Could the government raise the limit for tax free savings?

older_and_no_wiser

Momentum is gaining.....

Come on Chancellor, give savers a tax break! https://www.thisismoney.co.uk/money/saving/article-12311275/Come-Jeremy-savers-tax-break-call-Chancellor-double-tax-free-allowance-1-000-2-000.html?ito=native_share_article-nativemenubutton

Albermarle

Come on Chancellor, give savers a tax break

Not a very accurate request . UK savers already have a number of tax breaks on savings interest, in fact very generous ones when compared internationally.

dlevene

Rightly or wrongly, I can see it being the sort of thing the Government might do as a pre-election giveaway...

Malthusian

lcooper said:

It seems I have landed in a strange place where some employer tax payments are somehow deducted by some people from employee gross pay. Whatever floats your boat, I suppose.

Every time someone claims that a tax on employees' income isn't an income tax, a Treasury official gets their wings.
Statements like this are the reason hiking National Insurance has been such an effective stealth tax for both the previous Labour regime and the current Tory one. 

AlanP_2

Let's just hope we soon get back to getting 0.5 to 1% on our savings and then these daft ideas can wither on the vine.

People can then moan they are earning paltry amounts of interest but should be happy as they aren't paying tax.

Qyburn

Remember that the PSA is quite recent, until 2016 all interest outside ISAs was taxable, and was normally paid with Basic Rate deducted. They could just as easily reduce or remove it, as they could increase it.   

EthicsGradient

Malthusian said:

MattMattMattUK said:

No, because those would be daft. 

Citation needed. Opal Fruits was a much better name. Starburst sounds like a My Little Pony.

But streamlining the process would make a lot of sense. 

That was what Osborne did when he changed the system. It meant that the majority no longer had any tax to pay on interest, and saved non-taxpayers the bother of reclaiming the 20% tax that had previously been deducted at source.
The general principle is that the less income you have, the less hassle you should have with the taxman. If non-taxpayers have to submit a form as a result of their interest income while richer basic rate taxpayers don't, in order to pay the correct amount of tax, the system has been designed poorly.
Of course, it doesn't work so well when the amount of interest people receive goes up and the interest rate allowance goes down thanks to fiscal drag. But I would be surprised if the Tories undid their own reforms less than ten years after enacting them.

lcooper said:

The MSE tax calculator suggests you are way off about NI

Do, do, do, another one bites the dust. You forgot employer's NI. 
60,000 - 9,100 * 0.138 = another £7,042 on top of that.

Just to clear this up: if you do, contrary to normal usage, count someone's gross salary as the total that comes out of the employer's account, so that employer's NI can be included in the calculation, then an employer's contribution of £7,042 comes from a gross salary of £67,127.

7042 / 0.138 = 51029
51029 + 758 * 12 = 60125
60125 + 7042 = 67127

The employer's NI on what an employer pays is 0.138 * (g - 9096) / 1.138
so if g = 60000, the employer's NI is £6,173; what everyone in the real world, including HMRC, calls the salary is £53,827. That is then the figure used for tax calculations - whether employers' NI, employee's NI, or income tax. Or graduate loan repayment. Or, for that matter, child benefit charge calculations, which I see crept in (and, since the basis for it is now significantly under £60k, will be quite different).

The council tax you could keep at £3,000 (though it must be surely for only one earning parent, because that is surely applying your entire council tax to just one adult - the highest council tax in the country is £4,843 for a band H property). But since it's unrelated to salary, and depends on area and size of house, it seems bogus to use it in this calculation (we're not including VAT, either).