Tax Credits

Thrugelmir

WannaBLoaded wrote: »

I don't think upping the minimum wage will help all that much, i think prices have gotten out of control.

We'll need higher wages and lower prices, won't happen!

Prices for what?

lisyloo

difference between paying into pension to minimise tax (on way in, you still pay on way out) and paying into pension in order to maximise a benefits claim (benefits intended for those on low incomes)

Right, so you are saying that it's your personal morals that everyone should apply?
You've just demonstrated one issue.

It shouldn't be up to individuals to guess what the intention of the rules are. The rules should be clear. If they don't want salary sacrifice to count it's very easy, just exclude it from the calulations. One has to assume therefore that the system is set up as intended.

setmefree2

According to the Treasury:-

“The 10 per cent of tax credit claimants on the highest incomes are contributing nearly four times as much as the poorest tax credit claimants to welfare savings. Average household income in the richest 10 per cent of tax credit claimants is £42,000 per year; significantly above average household income of £25,000 per year. Sixty per cent of the tax credit savings come from the half of tax credit claimants with the highest income.”

I think that means those earning £42,000 are contributing 4 times as much to the cuts as the poorest.
60% of the tax credit saving comes from the top 50% of earners.

zagfles

setmefree2 wrote: »

Came across this old story.

http://www.dailymail.co.uk/news/article-2255138/Abuse-tax-credits-cost-10billion-says-IDS-blistering-attack-Labour-welfare-policy.html

http://www.telegraph.co.uk/news/politics/9772132/Britain-hit-by-10bn-tax-credit-fraudsters-claims-Duncan-Smith.html

http://www.independent.co.uk/news/uk/politics/iain-duncan-smith-launches-scathing-attack-on-tax-credit-abuse-8433854.html

Well he's had over 5 years to "fix" it. I'd expected him to introduce capital rules to tax credits at least, UC will have them and it'd ease the transition.

The govt are fully aware that some people take the p out of the system perfectly legally, but it's probably so few that it's not worth changing the rules.

They lose far more to fraud eg people pretending to be self employed so they can get WTC instead of having to sign on for JSA, people who are really self employed but not declaring all their income, and people who pretend they're single when living with a partner.

Graham_Devon

Mistermeaner wrote: »

No Michaels is a nett taker. A leach on society - no personal hard feeling but he manipulates the system to his families advantage. If everyone did as Michaels the UK would be an awful place.

I don't wish to get into a personal argument, I've already had that with michaels before now on this subject and I regret I did probably go to far.

The thing that annoys me is that combine everyone doing this and it's the reason the welfare bill needs reducing.

My personal stance is I cannot stand the fact that the system can be abused in such a way and people openly state they abuse it....it only leads to the inevitable reductions across the board hurting those who really need those tax credits. The same happened with food banks, and it's led to the inevitable bureaucracy in many areas where you now need tickets to get the food, jumping through humiliating hoops, as greedy individuals took advantage of a system set up to help those with lesser means.

People are now set to lose significant sums of money from tax credits. It will mean people lose the roof over the head in some cases and charities are already getting overwhelmed with pleas for help. This is usually from the single parent worker who has children.

I think it's simply unfortunate and morally obscene that the wealthy can take advantage of a system in such a way, knowing full well that it means those with the smallest means lose out and suffer quite significantly.

The most bizzare thing about all of this is all those that are supporting this "scheme" are vehemently apposed to stuff such as council housing, which they see as people getting a "subsidy". Hypocritical beyond belief.

Blue22

michaels wrote: »

According to this:

http://www.ons.gov.uk/ons/dcp171766_305977.pdf

20% of households aged 50-64 have higher value pension pots than I do so have probably benefited from more tax releif than I have.

I know nothing of your circumstances but the reason I have a large pension pot is because I minimise my expenditure. No Sky, no iphone, holidays with relatives in the UK, value line food, cheapest mortgage rate etc as I value being financially secure over such things. Other lifestyle preferences are available and equally valid, complaining that I have more savings whilst not recognising what I have gone without to acheive them is not.

