£20,000 tax limit

Cobbler_tone

Anyone else fed up of £20k tax threshold click bait articles in their feeds? It is never going to happen, regardless of how many hundreds of thousands sign a petition.

I might start my own to decrease the threshold to £10k and up the 40% band to £80k 

Flugelhorn

yes please! 

MattMattMattUK

Personally if I had the choice I would abolish the tax free allowance entirely, abolish most other allowances and combine Income Tax and NI.

Cobbler_tone

MattMattMattUK said:

Personally if I had the choice I would abolish the tax free allowance entirely, abolish most other allowances and combine Income Tax and NI.

That sounds sufficiently complicated enough to get some extra stealthy tax out of people! 

DoctorStrange

MattMattMattUK said:

Personally if I had the choice I would abolish the tax free allowance entirely, abolish most other allowances and combine Income Tax and NI.

A tax free allowance is sensible IMO to cover the basics, and probably should be set at £20k with no tapered losses at e.g. £60k or £100k.

Everything after that, regardless of source, would be taxed at 33.3% (with no NIC) in my world.

Cover the basics, then 1/3 to the state and 2/3rds to yourself seems fair (albeit admittedly I've no actual idea how much that might cost 🤣)

eskbanker

Cobbler_tone said:

Anyone else fed up of £20k tax threshold click bait articles in their feeds? It is never going to happen, regardless of how many hundreds of thousands sign a petition.

I might start my own to decrease the threshold to £10k and up the 40% band to £80k 

News to me that there was any such discussion going on at all!  I don't recall seeing any mention of it on here, and initially thought you were referring to the cap on annual ISA contributions, which has been the subject of some visible (to me) speculation....

SVaz

I’d prefer a joint married tax allowance of at least £30k as one person generally has a higher income, especially in retirement or during things like maternity leave.  

I’m sure I’ve read that Germany has such a system. 

Cue calls of ‘unfair’ !  😉

Cobbler_tone

eskbanker said:

Cobbler_tone said:

Anyone else fed up of £20k tax threshold click bait articles in their feeds? It is never going to happen, regardless of how many hundreds of thousands sign a petition.

I might start my own to decrease the threshold to £10k and up the 40% band to £80k 

News to me that there was any such discussion going on at all!  I don't recall seeing any mention of it on here, and initially thought you were referring to the cap on annual ISA contributions, which has been the subject of some visible (to me) speculation....

*Spoiler alert* The 'huge' update is that there are no plans.

https://www.express.co.uk/finance/personalfinance/2018975/petition-increase-personal-tax-allowance-20-000-receives-huge-update-treasury-responds

eskbanker

Cobbler_tone said:

eskbanker said:

Cobbler_tone said:

Anyone else fed up of £20k tax threshold click bait articles in their feeds? It is never going to happen, regardless of how many hundreds of thousands sign a petition.

I might start my own to decrease the threshold to £10k and up the 40% band to £80k 

News to me that there was any such discussion going on at all!  I don't recall seeing any mention of it on here, and initially thought you were referring to the cap on annual ISA contributions, which has been the subject of some visible (to me) speculation....

*Spoiler alert* The 'huge' update is that there are no plans.

https://www.express.co.uk/finance/personalfinance/2018975/petition-increase-personal-tax-allowance-20-000-receives-huge-update-treasury-responds

Yes, the petition was updated last week with the government's response, the key section of which is the confirmation that "The Government has no plans to increase the Personal Allowance to £20,000".

Then again, the proposal wasn't exactly fiscally literate:

We think it is abhorrent to tax pensioners on their state pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth.

and the assertion that it would "allow pensioners a decent income" conveniently ignores the negligible tax that would be involved, although that might itself be the basis of a more coherent argument, i.e. that the cost of collecting such a small sliver of incremental tax might outweigh the benefits of doing so!

Cobbler_tone

It can't have been a good idea as only 0.3% of the constituents in my area (or pretty much any area) signed it. 

eskbanker

Cobbler_tone said:

It can't have been a good idea as only 0.3% of the constituents in my area (or pretty much any area) signed it. 

Not sure you can really judge the merit (or otherwise) of any proposal solely by the number of signatures on a petition - as above, I wasn't aware of its existence and don't recall reading any mention of it on here.

Having said that, such demands need to be properly thought through to gain any meaningful traction, and it's obviously very easy for folk to seek lower tax burdens without actually bothering to come up with any credible suggestions about how that government revenue shortfall would be made up!