LTA Frozen

michaels

Surely the extra tax on the profits made by the companies all our pensions and isa's are invested in will also appreciably reduce fund values over time?

Thrugelmir

michaels said:

Surely the extra tax on the profits made by the companies all our pensions and isa's are invested in will also appreciably reduce fund values over time?

Biden is proposing raising US corporation tax rates by 8%. The UK isn't alone in the challenges faced. 

Gary1984

Yes freezing LTA is very simple to do, only affects the relatively wealthy and is a somewhat stealthy tax rise as no rate is increased or allowance reduced in nominal terms. Makes sense and could have been worse. 

Mick70

I think there be more to come next year when hopefully the economy is starting to recover .  I expected online retailers to get hit and capital gains tax also with increase in holiday lets as second properties 

Marcon

RuleTheWorld said:

Budget 2021.
Life time allowance frozen at £1,073,100 until at least the end of 2025-26 financial year.
That's going to make a material difference to a lot of people.

So is being unemployed as a result of firms going bust. Why should wealthy pensioners be protected at the expense of families with mortgages and young children - or  indeed anyone struggling to survive?

Albermarle

Marcon said:

RuleTheWorld said:

Budget 2021.
Life time allowance frozen at £1,073,100 until at least the end of 2025-26 financial year.
That's going to make a material difference to a lot of people.

So is being unemployed as a result of firms going bust. Why should wealthy pensioners be protected at the expense of families with mortgages and young children - or  indeed anyone struggling to survive?

The general thought is fine, but probably extra generated from LTA will be a drop in the debt ocean and has more of a political than economic ring about it. 

JoeCrystal

Marcon said:

So is being unemployed as a result of firms going bust. Why should wealthy pensioners be protected at the expense of families with mortgages and young children - or  indeed anyone struggling to survive?

Hear hear. HM Treasury should look across the channel to Ireland to see how they do tax rises as an emergency measure twelve years ago in 2009 and a few years after. It is a shame that the UK parties are gutless to do any tax rises. On the whole, people are really paying fewer taxes than ever due to increased personal allowance.

NedS

Mick70 said:

I think there be more to come next year when hopefully the economy is starting to recover .  I expected online retailers to get hit and capital gains tax also with increase in holiday lets as second properties 

I agree. It was clear he wasn't going to blatantly put up taxes this time around (not the right time to do so?), so we have a raft of stealth measures such as freezing allowances (LTA, personal income tax allowance) until 2026 which will still raise substantial increases in tax revenues over the next 5 years. Next year, after proper consultation, I would expect to see more drastic measures under consideration such as pensions reform maybe including flat rate tax relief at 25% and banning of salary sacrifice or NI payable on gross earnings before sacrifice. If a flat rate of tax relief at 25% were introduced, that would give scope to raise basic rate income tax from 20%, maybe to 21% or 22% and still give BRT payers something back to lessen the blow of a tax hike, whilst hitting HRT payers harder.

michaels

Problem is the increase in the personal allowance was generally seen as positive in that it lifted the lowest paid out of taxation and reduced some of the crippling effective marginal rates where benefit withdrawal combines with tax and NI whereas this freeze will do the opposite.  This is entirely political rather than economic - someone has their eye on a promotion.

Similarly the LTA as we all know impacts negatively directly on the number of GPs as many choose to reduce hours or retire based on the work/life balance arising due to excessive taxation.

Anonymous101

NedS said:

Mick70 said:

I think there be more to come next year when hopefully the economy is starting to recover .  I expected online retailers to get hit and capital gains tax also with increase in holiday lets as second properties 

I agree. It was clear he wasn't going to blatantly put up taxes this time around (not the right time to do so?), so we have a raft of stealth measures such as freezing allowances (LTA, personal income tax allowance) until 2026 which will still raise substantial increases in tax revenues over the next 5 years. Next year, after proper consultation, I would expect to see more drastic measures under consideration such as pensions reform maybe including flat rate tax relief at 25% and banning of salary sacrifice or NI payable on gross earnings before sacrifice. If a flat rate of tax relief at 25% were introduced, that would give scope to raise basic rate income tax from 20%, maybe to 21% or 22% and still give BRT payers something back to lessen the blow of a tax hike, whilst hitting HRT payers harder.

I agree. He hinted that now wasn't the right time but I think purposely didn't mention the more sweeping changes effectively leaving them on the table for next time. I've always felt that the HRT relief and Sal Sac will eventually be targeted so have made the most of any allowances I'm entitled too... I'd urge anyone to do the same.