Are these figures real?

missprint

Three people live in a town. They each live in a Band C house and pay around £1000 a year in full Council Tax. They are all childless.

A earns £10000
B earns £20000
C earns £30000

Pre-budget A paid 10% tax on earnings (£1000) plus his Council tax (effectively another 10%) and so paid 20% in tax.

Pre-budget B paid 22% on earnings (£4400) plus his Council tax (£1000) and so paid 27% in tax.

pre-budget C paid 22% on earnings (£6600) plus his Council tax (£1000) and so paid 25.3% in tax.

BUT

Post-budget A will pay 20% tax on earnings (£2000) plus his Council tax of £1000, making 30% in tax.

Post-budget B will pay 20% tax on earnings (£4000) plus his Council tax of £1000, making 25% in tax.

Post-budget C will pay 20% tax on earnings (£6000) plus his Council tax of £1000, making 23.3% in tax.


Am I missing something or have lower income childless couples been completely shafted?

Andy_L

Pretty much. Although you've ignored the effect working tax credits, NI rates & Personal allowances.

CLAPTON

No the figures you quoted are all wrong

e.g

pre budget
A. didn't pay 10% (£10000)

because he had a tax free allownace of 5225)
then paid 10% tax on 2230 i.e. 223
and then paid 22% on the remainder i.e 22% on 2545 = 560
i.e total tax of 783

he also paid NI contributions of 10,000 - 5225 = 4775 at 11% (assuming he is not contracted out) = 525

so total deductions would be 1,308

and also paid council tax, vat, petrol tax etc.

maybe he got something back ..but lets not go there

missprint

Yes, I was being too simplistic. But it still seems the people who can least afford it are bearing the brunt. I feel for those right on the edge with their mortgage payments, not entitled to any WTC or child benefits, who have to pay full whack for everything such as prescriptions, and now get a nice incentive to give up and go and live in Matabeleland. Roll on the next election.

Al-boy

The next election will not help. When has Politics been for us? Taxes will remain as is or rise. Our already unaffordable lives will suffer more untill the revolution comes. We are too passive, to get lower taxes.

dori2o

missprint wrote: »

Yes, I was being too simplistic. But it still seems the people who can least afford it are bearing the brunt. I feel for those right on the edge with their mortgage payments, not entitled to any WTC or child benefits, who have to pay full whack for everything such as prescriptions, and now get a nice incentive to give up and go and live in Matabeleland. Roll on the next election.

So the tories can come back and privatise everything including the NHS, raise taxes as is the Tory way, take intrest rate control away from the BoE and increase it till no one can afford to pay back their credit/mortgages.

Don't get me wrong I'm not a fan of the current government by any means, but after the last tory Gov't would you trust them again.

andysstuff_2

Income Tax and Council Tax are two of a basket of both taxes (Income, NI, C Tax, VAT, Car Tax, Petrol Tax, Booze and Ciggies, the list goes on) and allowances (Tax Credits, Income Support, C Tax rebates, Free Pescriptons, Family Allowance again the list goes on) You can't look at any one (or 2) in isolation, you need to look at the whole basket to get a true picture of whether A, B and C are now better or worse off.

deedeeliz

I'm 24, have no children and am on a low income. I'll be worse off, and looking at entitled too i'm not eligable for tax credits or anything else -

stratty

dori2o wrote: »

So the tories can come back and privatise everything including the NHS, raise taxes as is the Tory way, take intrest rate control away from the BoE and increase it till no one can afford to pay back their credit/mortgages.

Don't get me wrong I'm not a fan of the current government by any means, but after the last tory Gov't would you trust them again.

A lot of the issue with interest rates when the Tories were last in power was when they tried to stay in the exchange rate mechanism.

Mikeyorks

missprint wrote: »

Am I missing something

Yes ..... all of your figures are completely wrong. You haven't given any of them personal allowances. You haven't allowed for the 10% rate band (pre-budget) for B and C. And A can never have paid £1000 at 10% ..... as the 10% band topped out at £223 tax paid (which, incidentally is therefore the most anyone can lose from it's abolition. And that's before taking into account the increase in personal allowances / new 10% band for savings etc)

Apart from that ......?

jamesd

Real figures are for tax and NI only and adding D at 40,000 a year:

A: 2007/8: 8689.10 2008/9: 8587.60
B: 2007/8: 15389.10 2008/9: 15487.60
C: 2007/8: 22089.10 2008/9: 22387.60
2007/8: 29273.60 2008/9: 29287.60

With 1,000 Council tax, percentage tax for each:

A: 2007/8: 23.1% 2008/9: 24.1%
B: 2007/8: 28.1% 2008/9: 27.6%
C: 2007/8: 29.7% 2008/9: 28.7%
2007/8: 29.3% 2008/9: 29.3%

But now adding Working Tax Credits assuming they are all 45 and working more than 30 hours a week but only for 2008/9:

A: 1144.20 WTC so 12.7%
B: nothing so 27.6%
C: nothing so 28.7%
nothing so 29.3%

Now with housing benefit and rent of 425 a month:

A: 132.3 Council Tax Ben, 2351.96 Housing Ben: -21.2% (12116.06 income)
B: nothing so 27.6%
C: nothing so 28.7%
nothing so 29.3%

A isn't exactly wonderfully off but is not paying any net tax at all, instead is getting subsidised by the other three. A's getting about what I actually spent last year and that's not a level that's difficult to live on - I didn't restrict myself.