April 2008 Income Tax and NI Changes: How will they affect you?

carolineb23

But you don't get tax credits unless you are living on your own do you? I have never been able to get them because I live with my partner even though my wages are low

Chiddles

But this doesnt include the tax free allowance though so the break-even threshold is £15000 plus the tax free allowance. Is that right???

Suzkin

I'm on WTC (earnings are less than £15kpa) and my wages are 'static' in that there is no pay rise from year to year (and no opportunity for progression or prospects - which feels even worse..). This means that even though I'm taxed more and to counter this, it appears the government might increase WTC, the overall effect means that I have become even more dependent on benefits than previously!

meester

Chiddles wrote: »

But this doesnt include the tax free allowance though so the break-even threshold is £15000 plus the tax free allowance. Is that right???

Not really.

It depends on your measure.

If wage inflation is 4%, then the break-even in terms of pecentage of income taken home comes at £18,320 (2007/08 money). Below this number you are worse off. Everyone above it is slightly better off.

Imani

well my employer may increase wages but i will not know about this untill i return. according to the listentotaxman i have lost a further 72+ quid so i will be worst off. i do get tax creds as i have 2 kids. i work 30+hours which is considered full time. but even worst i am on smp for a few more months, so i guess i will need to use my time off work to get a job working 25-30hours earning 15k or more. fingers crossed

lovingheart

Caterina wrote: »

I am really angry with the government with this budget, as I only earn around £7,000 per year my tax bill has been DOUBLED in a fell swoop! Up to now I have never reached the 22% mark as after allowance I only stayed within the 10%, now I shall pay 20% on the whole of my taxable income.

As always, the ones to lose out are the low earner and part timers, and usually these are women. So what's new....

Caterina

I am in the same situation and feel our Labour government betrayed workers on low incomes and brought more gloom and misery in their lifes. But what can you do?

ManAtHome

And if you're on standard-rate tax and pay into a pension it'll cost you more. At the moment it costs you 78p per pound you put in, from next year it'll cost you 80p.

Paul_Herring

ManAtHome wrote:

And if you're on standard-rate tax and pay into a pension it'll cost you more.

Erm - no it won't; it'll cost you exactly the same.

On £100 gross pay, you currently get taxed £22 and contribute £78 from net pay to get the £22 refund to contribute £100.

Next year, £100 will be taxed £20, you pay £80 net, to get £20 refunded to contribute £100.

Any perceived increase in net contribution is offset by an increase in net pay.

ManAtHome

Errm yes it will - on £100 gross you'd currently be taxed less than £22, even on "average wage", things are much worse near the bottom end.

meester

Paul_Herring wrote: »

Erm - no it won't; it'll cost you exactly the same.

On £100 gross pay, you currently get taxed £22 and contribute £78 from net pay to get the £22 refund to contribute £100.

Next year, £100 will be taxed £20, you pay £80 net, to get £20 refunded to contribute £100.

Any perceived increase in net contribution is offset by an increase in net pay.

Not really true, because you don't actually have to pay tax to get tax relief.

You can contribute £3,800 a year into a pension, without paying any income tax at all and still get tax relief at the basic rate. You have only contributed £3,800, and get £950 extra free.