When will 17th November budget changes take effect?

[Deleted User]

Grumpy_chap said:

The speculation ahead of a fiscal statement is always rather futile and I rather suspect there will be less advance briefing that has been the case in recent times.

One possible change that has been mentioned in some press is to reduce the threshold for 45% income tax from £150k to £125k, which would presumably come into force from April.  I actually think, if there were to be changes in that kind of fashion, it would make more sense to bring in the 45% rate from £100k but do away with the tapered-withdrawal of the personal allowance.  This would at least avoid the distortions that drive behaviours to avoid the effective >60% tax rate.  It might mean that tax take increases or the level of the 45% could be adjusted to compensate. 

Absolutely much much too sensible a suggestion to happen!

Dazed_and_C0nfused

[Deleted User] said:

Grumpy_chap said:

The speculation ahead of a fiscal statement is always rather futile and I rather suspect there will be less advance briefing that has been the case in recent times.

One possible change that has been mentioned in some press is to reduce the threshold for 45% income tax from £150k to £125k, which would presumably come into force from April.  I actually think, if there were to be changes in that kind of fashion, it would make more sense to bring in the 45% rate from £100k but do away with the tapered-withdrawal of the personal allowance.  This would at least avoid the distortions that drive behaviours to avoid the effective >60% tax rate.  It might mean that tax take increases or the level of the 45% could be adjusted to compensate. 

Absolutely much much too sensible a suggestion to happen!

I agree, an excellent way of simplifying the tax system.

[Deleted User]

Dazed_and_C0nfused said:

purdyoaten2 said:

Grumpy_chap said:

The speculation ahead of a fiscal statement is always rather futile and I rather suspect there will be less advance briefing that has been the case in recent times.

One possible change that has been mentioned in some press is to reduce the threshold for 45% income tax from £150k to £125k, which would presumably come into force from April.  I actually think, if there were to be changes in that kind of fashion, it would make more sense to bring in the 45% rate from £100k but do away with the tapered-withdrawal of the personal allowance.  This would at least avoid the distortions that drive behaviours to avoid the effective >60% tax rate.  It might mean that tax take increases or the level of the 45% could be adjusted to compensate. 

Absolutely much much too sensible a suggestion to happen!

I agree, an excellent way of simplifying the tax system.

And yet, as I have said elsewhere, it appears that we will have an effective rate of 67% on £140 of income between £125000 and £125140 - madness!

The biggest problem with Grumpy’s suggestion would be that someone on £150000 would be c£2500 off if tax was levied at 45% from £100000 and the personal allowance was restored. 

Grumpy_chap

[Deleted User] said:

The biggest problem with Grumpy’s suggestion would be that someone on £150000 would be c£2500 off if tax was levied at 45% from £100000 and the personal allowance was restored. 

It wouldn't affect me by far, but I don't have an inherent problem with someone on £150k being £2.5k better off.
I also said the 45% could be adjusted to compensate - though that may be politically impossible.

It is entirely possible that this move would increase the total tax take if the amounts over £100k that are currently used for salary sacrifice pensions, EV's or other options are no longer punitively taxed and therefore taken as salary subject to income tax plus NI (employer's and employee's) instead.

[Deleted User]

Grumpy_chap said:

[Deleted User] said:

The biggest problem with Grumpy’s suggestion would be that someone on £150000 would be c£2500 off if tax was levied at 45% from £100000 and the personal allowance was restored. 

It wouldn't affect me by far, but I don't have an inherent problem with someone on £150k being £2.5k better off.
I also said the 45% could be adjusted to compensate - though that may be politically impossible.

It is entirely possible that this move would increase the total tax take if the amounts over £100k that are currently used for salary sacrifice pensions, EV's or other options are no longer punitively taxed and therefore taken as salary subject to income tax plus NI (employer's and employee's) instead.

Agreed - all informed speculation. I doubt that the £150000 earner being better off by £2500 will ever happen - political suicide.