Autumn Statement Predictions?

MattMattMattUK

I think there will be a significant IHT cut, likely to 10% or 20%, with a commitment to abolish it entirely "at a point where economic conditions allow". There will likely be some changes to corporation tax, either reducing the rises, or keeping in place what originally came in as the "super deduction" in some for, to encourage investment. 

I do not think that there will be any changes to the thresholds or rates of income tax as the Chancellor has already said he would stay away from inflationary tax cuts and any reduction in income tax would be inflationary. We might see some minor tweaks around fuel duty and perhaps a rise on tobacco duty, but that will probably be it. 

I expect benefits will be frozen again with an increase in sanctions, as well as the much mooted termination of benefit entitlement for those who refuse to engage with job hunting for more than six months. The triple lock will stay as next year is an election year, even if it should be abolished. 

If I were the Chancellor I would throw the whole lost at debt repayments, but that would require the government to admit that the debt is an issue and that they created the vast majority of it. 

Eldi_Dos

njm123 said:

 - not pensioners or the economically inactive living off savings income.    

Do not know if it was your intention to characterise pensioners as economically inactive but it is not a description I would recognise.

westv

Eldi_Dos said:

njm123 said:

 - not pensioners or the economically inactive living off savings income.    

Do not know if it was your intention to characterise pensioners as economically inactive but it is not a description I would recognise.

It is an official description.

"Economically inactive people are simply those who are neither employed nor unemployed; they're not in paid work, but they're also not looking for a job or available to start work. You might be economically inactive for a number of reasons, such as being retired, a student or too ill to work."

Eldi_Dos

@ Silvertabby
     I would think most pensioners in their heart of hearts realise they are in a fortunate position if they are paying tax on their income.

Silvertabby

Eldi_Dos said:

@ Silvertabby
     I would think most pensioners in their heart of hearts realise they are in a fortunate position if they are paying tax on their income.

Exactly.  Total grocery bill apart, our biggest joint outgoings as tax paying pensioners is our tax bill.  No complaints here.

Eldi_Dos

westv said:

Eldi_Dos said:

njm123 said:

 - not pensioners or the economically inactive living off savings income.    

Do not know if it was your intention to characterise pensioners as economically inactive but it is not a description I would recognise.

It is an official description.

"Economically inactive people are simply those who are neither employed nor unemployed; they're not in paid work, but they're also not looking for a job or available to start work. You might be economically inactive for a number of reasons, such as being retired, a student or too ill to work."

As I said it is not a description I recognise,we pay Vat same as anyone else,we pay income tax if above a certain level, my pension administrator makes sure the chancellor gets their cut every month. I am sure the council is glad to receive my donation at the begining of the month.
If you go down any High St mid week it is noticeable how many pensioners use the coffee shops, who provide employment and pay business rates.
So not what I would characterise as economically inactive.

Pat38493

Eldi_Dos said:

westv said:

Eldi_Dos said:

njm123 said:

 - not pensioners or the economically inactive living off savings income.    

Do not know if it was your intention to characterise pensioners as economically inactive but it is not a description I would recognise.

It is an official description.

"Economically inactive people are simply those who are neither employed nor unemployed; they're not in paid work, but they're also not looking for a job or available to start work. You might be economically inactive for a number of reasons, such as being retired, a student or too ill to work."

As I said it is not a description I recognise,we pay Vat same as anyone else,we pay income tax if above a certain level, my pension administrator makes sure the chancellor gets their cut every month. I am sure the council is glad to receive my donation at the begining of the month.
If you go down any High St mid week it is noticeable how many pensioners use the coffee shops, who provide employment and pay business rates.
So not what I would characterise as economically inactive.

I believe economists define the term in a particular way which means that you are not doing paid work which is adding to the national productivity in that fiscal period.  To put it another way - imagine everyone in the country won the lottery tomorrow and all quit their jobs.  The economy would not function anymore because nobody would make the coffee to sell to you.

It's a technical term used by economists and is not meant to imply that those people are somehow shirking or suchlike.

Also - if the type of activities you describe above are just as valuable to the economy as having paid work doing something specific, why is the government so keen to persuade early retirees to get a job?

Silvertabby

xylophone said:

 Something like 40% of UK adults don't pay income tax.  

Those filthy plutocrats on an income of under £242 a week?

To be fair, many are on much more than that if they receive non-taxable means tested benefits.  A friend's late mother in law received the State pension, pension credit, housing benefit, council tax benefit, etc.  Easily £18K a year tax free.

Yes, I know that not everyone is in that situation, and my heart goes out to those who are genuinely struggling - but I do feel that some benefits should be targetted at those who really need them, instead of being scatter-gunned to everyone who just happens to be over a certain age.

We used to give our winter fuel allowance to two elderly family members who needed it more than we did.  Now they have sadly passed away, we will give this year's £500 to two younger relatives who are on just the minimum wage.  

westv

Eldi_Dos said:

westv said:

Eldi_Dos said:

njm123 said:

 - not pensioners or the economically inactive living off savings income.    

Do not know if it was your intention to characterise pensioners as economically inactive but it is not a description I would recognise.

It is an official description.

