LTA Freeze?

Filo25

It's getting to budget rumour time again, and there is always something relating to pensions in there, especially when the govt is as keen to raise revenue as it is now.

The Times reporting that the LTA is likely to be frozen for the rest of this parliament, this one seems pretty plausible to me, probably not going to attract the kind of outcry that some of the bolder moves would, but it will gradually raise more funds, they aren't necessarily very efficient but govts do love a good stealth tax, when was the last time the diminution in personal allowance was indexed! A bit like the £100k diminution in personal allowance, the LTA also affects relatively few people as well.

https://twitter.com/PoliticsForAlI/status/1365066270102720513/photo/1

Dazed_and_C0nfused

And the "High Income" Child Benefit Charge, which as it stands will be payable by some basic rate taxpayers from 2021:22 onwards.

TVAS

What's your point?

When any government says income and NI should increase we don't vote for them they have to get the money from somewhere. The problem is twofold. We have too many people at the bottom earning !!!!!! money they pay no tax at at all. We have good British companies being taken over by mainly the yanks and paying their tax in Luxembourg or Lichtenstein so we do not get the Corporation Tax. We have had a rise in self employed jobs Uber, Delivery drivers that are not really self employed as they only work for one employer. The money is crap hence no or little income tax. 

Old people are living longer cluttering up the place and pensions is a huge part of government spending bigger than benefits. 
We all need to pay more tax if we want decent NHS, Education, Good Roads etc.

Filo25

TVAS said:

What's your point?

When any government says income and NI should increase we don't vote for them they have to get the money from somewhere. The problem is twofold. We have too many people at the bottom earning !!!!!! money they pay no tax at at all. We have good British companies being taken over by mainly the yanks and paying their tax in Luxembourg or Lichtenstein so we do not get the Corporation Tax. We have had a rise in self employed jobs Uber, Delivery drivers that are not really self employed as they only work for one employer. The money is crap hence no or little income tax. 

Old people are living longer cluttering up the place and pensions is a huge part of government spending bigger than benefits. 
We all need to pay more tax if we want decent NHS, Education, Good Roads etc.

I guess my point was that this is a pensions board and I thought people might be interested.

cfw1994

I guess my point was that this is a pensions board and I thought people might be interested.

Indeed!
I guess the press is full of speculation, & the LTA freezing is believable.  Mind you, if markets continue their moderate spiral this week, it might be less of an issue 

marlot

I suspect the average person would regard a £1.1m pension pot as fair game for a little extra tax.

Mick70

wouldn't have a huge impact , afterall they froze the 40k annual allowance  ,  would be more negative impact if they reduced it by 10% say ,  papers speculating although often no smoke without fire , the tougher decisions for the chancellor may lie in next years budget 

ukdw

If the LTA freeze was backed up by either a temporary reduction, (or flagging a future increase) in the 25%/55% LTA tax levels could potentially pull in a fairly large one off tax windfall at a time when it would be pretty useful to have it - by incentivising over 55's with big pensions to take the LTA tax hit now, rather holding off until age 75.

Croeso69

ukdw said:

If the LTA freeze was backed up by either a temporary reduction, (or flagging a future increase) in the 25%/55% LTA tax levels could potentially pull in a fairly large one off tax windfall at a time when it would be pretty useful to have it - by incentivising over 55's with big pensions to take the LTA tax hit now, rather holding off until age 75.

But there will be another test at 75 anyway.

dunstonh

The LTA shouldn't exist but its now impossible to get rid of politically.
It was introduced because of abuse by large cap companies paying off chairman by putting their golden handshake into pensions to avoid taxation.   It initially captured between 10,000 and 20,000 people in the UK.

It was then converted into a wealth tax with a ridiculously low level set. 

Now, any attempt to raise it will be jumped on by the opposition as the Tories helping bankers.  Despite it capturing more middle class and working class people than it was designed to.

papers speculating although often no smoke without fire 

Often with the media with financial predictions about the budget is all smoke and no fire.

TVAS

There are some things one can control and some things one cannot control. We have many people who have built up very large pension funds I know as I have seen them. They got tax relief, employer tax relief, tax free growth. So these have funds have had taxpayer money. I suspect Corporation Tax will increase.

However for me we are dong the wrong things. Mondelez took over Cadbury in 2018 they reported a profit of 185 million. They paid no Corporation tax. The Corporation tax take is down this is before Covid, Income tax take is down this is because the creation of more low paid zero hour contract jobs and jobs that were previously employed like delivery drivers are self employed. So where do we get the money from to pay for stuff.

In Brexit the working class supporters were going on about the wrong thing. They were talking about immigration. They did have a point because they did keep wages down, however that has been a trend for decades because we do not invest in the UK so we use cheap labour instead. However nobody seemed to care when foreigners came in and did high paid jobs such as those  Financial Services. I said why can't we do those jobs?  If it was up to me I would go to all those !!!!!! schools in !!!!!! areas of the UK. I would drag them to London and I would ask strangers in the street what do they do and how much do they earn. 

I think those kids need works placements from age 14, just to get an idea of work and the skills they need, the money they can earn by being with people who earn good money. Influence is important. These poor kids are contained in a poor social milieu bubble they need to see what is possible before they start taking exams.   

Anyway my main point is our lame political parties have done nothing to stop foreign companies buying UK companies and registering them abroad so no corporation tax is paid in the UK. Cadbury Boots Last Minute Arm Holdings Instagram. Then you have individuals like Philip Green and the Ineos guy and Lewis Hamilton who say they are patriotic but pay their tax in Monaco or Switzerland and we Brits are so dumb we also knight them. 

Tax should be shared most of it falls onto high rate tax payers and as you all know hitting pensions is easy. Also the thing with pensions is that it is taxable on receiving income.

Rant over.