Avoiding 40% Tax

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82180284#Comment_82180284

I would prefer it if they raised tax rates instead of using fiscal drag, as it's a much fairer and more honest way of raising taxes. But they won't, for reasons already discussed.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82180379#Comment_82180379

Some rates have been raised though.

They no doubt don't impact nearly as many people as changes to the rates for earnings or pension income would but they are still higher rates.

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82180382#Comment_82180382

I was referring to to tax rates on pensions and earnings, as that's what this thread is discussing.

zagfles

Just as a matter of interest I worked out whether indexation or a 2% rise in higher rate tax is better or worse for various income levels.

If the chancellor decided to increase HRT to 42% plus restore indexation to the PA and HRT threshold:

For anyone earning under £74k, they'd be better off this April. Over £74k, they'd be worse off.

From April 2028 (assuming the same inflation as now), everyone, regardless of income, will be better off.

(for the pedants, except obviously for those earning under the PA who pay no tax anyway)

A 2% rise in the HRT rate is better than 2 years of fiscal drag for everyone and 1 year for the vast majority.

We've so far had 5 years of fiscal drag and another 5 to go.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82180432#Comment_82180432

We've so far had 5 years of fiscal drag and another 5 to go.

Although I would not be surprised if some increase in personal allowances features in some party manifestos for the next election, maybe it will be in all of them.