Could the government raise the limit for tax free savings?

older_and_no_wiser

Back to my original question on raising the personal savings allowance. Good to see we get politicians reading these forums... 😂

https://www.standard.co.uk/business/money/personal-savings-allowance-should-be-increased-says-former-minister-b1094893.html

artyboy

older_and_no_wiser said:

Back to my original question on raising the personal savings allowance. Good to see we get politicians reading these forums... 😂

https://www.standard.co.uk/business/money/personal-savings-allowance-should-be-increased-says-former-minister-b1094893.html

I can see the Daily Mail headline...

"Huge tax windfall for rich savers, while struggling homeowners repossessed", 

MattMattMattUK

It probably makes more sense to abolish the savings allowance, but apply a flat rate interest tax at source to streamline the process. 

subjecttocontract

Improvement on tax free savings ? Not a chance in my opinion.
Any tax benefits are likely to be limited to inheritance tax.

Malthusian

MattMattMattUK said:

It probably makes more sense to abolish the savings allowance, but apply a flat rate interest tax at source to streamline the process.

And bring back the 10% dividend tax credit? And compulsory annuities? And change Starburst back to Opal Fruits?
(For younger readers, Matt³ is talking about changing the system back to the way it was before 2015.)

MattMattMattUK

Malthusian said:

MattMattMattUK said:

It probably makes more sense to abolish the savings allowance, but apply a flat rate interest tax at source to streamline the process.

And bring back the 10% dividend tax credit? And compulsory annuities? And change Starburst back to Opal Fruits?
(For younger readers, Matt³ is talking about changing the system back to the way it was before 2015.)

No, because those would be daft. But streamlining the process would make a lot of sense. 

wmb194

Malthusian said:

MattMattMattUK said:

It probably makes more sense to abolish the savings allowance, but apply a flat rate interest tax at source to streamline the process.

And bring back the 10% dividend tax credit? And compulsory annuities? And change Starburst back to Opal Fruits?
(For younger readers, Matt³ is talking about changing the system back to the way it was before 2015.)

The fact that he'd introduced it in the first place probably didn't help but remember the outrage when Gordon Brown took away the 10% tax rate tier on savings to return it to 20% on all interest? Politicians should definitely bear this in mind. I suspect they'll just do nothing and let fiscal drag and higher deposit rates do the work of increasing the tax take.

Albermarle

artyboy said:

older_and_no_wiser said:

Back to my original question on raising the personal savings allowance. Good to see we get politicians reading these forums... 😂

https://www.standard.co.uk/business/money/personal-savings-allowance-should-be-increased-says-former-minister-b1094893.html

I can see the Daily Mail headline...

"Huge tax windfall for rich savers, while struggling homeowners repossessed", 

More of a Daily Mirror headline.
Daily Mail is always banging on about there being too much tax.

jaypers

arnoldy said:

talexuser said:

Yes, worry about a few crumbs of savings interest when your personal allowances have been fixed for years in the times of rampant inflation making you lose hundreds of pounds a year due to the fiscal drag which would not be the case in any other government that stuck by Rooker/Wise.

Yes, but in UK personal allowances are many, many times higher than most of Europe. AND the tax credits system means many people are paying reverse tax! In fact, the current UK tax system is so heavily dependent on the "rich" it's probably not healthy. The tax base is narrow, taxes will always fall on the middle classes as there are more of them - and they are struggling under the weight of tax.

Take a Salary of £60k - deduct income tax £12k, NI £6k, graduate loan £3k, pension £6k, Council tax £3k. Leaving £30k - £2,500 month (HALF!!).

Oh and no freebies or child benefit. 

So impossible to buy a house. That won't improve until more people are net contributors to Government coffers and/or spending is hacked down.

Income tax on a £60k salary would be £11,432 and NI would be £4,719. I only mention this as that’s nearly £2k, which is significant to many people and your figures are exaggerated. 

Malthusian

jaypers said:

Income tax on a £60k salary would be £11,432 and NI would be £4,719. I only mention this as that’s nearly £2k, which is significant to many people and your figures are exaggerated. 

A salary of about £60k would incur £12k in income tax (£61.5k, to be precise). And both of you were way off about NI, a salary of £60,000 incurs £11,743 in National Insurance.
For someone paying graduate tax and with two kids, that's £11,432 in income tax, £2,075 child benefit tax, £2,943 graduate tax, £11,743 in NI and £3k council tax. (I'm not counting pension contributions as that's very unlikely to be a tax for someone on £60k.) Total £31,193. What's a rounding error of £2k between friends?
That said, if they have a salary of £60k and they have kids (which usually implies a partner), it's not tax that is stopping them buying a house.