Pension tax raid being touted again

garmeg

nigelbb said:

The public spending required during the coronavirus crisis is unprecedented & should be treated in the same way as war debts & funded by borrowing to be repaid over the next 100 years. The increase in the PSBR will be negligible & tax rises unnecessary. 

Exactly. We had War Loan 4% and Consols 2.5% so why not a Covid Bond 0.19%?

Albermarle

garmeg said:

nigelbb said:

The public spending required during the coronavirus crisis is unprecedented & should be treated in the same way as war debts & funded by borrowing to be repaid over the next 100 years. The increase in the PSBR will be negligible & tax rises unnecessary. 

Exactly. We had War Loan 4% and Consols 2.5% so why not a Covid Bond 0.19%?

Or Income bonds at 1.16 % .

garmeg

Albermarle said:

garmeg said:

nigelbb said:

The public spending required during the coronavirus crisis is unprecedented & should be treated in the same way as war debts & funded by borrowing to be repaid over the next 100 years. The increase in the PSBR will be negligible & tax rises unnecessary. 

Exactly. We had War Loan 4% and Consols 2.5% so why not a Covid Bond 0.19%?

Or Income bonds at 1.16 % .

That is a variable rate. Bonds are generally fixed rate for their duration and are not savings but investments.

Albermarle

garmeg said:

Albermarle said:

garmeg said:

nigelbb said:

The public spending required during the coronavirus crisis is unprecedented & should be treated in the same way as war debts & funded by borrowing to be repaid over the next 100 years. The increase in the PSBR will be negligible & tax rises unnecessary. 

Exactly. We had War Loan 4% and Consols 2.5% so why not a Covid Bond 0.19%?

Or Income bonds at 1.16 % .

That is a variable rate. Bonds are generally fixed rate for their duration and are not savings but investments.

Yes I get that, but was just making the point that the Govt is encouraging us to save more with NS&I , to help with the Covid debt , short/medium term anyway .

andrew_m

nigelbb said:

The public spending required during the coronavirus crisis is unprecedented & should be treated in the same way as war debts & funded by borrowing to be repaid over the next 100 years. The increase in the PSBR will be negligible & tax rises unnecessary. 

I agree. I always thought that's what they were going to do. All this talk of tax rises etc makes it sound like everything is over and the economy is back baby, when nothing could be futher from the truth. The money markets seems very relaxed about the level of borrowing to finance, what will hopefully, be a once a in generation event, and even starting to pay the money back even before the full effects of the unepoyement and recession to come seems crazy. As long as it doesn't lead to moral hazard on what the govt counts as borrowing for the pandemic (e.g. trying to dump Crossrail in there) they should just ring fence it and finance it over a 100 years.

pjread

anything below 1% long term and gilts would almost certainly give a real-term negative cost of borrowing, so seems a no-brainer to me from a government perspective as it kicks a problem down the road and nationally it means it'll be a smaller problem when someone else has to deal with it!

But also makes me not want to buy any bonds, so maybe someone needs to sketch a supply/demand graph  

'Banning salary sacrifice' sounds semi-reasonable (even if it'd be a pain), but being able to enforce that probably means making employer pension contributions a taxable benefit.  Maybe that'll happen, but it flies in the face of encouraging retirement saving so I'd bet against it.

Swipe

I hope Rishi isn't reading this thread If he takes some of these suggestions on board I can see him going from hero to zero at the budget announcement

molerat

Direct tax increases will be hard to sell but decreasing tax avoidances would likely be a winner - can you see Labour arguing against it ? How can you justify someone buying a bike and getting tax relief of 40% on it ?

kangoora

My suggestions will probably not be appreciated on this forum, mainly because due to the type of people in general who frequent this forum and all of these would affect people on here rather more (including me in part) than the 'average' Uk taxpayer.

Whilst it would suck, a raise in income tax of 2% would mean, effectively on minimum wage, a very small amount of extra tax due to the £12.5k personal allowance. Obviously for higher earners it would be relatively more but still only around £20 in every £1000 gross pay. If that amount of extra tax pushes people 'over the edge' then they were doing something wrong anyway. Raising income tax is a 'fair' way to raise taxes as it affects everybody according to their earnings.

Removing salary sacrifice should be done, however they manage to implement it. It's another patently unfair 'tax avoidance' technique that is only available to people who work for firms who implement it. As i said in another thread, my wife has worked for 4 employers over the last 20 years and none of them used salary sacrifice making it a tax-saving scheme only available to a certain group of taxpayers. Even where it is implemented it is still unfair due to companies electing to refund anything from 0% up to max employee NI savings (obviously it's the choice of the companies how much they cough up).

Remove tax-free dividends, at the end of the day they are just 'income' and why should any income be tax-free separate from your tax allowance. Appreciate this would? affect investment dividends also.

Get rid of the loophole/system where self-employed people/company owners pay themselves the bare minimum of wages, just enough to qualify for NI credits and pay themselves the rest of their wages in dividends. Make dividends taxable at full BR/HR and not some artificially low figure so they pay the same amount of tax as PAYE people. Edit: Maybe link dividends to NI also, is that even possible?

Raise CGT tax rates to 0%, 20% and 40% in line with basic and higher rate tax. Again, it's income so why is it taxed below PAYE income rates. Very unlikely to be a problem for lower earners (exceptions may/will exist)

Most of the above appear to me to be anomalies where a subset of the population are enjoying paying less tax than your 'standard PAYE employee'.

I'm not attempting to suggest any methods of doing the above, that is for bigger brains than I

molerat

You missed class 2 NI.  There is no place for it today, class 1, class 4 and class 3 are all that is needed. There can't be many investments that guarantee that type of return, pay a one off £3.15 and get £5 a year for life. Pay a one off £15.30 and get £5 a year for life instead.