Government tax receipts on interest being paid this year ??

zagfles

eskbanker said:

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

And massively outweighed by the higher borrowing costs the govt is facing due to rising interest rates, yields on gilts have risen massively compared to a year ago, so any extra revenue the govt gets from tax on savings accounts will be a tiny fraction of the extra cost of the huge debt run up since the financial crisis, COVID etc.,

masonic

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

masonic

Bigwheels1111 said:

wmb194 said:

Bigwheels1111 said:

masonic said:

wmb194 said:

jimjames said:

Considering that until recently all interest was taxed at source and you could only get tax refunded if below income threshold plus availability of ISA wrapper etc it all seems a bit of fuss about nothing

Yes, and the annual Isa allowance used to be nowhere near £20,000... What was it? £7k?

Yes, and to use the full £7k allowance, you needed to put £4k of it into S&S. If you just used a cash ISA it was £3k.

Personally, I'd be in favour of adjusting income tax thresholds and taxing interest at source again. Simpler, more progressive, giving those without savings the benefit of using it against income.

Sorry but I’m in the other boat.
This suits me fine, I get paid 45.6p an hour as a 24 hour carer for my friend.
A whole £4010 a year with my £10 Christmas bonus.
I get a nice income from my savings pots and will do for the next 5 - 7 years.
This is the only reason I can survive.
All I need do is file a self assessment return once a year.
Your way would mean I don’t get all my money but have to beg for it back.

No, you wouldn't have to beg or wait. Under the previous system you could register with banks and BS' an R85* form for each account and have interest paid gross.

*There was another one - R43? - if you lived abroad.

Ok, But that would be like 20/30 accounts.

Self assessment form only needs 2 boxes filled out for me, Income and savings.

Presumably you wouldn't qualify for gross interest under the prior system if you need to fill out a tax return. There must be some unpaid tax due or it wouldn't be necessary. Historically only those who wouldn't pay any income tax on their savings could use a R85. Meaning that you would overpay over the course of the tax year, and be refunded the excess when you file. Admittedly this does put you in a group of people for whom this would be less favourable than the current system. Though HMRC is making baby steps towards making people on SA pay an up front instalment towards their predicted tax for the following tax year, which will have largely the same effect.

zagfles

masonic said:

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

They have all used the term "tax trap" in other contexts, not just quoting AJ Bell. For instance https://www.theguardian.com/uk-news/2018/nov/03/tax-trap-budget-children

masonic

zagfles said:

masonic said:

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

They have all used the term "tax trap" in other contexts, not just quoting AJ Bell. For instance https://www.theguardian.com/uk-news/2018/nov/03/tax-trap-budget-children

Seems appropriate for that particular context, where your marginal rate of tax is higher than others either side of your income bracket. Such language becomes sensationalist when it is a distortion of the truth. In the context of savings interest, people are paying tax on some of their interest because interest rates are higher. Some time ago most paid tax on all of it. This is not a 'tax trap'.

zagfles

masonic said:

zagfles said:

masonic said:

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

They have all used the term "tax trap" in other contexts, not just quoting AJ Bell. For instance https://www.theguardian.com/uk-news/2018/nov/03/tax-trap-budget-children

Seems appropriate for that particular context, where your marginal rate of tax is higher than others either side of your income bracket.

Indeed. AJ Bell are using Guardian language   The point is, it's a common term used by all journalists. Not, as the PP implied, used just by inferior downmarket plebian papers, and which shouldn't be used by a "respected investment platform"

masonic

zagfles said:

masonic said:

zagfles said:

masonic said:

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

They have all used the term "tax trap" in other contexts, not just quoting AJ Bell. For instance https://www.theguardian.com/uk-news/2018/nov/03/tax-trap-budget-children

Seems appropriate for that particular context, where your marginal rate of tax is higher than others either side of your income bracket.

Indeed. AJ Bell are using Guardian language   The point is, it's a common term used by all journalists. Not, as the PP implied, used just by inferior downmarket plebian papers, and which shouldn't be used by a "respected investment platform"

I expanded on that point in an edit just a bit too late, so to repeat my addition: "Such language becomes sensationalist when it is a distortion of the truth. In the context of savings interest, people are paying tax on some of their interest because interest rates are higher. Some time ago most paid tax on all of it. This is not a 'tax trap'."

