new tax law

polymaff

teddysmum wrote: »

Sorry, but being a mathematician, my logic is correct, as I defined the circumstances.

The fault in your logic was that you lent support to someone who hadn't "defined the circumstances". Curate's egg, etc.

teddysmum wrote: »

Of course someone could have an income of £16000 and earn under £11000. They would be an admittedly rare ....

You must be joking, Teddysmum! Many of the changes in this year's Income Tax arrangements have been introduced specifically to try to cut back on what the Chancellor considers to be tax avoidance by an army of what you think are rare individuals.

oldfella

I'm not going to comment any more, as this is getting off topic, but do you mean £11000 or less consisting of savings, earned income or pensions, means a further possible £6000 of tax free interest ?

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this is also my last comment - yes

darkidoe

I hate red tape.

bowlhead99

darkidoe wrote: »

I hate red tape.

I find it adds a festive touch when wrapping Christmas presents.

But neither that, nor its alternate colloquial definition of 'a series of unnecessary tasks that you have to do be allowed to get something' seem relevant here, because the various annual personal income allowances, and the starting rate of tax for savings income, and the personal savings allowance, and a variety of reliefs, are each available to all those who qualify for them - regardless of whether the person understands how best to explain all of them in one snappy sentence.

They are not designed to be explained in one snappy sentence because they are different reliefs and allowances which are experienced (or not) by people in different situations. Depending on your circumstances, your savings income may be covered by none or more of:

- Personal Allowance
- Marriage Allowance (personal allowance transfer from spouse or civil partner)
- Married Couple's Allowance (or transferred Married Couple's Allowance)
- Blind Person's Allowance
- Starting rate of tax for savings income of 0%
- Personal Savings Allowance

That is before going into the various reliefs that you may have available to reduce your effective tax bill on your remaining savings income depending on your personal circumstances, such as for charitable donations, pension contributions, VCT/EIS/SEIS investments or maintenance payments.

Someone receiving savings interest income should consider whether it is covered by any of the five potential Allowances or the low starting rate for savings income (currently 0%), and then they will know whether any of it is going to produce a tax bill and may benefit from reducing their tax bill by claiming a relief.

It sounds like the OP is already satisfied with the responses on this thread in the context of their personal circumstances. But I expect they will not be the last one to ask.

bigadaj

bowlhead99 wrote: »

I find it adds a festive touch when wrapping Christmas presents.

But neither that, nor its alternate colloquial definition of 'a series of unnecessary tasks that you have to do be allowed to get something' seem relevant here, because the various annual personal income allowances, and the starting rate of tax for savings income, and the personal savings allowance, and a variety of reliefs, are each available to all those who qualify for them - regardless of whether the person understands how best to explain all of them in one snappy sentence.

They are not designed to be explained in one snappy sentence because they are different reliefs and allowances which are experienced (or not) by people in different situations. Depending on your circumstances, your savings income may be covered by none or more of:

- Personal Allowance
- Marriage Allowance (personal allowance transfer from spouse or civil partner)
- Married Couple's Allowance (or transferred Married Couple's Allowance)
- Blind Person's Allowance
- Starting rate of tax for savings income of 0%
- Personal Savings Allowance

That is before going into the various reliefs that you may have available to reduce your effective tax bill on your remaining savings income depending on your personal circumstances, such as for charitable donations, pension contributions, VCT/EIS/SEIS investments or maintenance payments.

Someone receiving savings interest income should consider whether it is covered by any of the five potential Allowances or the low starting rate for savings income (currently 0%), and then they will know whether any of it is going to produce a tax bill and may benefit from reducing their tax bill by claiming a relief.

It sounds like the OP is already satisfied with the responses on this thread in the context of their personal circumstances. But I expect they will not be the last one to ask.

Says the accountant.

talexuser

Initially I was also confused because the statement "anyone with income less than £17000 will pay no tax" was widely reported after the budget, when the full statement was actually "anyone with income less than £17000 will pay no tax on savings interest".

polymaff

talexuser wrote: »

Initially I was also confused because the statement "anyone with income less than £17000 will pay no tax" was widely reported after the budget, when the full statement was actually "anyone with income less than £17000 will pay no tax on savings interest".

Exactly, Talex! As income tax becomes more and more complicated, making clear, unambiguous, statements becomes harder and harder to do. The example you quote has caught many out. Actually, when you unscramble it it is still wrong! Likewise with their conditional statements about the Marriage Allowance Transfer.

And this is supposed to the era of tax simplification.

realaledrinker

Thanks all for a very informative (and entertaining) thread. Must visit more often.