2% Drop in Income tax (all a con) and NI

ashcarrot

So the 2% drop is covered by the removal of the 10p tax range (ie people paying 10% will be paying 20p) but this NI I can't find info on, apparantly middle income people (myself) will be paying at the full rate of ni or something? sounds like im gonna be taking home less coz of this.

joebloggs69

Yep, great news for me (sarcasm), a student on a wage of £7600 a year, instead of paying £300 a year (mostly at 10%) I get to pay £500 - and no tax credits for me cos I decided not to drop a few sprogs to get a council flat - yay!

Gambler

what's this about NI?

sunny_money_2

i look at this way , as said in press next gordon becomes prime mininster , general elaction late in year , then council tax bands get re done , so for me next year save £10 a week in tax and at later date my council tax will rise by £10 a week
the old saying give with one hand take with the other !!!

ashcarrot

Right calculations so far: (probabily a bit off)

Based on todays allowances:

5030 Allowance (earn under that no probs)

earn between 5030 and 15k and you will be worse off (to make up on the difference of increase of 10% on the first 2k) <-- thats right isn't it

15k -> 33540k and you should be better off slightly (more so the higher to the 33540 you get)

after that if NI thresholds are increasing to 11% from 1% (can't find any data on anything to doing with this.. so may and hope to be wrong) then you will be considerably worse off?

brazilianwax

Gambler wrote: »

what's this about NI?

It's being aligned with the higher rate of tax. So higher earners will pay NI on an additional £75 of income a week.

jmf76

No idea on the NI front but I think (correct me if I'm wrong ), based on 2006/07 tax rates, if you earn less than £17,935 you'll pay slightly more tax anything more you'll pay slightly less. I guess this is higher for 07/08 rates, but I'll let someone else work that one out!

WHA

The NIC appears to be a real disaster for some people. GB managed to make it sound a good thing that the earnings limits for higher rate tax and NIC were to be alligned at £43,000. Whilst this does push the limit upwards for the payment of higher rate tax, it actually INCREASES the amounts of earnings that are liable to national insurance, the upper limit currently being around £33,000. Employers NIC is 11%, so it basically means an employee will be paying £1,100 p.a. more in NIC (i.e. £10,000 at 11%) - though this does need balancing against the tax cuts. So, basically if you are earning between £38k and £43k p.a., yes, you will save higher rate tax, but you will pay more employees NIC. Another sleight of hand!!!!

Bogof_Babe

Why did he not even mention the 2007-8 tax free personal allowance? Higher rate is kicking in at £43K but not one word about basic rate. Surely he can't be freezing it at £5,035 same as this year?

On the Savings board a few weeks ago someone posted a link to next year's allowances, which surprised me because I always thought they were only announced on budget day. I'm sure he has always stated the revised amount in the past.

Petmidget

My favourite was the 2% drop in headline CT rates very nice for major Plc's but a 3% rise in Small Companies Rate, stiffing 5 million small businesses.

I heard all in car so havent seen any detail yet. But didnt seem to be any decent bits in there.

jmf76

Bogof_Babe wrote: »

Why did he not even mention the 2007-8 tax free personal allowance? Higher rate is kicking in at £43K but not one word about basic rate. Surely he can't be freezing it at £5,035 same as this year?

On the Savings board a few weeks ago someone posted a link to next year's allowances, which surprised me because I always thought they were only announced on budget day. I'm sure he has always stated the revised amount in the past.

Next year's levels are already set - http://www.hmrc.gov.uk/rates/it.htm
It will be £5,225.