I don't think "all journalists" can be fairly accused of introducing the term in a sensationalist context.

zagfles

masonic said:

zagfles said:

masonic said:

zagfles said:

masonic said:

zagfles said:

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.

A term also used by the BBC, the Telegraph, the Guardian, the FT, the Independent and probably most other media sources. So maybe less of the journalistic snobbery?

The media has no choice but to report what was actually stated by AJ Bell. Had AJ Bell not used such language, it would not have appeared in some of those media sources, but may have appeared in others. That said, I could see Martin Lewis himself using such language to describe the fiscal drag.

They have all used the term "tax trap" in other contexts, not just quoting AJ Bell. For instance https://www.theguardian.com/uk-news/2018/nov/03/tax-trap-budget-children

Seems appropriate for that particular context, where your marginal rate of tax is higher than others either side of your income bracket.

Indeed. AJ Bell are using Guardian language   The point is, it's a common term used by all journalists. Not, as the PP implied, used just by inferior downmarket plebian papers, and which shouldn't be used by a "respected investment platform"

I expanded on that point in an edit just a bit too late, so to repeat my addition: "Such language becomes sensationalist when it is a distortion of the truth. In the context of savings interest, people are paying tax on some of their interest because interest rates are higher. Some time ago most paid tax on all of it. This is not a 'tax trap'."

I don't think "all journalists" can be fairly accused of introducing the term in a sensationalist context.

A "distortion of the truth"? Sensationalist? Seriously? A spike in a marginal rate is not a "tax trap" either. It's never literally "the truth". It's not a "trap". 

It's a commonly used journalistic metaphor, usually used to describe a situation where people may pay more tax than they were expecting. This may well apply to saving interest as most people haven't been paying tax on interest due to recent low rates, and before the PSA most people automatically had basic rate tax deducted so (if basic rate taxpayers) they didn't need to pay any more.

Anyway, it was the "language" that was being complained about as if it's only used by inferior publications, not worthy of "respected investment platforms" . I keep thinking of Hyacinth Bucket

masonic

zagfles said:

A "distortion of the truth"? Sensationalist? Seriously? A spike in a marginal rate is not a "tax trap" either. It's never literally "the truth". It's not a "trap".

This spike in marginal rate fits my criteria for a trap: it was put in place stealthily, it remains hidden, and its easy to remain unaware of it until falling into it.

zagfles said:

Anyway, it was the "language" that was being complained about as if it's only used by inferior publications, not worthy of "respected investment platforms" . I keep thinking of Hyacinth Bucket

I can't speak to the contents of anyone else's mind, but I didn't read it like that. DM and DE have a reputation for sensationalism. Like the annual repeated winter warnings of an impending "arctic storm" that turns out to be a slight ground frost. In my view, the only print media that gets close to reporting accurately is the FT, because its target clientele are in the business of making expensive investment decisions and need to know the truth. You'll sometimes find economic news reported there that is unrecognisable when covered elsewhere.

zagfles

masonic said:

zagfles said:

Anyway, it was the "language" that was being complained about as if it's only used by inferior publications, not worthy of "respected investment platforms" . I keep thinking of Hyacinth Bucket

I can't speak to the contents of anyone else's mind, but I didn't read it like that. DM and DE have a reputation for sensationalism. Like the annual repeated winter warnings of an impending "arctic storm" that turns out to be a slight ground frost. In my view, the only print media that gets close to reporting accurately is the FT, because its target clientele are in the business of making expensive investment decisions and need to know the truth. You'll sometimes find economic news reported there that is unrecognisable when covered elsewhere.

The DE certainly has where it comes to weather, but then so are a lot of the media when they make out the latest heatwave, downpour or storm is a sign of worse to come. But on finance, DM personal finance stuff is usually pretty good compared to most papers, they have the likes of Steve Webb writing articles often quoted here. Not at the level of the FT for the more in depth stuff obviously, but for general personal finance as good as the Guardian, BBC, Telegraph etc and generally no more "sensationalist".