"Economically inactive people are simply those who are neither employed nor unemployed; they're not in paid work, but they're also not looking for a job or available to start work. You might be economically inactive for a number of reasons, such as being retired, a student or too ill to work."

As I said it is not a description I recognise,we pay Vat same as anyone else,we pay income tax if above a certain level, my pension administrator makes sure the chancellor gets their cut every month. I am sure the council is glad to receive my donation at the begining of the month.
If you go down any High St mid week it is noticeable how many pensioners use the coffee shops, who provide employment and pay business rates.
So not what I would characterise as economically inactive.

So? You seem to be getting hot under the collar about a technical description. 
Being "economically inactive" has nothing to do with how much money you have.

MattMattMattUK

Audaxer said:

Silvertabby said:

QrizB said:

2nd_time_buyer said:

A 1% cut in the basic income tax rate will probably cost less than unfreezing the rates.

1% off the basic rate is a 5% reduction on the tax tackle on the BR band. It will cost about as much as raising the personal allowance by £1500.

Raising the personal allowance will disproportionately help pensioners, and old people vote.

An increase in the personal allowance would surely be easier (and therefore cheaper) to administer?  It would benefit most people - and it would stop the whines from certain members of the pensioner community who want bigger State pensions, but then express their shock and horror at the indignity of being 'dragged into paying tax'.

But, at the end of the day, you can't please all of the people all of the time.  Something like 40% of UK adults don't pay income tax.  Not one penny.  So any tax cuts, by whatever means, will undoubtably be met with screams of "but what about me?"

Yes, I find it strange when I hear complaints about people being being dragged into paying tax, or dragged into the higher rate tax band. I personally would be very happy to have enough income to get into the higher rate tax band.

The thing is £50k pa is not actually that big an income, so for those people to start paying the higher rate, as well as losing things like child benefit does feel a little harsh to those who have to pay it. Though that is probably skewed by anyone earning under £50k actually pays very little tax by international comparisons, so when the rate suddenly jumps up it feels a bit harsh.

As a comparison of tax free allowances, the one on the UK is very large, which skews people's perception.
UK - £12,570
France - £8,500
Germany - £8,035
Norway - £4,067
The Netherlands - £0

	Inc.	Tax	Tax %	Inc.	Tax	Tax %	Inc.	Tax	Tax %	Inc.	Tax	Tax %
UK	£  25k	£    3,978	15.91%	£  50k	£  11,978	23.96%	£100k	£  32,951	32.95%	£500k	£224,722	44.94%
Fra	£  25k	£    4,775	19.10%	£  50k	£  13,965	27.93%	£100k	£  36,923	36.92%	£500k	£225,000	45.00%
Ger	£  25k	£    7,247	28.99%	£  50k	£  18,459	36.92%	£100k	£  42,110	42.11%	£500k	£227,287	45.46%
Nor	£  25k	£    5,071	20.28%	£  50k	£  13,787	27.57%	£100k	£  36,536	36.54%	£500k	£225,689	45.14%
Ned	£  25k	£    5,432	21.73%	£  50k	£  17,830	35.66%	£100k	£  45,988	45.99%	£500k	£239,680	47.94%

In the lower earnings brackets those in the UK pay a much lower effective rate of income taxation, however at the higher end we are largely in line with international norms. The bottom two thirds of earners in the UK pay the lowest effective rate of income taxation in the EU, where as the top third pay the fifth highest. This has the effect that many people are very used to paying little tax, and in the majority (55% of households) are used to actually being paid more in cash benefits than they pay in tax, so when people do reach a level where they start to properly pay tax it fees like a shock to the system.

As you can see from the below, the effective rate of income taxation rises rapidly, additionally there will be benefits paid to the majority of households on lower incomes, which means that 55% of households actually have negative effective rates of income taxation, meanwhile the difference between £50,000 and £60,000 for an earner with two children is significant, they face an effective rate of income taxation of 62.5% on their income between £50k and £60k, which is punitive. 


Pure PAYE

Gross	Net	Tax Paid	%
£      12,500.00	£   12,500.00	£                    -	0.00%
£      15,000.00	£   14,222.00	£           778.00	5.19%
£      20,319.00	£   17,839.00	£        2,480.00	12.21%
£      25,000.00	£   21,022.00	£        3,978.00	15.91%
£      50,000.00	£   38,022.00	£      11,978.00	23.96%
£      75,000.00	£   52,549.00	£      22,451.00	29.93%
£    100,000.00	£   67,049.00	£      32,951.00	32.95%
£    125,000.00	£   75,549.00	£      49,451.00	39.56%
£    150,000.00	£   89,778.00	£      60,222.00	40.15%
£    200,000.00	£116,278.00	£      83,722.00	41.86%
£    250,000.00	£142,778.00	£    107,222.00	42.89%
£    500,000.00	£275,278.00	£    224,722.00	44.94%
£ 1,000,000.00	£540,278.00	£    459,722.00	45.97%

Accounting for loss of Child benefit, two children.

Gross	Net	Tax Paid	%
£      50,000.00	£   40,096.80	£        9,903.20	19.81%
£      60,000.00	£   43,849.00	£      16,151.00	26.92%

The UK tax system is broken and needs reform, not because as many like to falsely claim that "the rich" or "high earners" do not pay enough, but because everyone else outside that group does not pay enough.