MSE News: Summer Budget 2015: Income taxes to be cut

in Cutting Tax
6 replies 1.5K views
The Chancellor is to bring forward planned increases to both the personal allowance and the higher rate tax thresholds...
Read the full story:

Summer Budget 2015: Income taxes to be cut

OfficialStamp.gif


Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

Replies

  • zygurat789zygurat789 Forumite
    4.3K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    Helen, may I just ask why does a person's personal allowance depend upon their salary?
    I think it is only fair to Georgie boy, to point out that he is going to pass a law saying that he can't increase rates of National insurance next year, but then why would he want to because if he increases the higher rate tax threshold he gets 12% NICs on income below the threshold but only 2% on income above it.
    The only thing that is constant is change.
  • TomJTomJ Forumite
    213 Posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    zygurat789 wrote: »
    Helen, may I just ask why does a person's personal allowance depend upon their salary?

    It doesn't. You have a personal allowance which isn't taxed, and everything above is.
    I think it is only fair to Georgie boy, to point out that he is going to pass a law saying that he can't increase rates of National insurance next year, but then why would he want to because if he increases the higher rate tax threshold he gets 12% NICs on income below the threshold but only 2% on income above it.

    But as the NI Upper Earnings Limit is moving in line with the higher rate of income tax threshold while there's 10% more in NICs, there's 20% less income tax.
    I am not a financial advisor or other expert. All posts are purely my thoughts at the time for discussion, not advice. Bear in mind, even most of this disclaimer is ripped off another forum user. Please check out the facts first before doing anything.
  • Purplesky_2Purplesky_2 Forumite
    152 Posts
    Mortgage-free Glee!
    Actually Tom J, I think the personal allowance might be tweaked or eliminated somewhere around the £150k-£200k mark.
  • TomJTomJ Forumite
    213 Posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    Good point, well presented. The personal allowance withdrawal is such a daft distortion of the already overly complicated tax system (plus not something likely to affect me in the immediate future) I edited it out of my head. mea maxima culpa.
    I am not a financial advisor or other expert. All posts are purely my thoughts at the time for discussion, not advice. Bear in mind, even most of this disclaimer is ripped off another forum user. Please check out the facts first before doing anything.
  • zygurat789zygurat789 Forumite
    4.3K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    TomJ wrote: »
    It doesn't. You have a personal allowance which isn't taxed, and everything above is.



    But as the NI Upper Earnings Limit is moving in line with the higher rate of income tax threshold while there's 10% more in NICs, there's 20% less income tax.

    The very points I was making. Have you read the article?
    The only thing that is constant is change.
  • zygurat789zygurat789 Forumite
    4.3K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    Purplesky wrote: »
    Actually Tom J, I think the personal allowance might be tweaked or eliminated somewhere around the £150k-£200k mark.

    Exactly, tthe PA does not depend on salary
    The only thing that is constant is change.
This discussion has been closed.
Latest MSE News and Guides

Stoozing, sublets & summer sips

This week's MSE Forum highlights

MSE News

Martin Lewis quizzes Rishi Sunak

Watch the cost of living support Q&A here

Join the MSE Forum discussion

48 craft beers for £50 delivered

One-off bundle for newbies. Excludes Northern Ireland

MSE Deals