Abolition of the 10% Tax Band and reduction of Standard rate to 20% [Merged]

Billionpounddreamer

EdInvestor wrote: »

I suppose we should just mention that along with the abolition of the 10% band, basic rate tax is also being reduced from 22% to 20%.

And when you read about all the fuss about CGT, you might not even notice that it's being reduced from a max of 40% to a flat rate of 18%....

...or that the whole point of the changes in the IHT allowances was to make it easy for all the families who were only in it because of the rise in house prices to stay out without having to go through all sorts of expensive legal malarkey....

But this is probably not relevant to the rant.....:rolleyes:

Another victim of political propaganda.

Surely Borwn is guilty of giving with one hand and taking away with the other. Was it not the reduction in the 22% rate that was publicised, in an attempt to win popularity? If I remember correctly, Brown made no mention of the abolition of the 10% band in his Budget speech. I think he might have been looking at leadership when he promoted his reduction, as opposed to his abolition of a basic rate.

The flat rate of 18% which you refer to benefits only the rich. After an annual exemption of £8,800, most people would pay 10% or less on gains because of their level of earnings, under the current system. The increase to 18% (which was introduced to take even more money from private equity firms) will have an adverse affect on the majority of normal people who, for example, who have niherited shares and wish to sell them in two years time.

There was practically no change when the IHT limit was "changed". You refer to such beneficiaries of this change being householders. These are possibly the only beneficiaries.
The change concerned the £300,000 tax free limit being raised to £600,000. However, the £600,000 could already have been utilised by passing on £300,000 to children upon death (tax free) with the remaining being passed to the surviving spouse, who, upon their own death, could leave another £300,000 tax free, therefore using a £600,000 tax free limit. The only advantage is that people who have paid off their mortgage already, whose spouse would be reluctant to sell the property upon their partners death, would be able to pass on a larger amount of assets to their children, without the need of selling up and splitting the cash in order to utilise the £600,000.

Do you really think the government is acting in our own interests when it comes to tax?

Just the other day they introduced plans to tax pidgeon racing. I would say the only thing they haven't taxed is air, but even that's not true, what with all the hikes in the environmental "green" taxes, which, by the way, aren't even used to stopper pollution.

dunstonh

The reduction to 18% is given with one hand but the loss of reliefs takes it back with another. Long term capital purchases stand to suffer a lot more. Indeed,this could be viewed as a swipe at the buy to let landlords.

ManAtHome

A swipe at the "in it for the long haul" BTLs and other small businesses - sure somebody in the HoP* described it as a "Spiv's budget", quite right too.

*occasionally referred to as the House of Commons, but I prefer House of Pr@ts...

EdInvestor

Billionpounddreamer wrote: »

The flat rate of 18% which you refer to benefits only the rich.

I think you'll find there are a lot of non-rich people who are now investing in property to provide a long term pension fund.They will be big beneficiaries. Did you think that all people who pay higher rate tax were rich?It kicks in at around 35k after all, that's only about a third more than the average wage.This measure will be very helpful in encouraging people to save and invest.

After an annual exemption of £8,800

It might be worth checking your figures, the exemption is now 9,200.

... most people would pay 10% or less on gains because of their level of earnings, under the current system.

Which people are these?Are you referring to people who have long term capital gains, accumulated because they didn't use their annual tax free allowance, which they were hoping to reduce instead by taper relief? This would be the only way that a cut from 40% to 18% could be presented as a rise from 10% to 18% (and you say I'm a victim of political propaganda!)

If they want to realise the gain under the old system they can do so now: the new simplified system with low rate will be much better for the vast majority.

There was practically no change when the IHT limit was "changed". The change concerned the £300,000 tax free limit being raised to £600,000. However, the £600,000 could already have been utilised by passing on £300,000 to children upon death (tax free) with the remaining being passed to the surviving spouse, who, upon their own death, could leave another £300,000 tax free, therefore using a £600,000 tax free limit. The only advantage is that people who have paid off their mortgage already, whose spouse would be reluctant to sell the property upon their partners death, would be able to pass on a larger amount of assets to their children, without the need of selling up and splitting the cash in order to utilise the £600,000.

That's right, the change means that ordinary people who are over the old limit because of house prices don't have to try and understand the above gobbledegook any more.They are automatically out of the IHT net without doing anything. Hurrah

Do you really think the government is acting in our own interests when it comes to tax?Just the other day they introduced plans to tax pidgeon racing.

No they didn't, this is just spin.They just failed to exempt pigeon racing as one of the dozens (thousands?) of sports to which the tax is not applicable: no doubt this will be corrected along with other more obscure sports and pastimes.

jem16

EdInvestor wrote: »

I think you'll find there are a lot of non-rich people who are now investing in property to provide a long term pension fund.They will be big beneficiaries. Did you think that all people who pay higher rate tax were rich?It kicks in at around 35k after all, that's only about a third more than the average wage.This measure will be very helpful in encouraging people to save and invest.

Might be worth checking your figures. Higher rate tax kicks in at those earning £39,825 - almost £40k.

flashnazia

EdInvestor wrote: »

I suppose we should just mention that along with the abolition of the 10% band, basic rate tax is also being reduced from 22% to 20%.

And when you read about all the fuss about CGT, you might not even notice that it's being reduced from a max of 40% to a flat rate of 18%....

...or that the whole point of the changes in the IHT allowances was to make it easy for all the families who were only in it because of the rise in house prices to stay out without having to go through all sorts of expensive legal malarkey....

But this is probably not relevant to the rant.....:rolleyes:

Yeah but that doesn't help me!

Another take on it is that the abolition of the 10% rate affects women more as women are more likely to be paid less and more likely to work part time (like I do).

And I don't care for people who are going to inherit large amounts just because property prices have gone through the roof. I feel I have to indirectly pay for this change to the IHT allowance through my increase in income tax. That is simply not fair!

misscomickat

Absolutely disgusting. I'm a young single person with no children who works 3 jobs, and will be hit by this. I try to be responsible and save up for things and want to start saving for the future but they just make it impossible.

flashnazia

Iamthesmartestmanalive wrote: »

The OP is incorrect someone earning 19k will actually pay £49.90 less in tax next year:D

where did you get this figure from? did you use next years tax free allowance to calculate or what?

flashnazia

misscomickat wrote: »

Absolutely disgusting. I'm a young single person with no children who works 3 jobs, and will be hit by this. I try to be responsible and save up for things and want to start saving for the future but they just make it impossible.

We'll just have to get pregnant for our income if we want New Labour to look after us!

kennyboy66_2

flashnazia wrote: »

I don't know if this has been raised before but I'll remind you again anyway.

Low earners (less than 19k) will have to pay more tax next year from april because of the abolition of the 10p tax band. I'm getting more and more angry about this. Why is Brown penalising low earners like this?

is it too late? Is there anything we can do (like the business leaders who are protesting about abolition of taper relief)?

Makes you want to give up working....

Oops !!!!!!!!!!!!!!