Government tax receipts on interest being paid this year ??
It got me thinking, have there been any think tank thoughts or projections on the amount that the government will get once the tax bills have been paid from all of this extra interest income ?? Are we talking large sums, or pretty insignificant in the grand scheme of things ? millions, tens or hundreds of millions+ ??
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I'd imagine it to be pretty insignificant in the grand scheme of things, even hundreds of millions would be rounding error territory for total tax revenues:HMRC collected £715.5 billion in taxes in 2021 to 2022, an increase of 22.5% from the year before.https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk/hmrc-tax-receipts-and-national-insurance-contributions-for-the-uk-new-annual-bulletin
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I heard on the radio this morning that over 900,000 more people will end up paying tax on the interest they are earning now - google is not turning up any results - does anyone have any links or facts at all ?0
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However much it might end up being, it's not Government who is getting the extra money. It remains taxpayer money, and we have a justified interest in knowing how our tax gets spent.
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lcooper said:However much it might end up being, it's not Government who is getting the extra money. It remains taxpayer money, and we have a justified interest in knowing how our tax gets spent.0
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Tryinghardtosave said:I heard on the radio this morning that over 900,000 more people will end up paying tax on the interest they are earning now - google is not turning up any results - does anyone have any links or facts at all ?
More than 2.7mn people in the UK are expected to pay tax on cash interest, up by nearly a million in just one year.
AJ Bell called it a tax trap and has made a renewed call for the chancellor to double the personal savings allowance to protect those with up to £20,000 in accounts.
Data obtained by the investment platform showed in the 2023-24 tax year it is estimated that over 2.7mn people will pay tax on cash interest, including nearly 1.4mn basic rate taxpayers, a figure which has quadrupled in just four years.
This all adds up to an estimated total of £6.6bn that will be paid on interest by savers over the year.
The firm estimates around one in 20 basic rate payers will be paying tax on their cash interest which rises to one in six for higher rate payers.
AJ Bell wants the government to change the personal savings allowance which has remained the same since 2016.
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AJ Bell called it a tax trap
I would have thought a respected investment platform, would not use this sort of Daily Mail/Daily Express type language.
Especially as they will well know, that the UK tax breaks on earned interest are already generous by international standards.
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Albermarle said:AJ Bell called it a tax trap
I would have thought a respected investment platform, would not use this sort of Daily Mail/Daily Express type language.
Especially as they will well know, that the UK tax breaks on earned interest are already generous by international standards.
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The rest of that sentence from AJ Bell doesn't make sense either:AJ Bell called it a tax trap and has made a renewed call for the chancellor to double the personal savings allowance to protect those with up to £20,000 in accountsThe personal savings allowance is structured according to the amount of interest earned (and calibrated based on tax bandings) so isn't correlated with balances.
Not sure where they've plucked £20K from - it's obviously the annual ISA allowance, so anyone with 'up to £20,000 in accounts' can already avoid tax on interest income simply by using the existing tax shelter, and PSA entitlements are over and above that!2 -
Back of an envelope guesstimate? Outside an ISA, £20k @ 5% = £1k. Widely available in fixed rate & within touching distance for easy access.0
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badger09 said:Back of an envelope guesstimate? Outside an ISA, £20k @ 5% = £1k. Widely available in fixed rate & within touching distance for easy access.0
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