ISA limit reached.

AnotherJoe

ArmyDilllo wrote: »

I'm not sure I understand your point.
I will still only receive a [state] pension based upon my N.I. contributions and which I cannot access for another nine years; The government recently breaking the original contract we agreed, when I started earning, of providing me with an income when I reached 65 years and not 66 which it recently imposed (some got even longer sentences).

.

The point is, it's a fiction that your NI pays for your pension. At best, your NI pays for pensions being paid to other people's pensions now. Your pension will likewise be paid by other people's NI.

People think of it as a fund into which you pay but it's much more like a Ponzi scheme, where the payouts to old investors come from new investors. That pretty much had to be the case, otherwise there would have been no pensions paid for the first 30 years or so of paying NI until people had reached retirement age. But it didn't happen like that, NI and pensions came in effectively at the same time.

And if it didn't come from NI it would come from somewhere else, e.g. General taxation. It's not your pot you paid into and there's no contract you entered into, you had no choice any more than you had a choice about paying income tax. It's just another taxation that might as well, be rolled into the overall taxation but then the headline rate would look far more alarming.

Eco_Miser

ArmyDilllo wrote: »

An interesting response from a (the) Money Saving Expert forum, thank you.
And seemingly confused.
My refuse and police protection comes from locally collected community charges (which I have not found a way around yet and will still have to suffer in retirement, as mentioned).

No, you seem to be confused. You said, in the post grey gym sock was responding to

I still have to pay tax to live in my house, go anywhere and spend any of my savings (ISA or otherwise).

So you are actually in agreement that your tax funds police and refuse collection.

Also not all your spending is taxed.

ArmyDilllo wrote: »

My State pension and NHS benefits are provided through National Insurance, not Income tax.

I thought this was a rant about all taxation, which National Insurance is, despite its misleading name,

ArmyDilllo wrote: »

What I'm doing is not-tax-evasion;

Who said it was?

ArmyDilllo wrote:

There is no way on this earth or any other I intend to pay tax twice on it.

You haven't paid tax on your pension contributions, and you won't be paying tax on income or capital gains from ISAs, and probably not on savings interest or dividends outside ISAs either, so you won't be paying tax twice on your income, indeed you'll have paid no income tax at all on your pension income if it fits in your PSA.

Of course, you'll be paying various taxes on expenditure, sometimes two taxes on the same expenditure, and the only way to avoid that is not buy those double-taxed items.

grey_gym_sock

armydillo: IMHO, the problems with your earlier post, which i was responding to were:

1) your moral outrage at the very idea that you wouldn't be able to avoid paying all kinds of tax in the future.

this is just ridiculous. we all pay some taxes, and all get some benefits from public spending. you can't expect to unilaterally decide you've paid enough and opt out of paying more taxes.

in a later post, you've changed your tune a bit about council tax. before, you were outraged that you can't avoid paying it because you have a home in the UK; now, you're apparently happy because it pays for police and rubbish collection, which you benefit from.

while it's nice to know where taxes go, taxes don't mostly work on the basis that you get back something for what you pay in. to a limited extent, some taxes do, when council taxes pay for local services - but then a lot of the money for local services comes from central government grants. and to some extent NI pays for state pensions, but in reality it can be topped up via general government funds. and on a personal level, there is absolutely no suggestion that what you pay in will be of the same value as what you get out. and many taxes (e.g. income tax; VAT) simply go the treasury, and much spending simply comes from the treasury, with no matching. public finances are really just 1 big pot.

2) your outright lie that taxes are not used for your benefit.

i provided some examples of ways you must of benefited from public spending. and you've now provided some more examples e.g. unemployment benefit.

in fact, you're now also whingeing a bit that you didn't get more benefit. at the same time as whingeing about how much you have to pay in. a bit inconsistent, no?

of course, we can all have opinions about how more public money should be spent on X, and less on Y, or more tax raised from P, and less from Q. indeed, we should have opinions on that - that's the main way democracy is supposed to work. perhaps you have some opinions on that, but you really haven't explained them. it just comes out as complaining about how it's affected you.

3) your disparaging remarks about politicians (and civil servants) were somewhat beside the point. however bad they may be, most taxation doesn't go to benefit them; it's mostly spent on very useful things (though of course we all have opinions on where there could be improvements).

in case there's any doubt: i have no problem with people reducing their tax bill in straightforward ways. what i suggest is: when you've done that, be happy about the tax you're still paying: it's the price we pay for a civilized society.

i do have a problem with illegal tax evasion, and with the very artificial forms of tax avoidance which many big companies and very wealthy individuals have been using. one of the reasons for cracking down on that is that it undermines confidence in the tax system: ordinary people are less happy to pay their taxes when they know that some people have found a way out of paying taxes.

bigadaj

darkidoe wrote: »

I have been reading and thinking about this. Income taxation is really high on for the UK compared to everywhere else in the world. However you have to balance that against the social/welfare state you have. How much taxation is reasonable. The way I see it, the wealthy seems to have more wriggle room to maneuver around taxes compared to the lower income earners. It is all good sense to be savy about taxation and keep on top of ways to reduce taxes as much as you can.

There was a post I read which was profound and put it in a clear way why we should we keep track of it more closely. Say if you are paying the higher tax rate (40%), for every 5 day week that you work, 2 days pay goes to the tax man and you only get to keep 3 days pay. How painful is that? I feel sore just thinking about it.

