How much more tax?

sultan123

I am reading today increase in tax rises from government but I thought they had already frozen Personal allowance till 2026 which is why you pay more tax anyway.

If I am earning 100k a year how much more tax each year from now till 2026 would I be paying in view of personal allowance freeze.

 

MattMattMattUK

sultan123 said:

I am reading today increase in tax rises from government but I thought they had already frozen Personal allowance till 2026 which is why you pay more tax anyway.

Nothing has been confirmed yet, there does not even appear to be a vaguely detailed leak, just that taxes will nee to rise, which means that everything at the moment is pure speculation.

sultan123 said:

If I am earning 100k a year how much more tax each year from now till 2026 would I be paying in view of personal allowance freeze.

Zero in actual amount, zero if you get no pay rises. There is the prospect of fiscal drag if your earnings increase, inflation exists and thresholds do not, but there are too many variables involved to give anything other than a "best guess". If your income increased with inflation and inflation follows the predicted trend then your effective rate of income taxation would increase from 33.4% to 38.8% due to fiscal drag. 

Grumpy_chap

sultan123 said:

how much more tax each year from now till 2026 would I be paying
 

Lots.  Everyone will pay a lot more tax to repay the generosity of the COVID give aways and the energy subsidies.  There is no such thing as a free lunch.

No one can say anything more accurate until the Chancellor's statement which is currently scheduled for the later half of this month.

Albermarle

Nothing has been confirmed yet, there does not even appear to be a vaguely detailed leak, just that taxes will nee to rise, which means that everything at the moment is pure speculation

I read what I think was 'informed speculation' that the personal allowance freeze will be extended even further. Which apart from meaning more tax for everybody, it will also drag more people into the 40% tax bracket. Same source seem to think there would be no rises in the 20%/40%/45% or in NI or VAT

Grumpy_chap

Albermarle said:

I read what I think was 'informed speculation' 

The biggest thing I have seen or heard is a big exercise in expectation management - nothing can be guaranteed (benefits, pensions), nothing is sacred, taxes up, spending down. 
This is really all to pre-condition us to the announcement being awful and we'll breath a sigh of relief when we hear whatever we do hear.

Liz Truss has done Rishi quite a big favour, though as the blame will be thrown at the "mini-budget that wasn't" rather than the give away policies of COVID and energy subsidies and the financial costs of the Ukraine war. Can anyone remember who the Chancellor was when the COVID and energy subsidy give-aways were throwing money around like it's going out of fashion?

sultan123

Albermarle said:

Nothing has been confirmed yet, there does not even appear to be a vaguely detailed leak, just that taxes will nee to rise, which means that everything at the moment is pure speculation

I read what I think was 'informed speculation' that the personal allowance freeze will be extended even further. Which apart from meaning more tax for everybody, it will also drag more people into the 40% tax bracket. Same source seem to think there would be no rises in the 20%/40%/45% or in NI or VAT

How would this work if on 100k in terms of personal allowance freeze

sultan123

MattMattMattUK said:

sultan123 said:

I am reading today increase in tax rises from government but I thought they had already frozen Personal allowance till 2026 which is why you pay more tax anyway.

Nothing has been confirmed yet, there does not even appear to be a vaguely detailed leak, just that taxes will nee to rise, which means that everything at the moment is pure speculation.

sultan123 said:

If I am earning 100k a year how much more tax each year from now till 2026 would I be paying in view of personal allowance freeze.

Zero in actual amount, zero if you get no pay rises. There is the prospect of fiscal drag if your earnings increase, inflation exists and thresholds do not, but there are too many variables involved to give anything other than a "best guess". If your income increased with inflation and inflation follows the predicted trend then your effective rate of income taxation would increase from 33.4% to 38.8% due to fiscal drag. 

But what about the current personal allowance freeze?

Albermarle

sultan123 said:

Albermarle said:

Nothing has been confirmed yet, there does not even appear to be a vaguely detailed leak, just that taxes will nee to rise, which means that everything at the moment is pure speculation

I read what I think was 'informed speculation' that the personal allowance freeze will be extended even further. Which apart from meaning more tax for everybody, it will also drag more people into the 40% tax bracket. Same source seem to think there would be no rises in the 20%/40%/45% or in NI or VAT

How would this work if on 100k in terms of personal allowance freeze

As it is only speculation, it seems pointless to do any detailed calculations until the financial statement is made.
I think you can be sure though that people on four times the average wage will be in the firing line.

penners324

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

[Deleted User]

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

So long as the amount where one starts to lose personal allowance (£100000)  is not reduced.

sultan123

What would be the difference between earning 100k in last tax year vs till 2026 then.

As the PA freeze till 2026 only started this tax year right?