Prudent savers being punished - reply from governor boe office

xylophone

(and if not, pension credit).

This single lady's income is £178 a week which is well above PC level for a single person. She will probably get some help with her council tax.

http://forums.moneysavingexpert.com/showthread.php?t=5598637

Pensioners have had a longer lifetime in which to receive income and accumulate income-generating assets.

But possibly not the opportunity to save vast sums or the knowledge to invest.

Glen_Clark

bowlhead99 wrote: »

Perhaps you didn't notice that over 10% of government tax revenue comes from the financial services sector

I stopped taking Government statistics like that seriously years ago.
For over 30 years they have been reducing income tax and replacing it with stealth tax so the people (especially the poor who are hit hardest) don't realise how much they are paying. As far as I can see the Government has no way of knowing which sector much of their tax comes from - VAT, Alcohol Tax, Tobacco Tax, Fuel Tax, Insurance Premium Tax, etc etc - how do they know which sector is paying what out of all of them?

bowlhead99

Glen_Clark wrote: »

I stopped taking Government statistics like that seriously years ago.
For over 30 years they have been reducing income tax and replacing it with stealth tax so the people (especially the poor who are hit hardest) don't realise how much they are paying.

Sure, but we do know how much gets paid in total because we can see it in the National Accounts. It is then just a case of finding methods to see what each sector pays.

As far as I can see the Government has no way of knowing which sector much of their tax comes from - VAT, Alcohol Tax, Tobacco Tax, Fuel Tax, Insurance Premium Tax, etc etc - how do they know which sector is paying what out of all of them?

The particular stats I quoted were from the study that City of London Corporation commission every year using a methodology put together by PwC, which has been running since before the financial crisis.

They get the figures from 50 companies (insurers, retail banks, investment banks, asset managers etc) who together employ 40-50% of the financial services workforce. The figures include the variety of different types of tax that the companies pay or administer. Then they have to do some extrapolation as they can't literally go out and get the data from every firm of every size.

The total tax contribution to which I referred is made of two bits:-

Taxes borne: the tax cost to the company concerned, which comes out of its profits. This would be corporation tax, employers NI, rates, irrecoverable VAT as the bigger ones as well as the bank levy. Smaller numbers for vehicle excise duty, congestion charge, carbon reduction commitment etc.

Taxes collected: the taxes collected from others by the company and paid over to the government. This is stuff like PAYE and employees NI from its employees, and net VAT and insurance premium tax levied on the products it sells. The company does not bear the cost directly itself but the taxes are generated as a direct result of its business activity (employing a bank clerk or providing an insurance service and whatnot).

The companies report this data, much of which would not otherwise appear in its accounts so is not public domain, and PwC anonymise and collate it and do the statistical analyses to draw the conclusions.

The figures I'd used are ones I had in my head from some previous year's report, and I don't claim to have read the latest annual study released a couple of months ago, but it is here if you are interested. https://www.cityoflondon.gov.uk/business/economic-research-and-information/research-publications/Pages/total-tax-2016.aspx
This is analysed out in a few ways but you can see one summary of the raw numbers on pg 35/36.

The analysis shows 30 odd billion borne and collected by the 50 firms and in extrapolating up for the firms not included you get to £72bn. There are some figures which can be locked down because the government tracks and produces their own stats by sector (for example the corporation tax paid by the financial services sector is £8.4bn, about 10.5% of the total, and the bank levy is £3.4bn and also clearly comes from the banking sector); there are others where they have to look at the type of firm and size etc to extrapolate. But anyway at a cursory glance at their figures it doesn't seem unreasonable to say £70bn of taxes borne and collected. We know the government has a total tax take from all sources of under £700bn, closer to £600bn for the year concerned, so my comment of over 10% of it being from financial services does not seem too far off the mark at all.

The 'stealth tax' things you mention like the tobacco tax and alcohol tax etc will be included in the £600-£700bn total take in the government accounts, but if I buy a bottle of wine from Tesco and drink it with the OH after a tough day at the (financial services) office, it is not getting included in the £70bn borne or collected by the financial services firms, even though it's something I bought out of my financial services wages. The duty would get recorded against the retailer or producer if they were doing their own review of what taxes they generated from activities in their sector. So don't worry, it's not one of those silly surveys concocted by a tabloid newspaper where they extrapolate nonsense.

Glen_Clark

Wish I hadn't asked
A lot of its conjecture I know, but my feeling is that highly paid finance professionals are more likely to invest or spend their income abroad, than lower paid people who are more likely to spend their money straight into the local economy - pubs, hairdressers, plumbers, whatever. Part of the reason QE hasn't worked for many is most of the money has gone to wealthier people who are more likely to invest or spent it abroad.