Income tax isn't that high in the uk, it's higher in most of Northern Europe at least, but they generally get better social benefits than in the uk, the U.K. Is probably less efficient in using tax in a useful manner.

Your 40% summary doesn't really work because no one pays all their income at 40% because there is a zero rated personal allowance and then a standard rate of tax. Many might argue that standard rate taxpayers have it harder because they pay 32% tax including NI on sums above £11k, so on sums that most people would consider essential to live on, rather than 42% on sums which are greater than many might consider being necessary for life's essentials.

Given the fact that lower earnings are more likely to be considered as essential for basic living costs then higher rate taxpayers also have an easier time as tax avoidance, primarily by means of pension contributions, is far easier to achieve, with a consequent deferral of tax on all sums contributed.

ArmyDilllo

grey_gym_sock wrote: »

be happy about the tax you're still paying: it's the price we pay for a civilized society.

I am more than happy with the level of income tax I'm now paying.
None!

I will also be a contributor to the social state (I am and always have been a Socialist), albeit not through choice.
If you guys are happy paying income tax when you don't need to, that's awesome.
I'm happy for you.

Just a reminder:

20% [basic rate] income tax
20% "Value Added" tax
40% Inheritance tax

...without all the other taxes you can enjoy paying on top.
Fill your boots.
Go crazy.

I quit smoking a few years ago and have so far saved £125k from that.
But maybe I should send a cheque for that amount to British American Tobacco so I don't rob the Exchequer of the tobacco revenue on it.
I also occasionally buy products from Amazon, paying the full amount.
But they don't appear to have paid the full tax on that to the Government.

It's a tricky one alright.

:beer:

bowlhead99

ArmyDilllo wrote: »

I will also be a contributor to the social state (I am and always have been a Socialist), albeit not through choice.

Ah, the type of socialist who believes that it is best that cash and resources are distributed through society through taxation, welfare and government spending and investment, as long as he doesn't have to contribute to that process, and is really really reluctant to pay any kind of tax. Yeah, I bet all your fellow socialists are happy to count you among their number.
:beer:

I see you are moaning about having to pay VAT, which is a tax on all but the essentials which is paid over to hmrc by companies in layers as they each add value to a product or service and ultimately borne by the end user of the product or service.

If we scrapped it we could get the money a different way, by charging more taxes on business profits - but as the businesses will still want to make the same profits on the work they do and the risks they take, you will probably still end up paying the same gross price.

I do agree of course that there is no point being some moral crusader and paying more tax than you're asked to pay, so it makes sense to minimise taxes by maximising use of your various investment allowances, exemptions, low or zero rate tax bands etc. All of which have deliberately been put in place by governments to encourage specific behaviour (e.g. putting money away for retirement, making investments, avoiding smoking or driving a high-emissions vehicle etc) or to compensate for certain circumstances (e.g. not having a massive income, etc).

ColdIron

ArmyDilllo wrote:

Sadly though I am unable to avoid tax completely

The SOB's get enough contribution from me and won't get anything more

There are plenty of ways to avoid the SOB's getting it after you die as well

My refuse and police protection comes from locally collected community charges (which I have not found a way around yet and will still have to suffer in retirement, as mentioned)

I am more than happy with the level of income tax I'm now paying.
None!

Well you come across as a hardline tax avoider, bravo

ArmyDilllo wrote:

I am and always have been a Socialist

Now it makes sense. Everyone should pay their fair share of tax ... except me

AnotherJoe

ArmyDilllo wrote: »

I am more than happy with the level of income tax I'm now paying.
None!

I will also be a contributor to the social state (I am and always have been a Socialist)

I really cant work out if that's irony, hypocrisy, or trolling.

ArmyDilllo

I feel like I'm being trolled not the other way around.
The real money earners pay less tax in their lives than I've paid in a year.
WAKE UP.
The more money you have, the easier it is to [legitimately] keep it.
There are loads of much less palatable means to do it which the Govt leave alone so they can exploit them.
Otherwise3 they'd close down the Cayman Islands*.

There also seems to be some confusion around tax avoidance and tax evasion*.

Tax evasion - misleading HMRC over the amount of tax you should be paying.
Tax avoidance - complete visibility with and honest declarations to HMRC exploiting tax efficient schemes created and sponsored by our government to allow me to do EXACTLY what I'm doing.
There's no grey area here - it's all above board, well publicised and available to everybody to use.

I am not exploiting loopholes in the law, like investing in loss-making ventures to write off my tax.
I am utilising legitimate and publicised HMRC approved and audited facilities.
You don't have to if you don't want to.
But, WOW! I shall continue chuckling at your expense all the way to my bank.

By the way, I just completed and submitted my tax declaration.
Total honesty, visibility and all above board.
Guess what? No income tax to pay.

Feels great boys, like a little lottery win or something.
I think I shall pop out to celebrate by buying an expensive bad-boy coffee from Costa or Starbucks, with my ill-gotten gains.

Can't wait until you've done your first IHT course.
Then you'll have something to gripe about.

ArmyDilllo

AnotherJoe wrote: »

I really cant work out if that's irony, hypocrisy, or trolling.

The former.