The Great Pension Liberator

Thrugelmir

With a commitment not to raise income tax, VAT and NIC. While raising personal tax allowances and higher rate tax threshold. Obvious area of attack is tax reliefs. With some 1,000 on the statute books must be an area that Osborne is looking at in order to increase tax revenue.

kidmugsy

Thrugelmir wrote: »

With a commitment not to raise income tax, VAT and NIC. While raising personal tax allowances and higher rate tax threshold. Obvious area of attack is tax reliefs.

Taxes will rise, and, as you say, he's confined his options severely. Pensions and houses are obvious targets, but probably don't appeal to Osborne. But needs must. If he wants to cut pension tax relief on high earners I'd have thought that reducing their annual allowances was a lesser evil than reducing their % tax relief, or reducing the LTA.

I'm interested in A J Bell's suggestion that LTA should apply only to DB pensions, and annual allowance only to DC.

Still, the whole edifice could come tumbling down whatever he does. The great credit crisis (as engineered by Greenspan at the Fed), and our peculiar vulnerability to it (as engineered by Brown) leaves us pretty exposed. And then there's our vulnerability to brownouts in the winter, as engineered by Ed Miliband and Ed Davey (and, madly, tolerated by Cameron). They may yet regret winning this election. On the other hand, maybe the world will muddle along.

zagfles

Thrugelmir wrote: »

With a commitment not to raise income tax, VAT and NIC. While raising personal tax allowances and higher rate tax threshold. Obvious area of attack is tax reliefs. With some 1,000 on the statute books must be an area that Osborne is looking at in order to increase tax revenue.

Yes there's a good chance they'll go even further than the manifesto pledge of reducing the AA for those on £150k+ which is just a gesture anyway - I doubt it'd raise much.

I think it's quite likely they'll stop higher rate relief on pension contributions, particularly as they're raising the HRT threshold to £50k. It would be an excellent short term way of reducing the deficit, since pension contributions would suddenly become far less attractive to those paying higher rate tax. So the exchequer would gain not just from the tax relief change itself but also the change in behaviour.

kidmugsy

He must be considering some sort of limit on ISAs: maybe a lifetime contribution limit? It would not be easy to run, perhaps.

I half-remember Nigel Lawson saying that taxes should be low and hard to avoid.

How about Capital Gains Tax? Really, capital gains should be index-linked, as they used to be; could he reintroduce index-linking while either (or both) decreasing the annual allowance and increasing the rate a little? Can they bring in enough to be worth fiddling with?

Or he could be revolutionary and move towards a land value tax.

And all this against a background that increasing a tax rate is a good deal easier than increasing a tax take. Oh well, he wanted the job.

zagfles

kidmugsy wrote: »

He must be considering some sort of limit on ISAs: maybe a lifetime contribution limit? It would not be easy to run, perhaps.

I half-remember Nigel Lawson saying that taxes should be low and hard to avoid.

How about Capital Gains Tax? Really, capital gains should be index-linked, as they used to be; could he reintroduce index-linking while either (or both) decreasing the annual allowance and increasing the rate a little? Can they bring in enough to be worth fiddling with?

Or he could be revolutionary and move towards a land value tax.

And all this against a background that increasing a tax rate is a good deal easier than increasing a tax take. Oh well, he wanted the job.

Tweaking ISAs would raise practically nothing. I doubt they'd tax land/houses as they didn't want the mansion tax and seem to be totally against anything which would stop house prices rising. In fact they're lowering tax on houses with the IHT housing allowance.

Maybe they need to find something new to tax, here's an idea

http://www.youtube.com/watch?v=pmgcylAxjfY

Thrugelmir

There's the change to National Insurance Rates from April 2016 in the pipeline. When previously contracted out employees will start paying full rate employee contributions. This alone more or less impacts the entire public sector.

zagfles

Thrugelmir wrote: »

There's the change to National Insurance Rates from April 2016 in the pipeline. When previously contracted out employees will start paying full rate employee contributions. This alone more or less impacts the entire public sector.

And is the bargain of the century for public sector employees, but I'm sure they'll whine about it...

chucknorris

kidmugsy wrote: »

He must be considering some sort of limit on ISAs: maybe a lifetime contribution limit? It would not be easy to run, perhaps.

I half-remember Nigel Lawson saying that taxes should be low and hard to avoid.

How about Capital Gains Tax? Really, capital gains should be index-linked, as they used to be; could he reintroduce index-linking while either (or both) decreasing the annual allowance and increasing the rate a little? Can they bring in enough to be worth fiddling with?

Or he could be revolutionary and move towards a land value tax.

And all this against a background that increasing a tax rate is a good deal easier than increasing a tax take. Oh well, he wanted the job.

I totally agree with index linking of CGT, it is very unfair to tax nominal profits that could actually be 'real term' losses when inflation was taken into account.

I also suspect that a LTA may be introduced to ISA's at some point, I wouldn't welcome it, but I can certainly see the logic of doing it.

chucknorris

zagfles wrote: »

And is the bargain of the century for public sector employees, but I'm sure they'll whine about it...

Not me, even after the recent changes, I think that the TPS (teachers' pension scheme) is still a fantastic deal. Personally I don't think that they went far enough, and they will have to re-visit public sector pensions, I think that they are still unsustainable. Obviously that is an observation, rather than a whine.

zagfles

chucknorris wrote: »

Not me, even after the recent changes, I think that the TPS (teachers' pension scheme) is still a fantastic deal. Personally I don't think that they went far enough, and they will have to re-visit public sector pensions, I think that they are still unsustainable. Obviously that is an observation, rather than a whine.

Sorry didn't mean all of you, but I'm sure we'll have some people on here whining about it...but not the clued up ones!