Glen_Clark

Strangely when I quote Bowlhead's post and reply to it I get a message from 'Captcha' asking me if I am not a robot and advising me to do an anti virus scan. I cannot post on the forum with bowlhead's quote on it. But if I post without quoting bowlhead's post above my post goes through OK. It appears something in bowlheads post or links is bringing up the 'Captcha' anti virus message. But I have no idea what.
Perhaps someone else could try quoting bowlhead's post to see if it does the same thing, or its just a problem with my PC. I am still on Windows XP, I have tried PCs with more recent operating systems but gone back to XP, probably because I am used to it.

Glen_Clark

I'm having no computer problem on other forums. Its just something in bowlhead's post above which conflicts with my computer or this forum when I try to quote it in reply. I have no idea whats causing it. Perhaps someone might have an idea whats causing it?

AnotherJoe

Glen_Clark wrote: »

Strangely when I quote Bowlhead's post and reply to it I get a message from 'Captcha' asking me if I am not a robot and advising me to do an anti virus scan. I cannot post on the forum with bowlhead's quote on it. But if I post without quoting bowlhead's post above my post goes through OK. It appears something in bowlheads post or links is bringing up the 'Captcha' anti virus message. But I have no idea what.
Perhaps someone else could try quoting bowlhead's post to see if it does the same thing, or its just a problem with my PC. I am still on Windows XP, I have tried PCs with more recent operating systems but gone back to XP, probably because I am used to it.

Its not your PC because I've had that on a few posts also seemingly at random couldn't say which ones and I just replied quoting Bowlheads post and didn't get that (I've deleted that reply post now). I think its an error in MSE.

However, there's no excuse to be on Windows XP unless you are trying to build up your malware collection. Learn something new, after a few weeks of annoyance you'll get used to it !

I would have no worries about Win10 if that was applicable to me, I use 7 at work and that's OK, if a bit 'meh" I guess we will eventually upgrade to 10.

Glen_Clark

AnotherJoe wrote: »

Its not your PC because I've had that on a few posts also seemingly at random couldn't say which ones and I just replied quoting Bowlheads post and didn't get that (I've deleted that reply post now). I think its an error in MSE.

However, there's no excuse to be on Windows XP unless you are trying to build up your malware collection. Learn something new, after a few weeks of annoyance you'll get used to it !

I would have no worries about Win10 if that was applicable to me, I use 7 at work and that's OK, if a bit 'meh" I guess we will eventually upgrade to 10.

Thanks for the reply. But it seems you still have problems even though you don't use XP? I 'upgraded' to a PC and Laptop with Windows 7 & and had more bother than that than I did with XP, and some of the programmes I have learned how to use won't work with it. So I went back to my 16 years old PC with XP. Not tried anything newer than Windows 7. I have heard the Military and Banks use very old software thats tried out on the public first to iron out all the bugs?

Glen_Clark

Just tried again to quote Bowlhead's post with Windows 7 then Windows XP PC and both are working now (posts deleted)
Must have been bowlhead's link to the British Government website that spooked my trusty old PC. Perhaps it knows they are a bunch of crooks

AnotherJoe

Glen_Clark wrote: »

Thanks for the reply. But it seems you still have problems even though you don't use XP?

Annoyances. All computers have annoyances.

Glen_Clark wrote: »

I 'upgraded' to a PC and Laptop with Windows 7 & and had more bother than that than I did with XP, and some of the programmes I have learned how to use won't work with it.

Run those in a VM like virtual box or find something new to replace it. Eventually this stuff will stop working, most likely abruptly when your PC dies and leave you hanging.

Glen_Clark wrote: »

I have heard the Military and Banks use very old software thats tried out on the public first to iron out all the bugs?

You have heard wrongly. The reason they use old stuff is not because they let the public be guinea pigs, they arent that Machiavellian, its because they've got themselves locked into particular releases and find it incredibly costly to move because of contractual reasons, commercial reasons and because they dont ever cater for the need to upgrade in their project finance so whatever they start out with by the time they deliver it, its already or close to, obsolete..

They foolishly build something thats dependent upon a particular feature of XP or Windows IE 6 or whatever and the cost to move and replace tens of thousands, in some cases hundreds of thousands, of computers is expensive, they wont gradually chnage stuff as that needs a budget so they put it off for a year or two, and it gets more expensive, and they put it off for another year, etc until it becomes ruinously expensive and eventually they are forced to but then they typically go to something thats just about to be obsoleted because their planning cycles are so cumbersome.

So even when they do upgrade, for example they decide XP must be replaced, they go for (say) Windows 7 (they have long testing cycles and even longer roll out schedules so that by the time they are even starting, and certainly before they finish, they are rolling out obsolete stuff. And theres almost no chance mid planning they will say to themselves "hmm 7 is going to be out of date so lets plan for 10"

I work for an IT vendor and see this every day. They run versions with known major security holes because that what they are locked into and thats what they specified 10 years ago. They even sometimes specify versions that we wont touch because of known security issues, because thats what they specified 5 years ago and it takes them too long to change anything. The Spec says XYZ version N so thats what they insist on even if it has more holes than an Emmental cheese.

...rant over, I feel much now

BTW, when did you last backup your 16 year old PC?