The Gordon Brown 20% Tax Con.

mitchaa

The £18500 'limit' broadly being sprouted on this thread does not exist and never has done. An employee who pays both NI and IT at £18500 earnings will be better off than before.

Its those that are on incomes of below £15000 that will be worse off.

The £18500 being spoken about is derived from IT only, but there is a rebate on NIC to offset.

Last year you would have paid 11% NI on earnings over £100pw. This year you pay 11% on earnings over £105, so someone earning £15,000 this year will pay...

Example for 08/09 tax year...

Salary = £15000
Allowance = £105x52 = £5460
Taxable = £9540
NIC due at 11% = £1049.40

Example from last year.

Salary £15000
Allowance = £100x52 = £5200
Taxable = £9800
NIC due at 11% = £1078

So a person earning £15000 will save £28.60 per year in national insurance. This is offset against the increased income tax (IT) due so a person earning £15000 will be no better or worse off before.

treliac

An employee who pays both NI and IT at £18500 earnings will be better off than before.

I think many of the contributors here are retired and do not pay NI.

mitchaa

treliac wrote: »

I think many of the contributors here are retired and do not pay NI.

That will be the reason why to the £18500 figure then.

Its £15000 for those who pay both IT and NIC.

dwileflunker

mitchaa wrote: »

That will be the reason why to the £18500 figure then.

Its £15000 for those who pay both IT and NIC.

The sad thing is that someone who doesn't pay NIC but pays IT falls into the catagory of the less your income is the more you lose out. I'm sure that was not what the government intended but it just goes to show the limitations of the people now running the country when this was not forseen. It's not rocket science, just a bit of fairly simple maths and they don't seem to be able to get even the simple things right. Perhaps even more annoying is that when shown to be wrong they won't admit it and still won't do anything to correct the anomaly.

Errata

It's not sad - it's completely outrageous, given taxpayers are paying Brown's TV licence !

seven-day-weekend

dwileflunker wrote: »

The sad thing is that someone who doesn't pay NIC but pays IT falls into the catagory of the less your income is the more you lose out. I'm sure that was not what the government intended but it just goes to show the limitations of the people now running the country when this was not forseen. It's not rocket science, just a bit of fairly simple maths and they don't seem to be able to get even the simple things right. Perhaps even more annoying is that when shown to be wrong they won't admit it and still won't do anything to correct the anomaly.

Yes - my husband falls into this category. He is 59 and his income is less than 10 grand from his Teachers' Pension and a bit of Incapacity Benefit.

He will have to pay more tax - I think around £30 a month which is a lot on his income.

del1001

Errata wrote: »

It's not sad - it's completely outrageous, given taxpayers are paying Brown's TV licence !

yes, and just about everything else as well :mad:

margaretclare

Today's news about this: http://news.bbc.co.uk/1/hi/uk_politics/7353945.stm

I like Frank Field's comments. He was, you'll remember, the man who was asked by Blair to 'think the unthinkable' about overhauling the complete benefits system. He came up with a report which was sunk without trace, as was his career.

He's going to be one of the speakers at a conference on 26th April titled 'The Future of England'. http://ourkingdom.opendemocracy.net/2008/02/14/the-future-of-england/

Errata

Frank can bang on as much as he likes, he won't be taken any notice of.

[Deleted User]

lets get down to actual figures. I am a 60 year old woman. My total income is £11911. My tax liability will be approx £1295. This is approx £645 more than if tax were at 10%. We are living off my pension plus savings at the moment and choose to drawdown my dh`s pension in 4 years time

Reality has hit home re the 20%. Is there a petition to sign anywhere?

edit: whoops the maths is wrong. Thank you penrhyn