

Which pensioners? Normal pensioners won't suffer much, probably won't even notice it. Have to have a fair chunk of svaings at todays rates to even get taxed in the first place.

Depends what you class as a normal pensioner, if you mean somone who gets the basic state pension then probably yes. Even if they do have savings they would be better blowing most of them. .

If a normal pensioner is one with a modest pension form employment then they will get hit pretty quickly too.

of course it doesn't matter that they have already been taxed on their income to amass the savings, then they are taxed on again on the interest.

Then they wonder why pension provision is lower than ever.

ILW

Haven't you heard? The BoE hate savers and seem to want them punished at every opportunity.

MacMickster

Graham_Devon wrote: »

Which pensioners? Normal pensioners won't suffer much, probably won't even notice it. Have to have a fair chunk of svaings at todays rates to even get taxed in the first place.

What I would regard as "normal" pensioners - those with a private or occupational pension in addition to the state pension - would pay significantly more. Currently they pay 20% tax on income over their personal allowance, but no national insurance contributions. Consequently they would see a 50% increase in their tax bill.