Thank you for taking the time to reply.

Ok your points, I don't agree that the majority of those households with pension pots over 200k, have benefited more than you. If they have been paying in over their working lifes, ie since the 70s or 80s, a large proportion of that pension fund may be the result of growth. I estimate over that time scale someone may have paid a total of 50-60k in contributions, so maybe 10-15k tax relief?

I only mentioned my circumstances to assure you that I wasn't 'one of those' that had benefited more than you and I'm certainly not complaining that others have more. I have the utmost respect for many people who have 'done well for themselves' through hard work and dedication.

And on your last point, that the size of your pension pot is down to your thriftiness. Oh come on, you are kidding yourself here. It may be partly due to your frugal lifestyle but the majority of it is due to you claiming tax relief on your pension contributions and being given 15k in benefits that you don't need.

Anyway, thank you for letting me have my say without jumping down my throat. I think that's what puzzles me the most, you 'sound' like such as a nice chap but then you openly admit to working the system, in a way that I find morally obscene.

Mistermeaner

Graham_Devon wrote: »

I don't wish to get into a personal argument, I've already had that with michaels before now on this subject and I regret I did probably go to far.

The thing that annoys me is that combine everyone doing this and it's the reason the welfare bill needs reducing.

My personal stance is I cannot stand the fact that the system can be abused in such a way and people openly state they abuse it....it only leads to the inevitable reductions across the board hurting those who really need those tax credits.

People are now set to lose significant sums of money from tax credits. It will mean people lose the roof over the head in some cases and charities are already getting overwhelmed with pleas for help. This is usually from the single parent worker who has children.

I think it's simply unfortunate and morally obscene that the wealthy can take advantage of a system in such a way, knowing full well that it means those with the smallest means lose out and suffer quite significantly.

The most bizzare thing about all of this is all those that are supporting this "scheme" are vehemently apposed to stuff such as council housing, which they see as people getting a "subsidy". Hypocritical beyond belief.

First time I've agreed with anything you've said!

Mistermeaner

lisyloo wrote: »

Right, so you are saying that it's your personal morals that everyone should apply?
You've just demonstrated one issue.

It shouldn't be up to individuals to guess what the intention of the rules are. The rules should be clear. If they don't want salary sacrifice to count it's very easy, just exclude it from the calulations. One has to assume therefore that the system is set up as intended.

Don't disagree with anything you have said - I think it's a given that morals are individual and while there may be a societal average it's for each of us to decide how we behave.

I think it's an immoral approach. You and Michaels don't. I'm sure we could find lots of people on either side.

Best left there I guess.

gadgetmind

Graham_Devon wrote: »

My personal stance is I cannot stand the fact that the system can be abused in such a way

You say "abused", the law says "used".

I think it's simply unfortunate and morally obscene that the wealthy can take advantage of a system in such a way

Define "the wealthy". Michaels has made it clear that they have chosen to live off a low income but have a healthy pension building up. This is a lifestyle choice and choice is a good thing. If someone's income is so low that they qualify for tax credits, how can you class them as "the wealthy"?

The most bizzare thing about all of this is all those that are supporting this "scheme" are vehemently apposed to stuff such as council housing,

I'm personally not too fired up about council housing, but please understand that there is a HUGE gulf between minimising the tax you pay versus maximising the amount you claim as benefits.

Those holding up the whole tower of cards will understandably want to keep their load as light as they can and be critical of those along for a free ride. This is human nature and fighting it is futile.

michaels

Mistermeaner wrote: »

difference between paying into pension to minimise tax (on way in, you still pay on way out) and paying into pension in order to maximise a benefits claim (benefits intended for those on low incomes)

To me a pound is a pound whether it is a pound of tax relief for an additional rate taxpayer or a pound of tax credits for someone of lesser means. Can the rest of you point to the govt deficit and say that it is made up of different sorts of pounds? Thus I can't see any moral difference between the two. If we assume the more you have the less you should take advantage of the govt then surely it is more immoral for an additional rate taxpayer to get pension tax relief than it is for me to get tax credits?