Income Tax: Do you agree with the Govt’s changes? Poll results/discussion

Another_Ian

First post sorry if it goes wrong.

I recently wrote to my labour MP, a Government minister, to point out the fact that the Government 10% tax change meant that someone earning £7665 pa was giving £230 to a person earning £30500 and someone on the minimum wage was giving some £163 to a person earning £27000. I also pointed out that it now took 2.8 people on minimum wage to pay for an MP’s tax gain of £450.

The reply was a masterpiece of politician speak I quote 2 examples:-

1). Politician : ‘Unlike the tax credit the tax rate is not a targeted tax measure: all tax payers benefit from it including higher earners such as those on £100,000 a year, who would still only pay 10p in the pound on the first £2230 of their taxable income.’

Meaning: To make the system fairer we will take an additional £230 pa from the person on £7625 to contribute to the extra £450 we now give to that person on £100,000.

2). Politician: ‘For those not eligible for tax credits

---

the reforms to the tax and benefits system since 1997 mean that those individuals will still be £495 a year better off by April 2009’

Meaning: Last year ‘those individuals’, were £725 better off since 1997 and were 46% better off last year compared to now.

The above are my sums and my interpretation – perhaps a politician would care to comment.

Grebe

As a lifelong Lab voter I am stunned at what GB has done to me. I am a widow 51, cannot work through ill health. I live on a very small state pension and even smaller private pension from my late husbands employer, total monthly income after tax, approx £489 (sorry too angry to look out exact figure ). Because I have a widows pension I cannot receive invalidity. I payed £10 tax per month, now I pay £20. There is nothing in the rejigging of the proposals that would help me. I am fortunate that my son and daughter will help out when they can, the are both at uni and working part time. I wish I could find a way out of this, it's driving me crazy, and thanks to GB I will once again wake up in the morning doing bloody housekeeping sums in my head.:mad:

sallyhyde

If this Government were not so useless, they would be able to catch all of the high earners who get away with billions every year in tax dodges. By eliminating ALL of the tax bands and only having ONE band with a flat rate 10% on ALL earnings, we would all have more money in our pockets, the system would be a lot easier to control and everyone would know that they had paid the correct amount of tax. I defy anyone to say for sure that they have paid the correct amount, it is far too complicated and complex to try to work out and we have too many civil servants being paid a fortune. Good old Gordie does not want any of us to actually have any sort of a life, and I am sure he would be happier if we just gave him all of our wages every week/month and left us to forage in the woods for anything we could find to eat! I too am affected by this current fiasco and I am livid. Get him out and fast!

i1189

I seem to be one of the rare people who is actually slightly better off by GB's (what does that stand for? Greedy B***ard?) tax changes. Hmm, what shall I do with my extra £15 a month? I could spend it on my ever increasing grocery bill. Or I could put it towards my escalating fuel bill. Or I could give it to my mum, who will be about £30 a month worse off...

As Labour seem to have made life worse for just about everyone in the country, hopefully those people who voted for them in the last election (although I've no idea who they are - I've never actually met anyone who admits to voting for them) will vote for another party.

kitty1801

Hi

I understand your point and apologise if I meant that you could claim tax credits. To put things in perspective someone with an income of £13,000 would have paid the following in tax each month:

2005-06 £127.69 in Tax £74.36 in NIC
2006-07 £124.53 in Tax £72.93 in NIC
2007-08 £120.24 in Tax £71.50 in NIC
2008-09 £126.08 in Tax £69.12 in NIC

So from 2007-08 to 2008-09, you will notice an additional deduction of £3.84/month overall. Taxes do need to go up every year in line with everything else and taking it all into account, equates to a 1.8% increase in your deductions compared to last year...

saver67 wrote: »

TO CLAIM AND GET ANYTHING FROM WORKING TAX CREDIT THOUGH YOU HAVE TO BE ON AN EXTREMLY LOW INCOME IM ON 13K AND CANT CLAIM ANYTHING I DONT CLASS THIS AS A HIGH WAGE

kitty1801

It's not too difficult to work out your income tax but if you want an easy way to check, use http://www.listentotaxman.com/ it works out previous years tax as well..

sallyhyde wrote: »

If this Government were not so useless, they would be able to catch all of the high earners who get away with billions every year in tax dodges. By eliminating ALL of the tax bands and only having ONE band with a flat rate 10% on ALL earnings, we would all have more money in our pockets, the system would be a lot easier to control and everyone would know that they had paid the correct amount of tax. I defy anyone to say for sure that they have paid the correct amount, it is far too complicated and complex to try to work out and we have too many civil servants being paid a fortune. Good old Gordie does not want any of us to actually have any sort of a life, and I am sure he would be happier if we just gave him all of our wages every week/month and left us to forage in the woods for anything we could find to eat! I too am affected by this current fiasco and I am livid. Get him out and fast!

raclarke4567

I voted against as I am a pensioner and single so therefor am 1 of those who get NO tax credits/allowances. I continue to work and have now defered my pension as I was taxed so heavily on the additional amount of that pension it was ridiculous - for £420 per month pension actually "better off" by only £105!! tax code now changed for this year but still paid tax on a non-existant pension for 4 weeks ( presumably couldn`t be bothered to give 2 tax codes?).
When I started working the tax allowance of just under £20 was considered enough to live on, or a good contribution towards that depending on HOW one lived. Definitely NOT kept pace with that objective.
Various expenses contribute towards draining our finances that are very sneaky, 1 being the continued restrictions on claiming business petrol & motor expenses, still at 40p per mile/56p per mile depending on annual mileage. The self employed and those like myself whose companies pay mileage are penalised by this restriction - we are therefore subsidising the government AGAIN and this is yet ANOTHER tax on motoring.
Other concessions available have been dropped over the years like mortgage tax relief - gradually reduced in monetary terms but also by inflation- and then removed.
Pensions - the Treasury must save £millions because people save in other ways now reducing the amounts that are given in pension contribution tax relief.
ETC!

ceridwen wrote: »

I voted that I disapprove of the changes. I am glad taxrate of 22% has been amended to 20% - but it should not have been at the expense of removing the 10% tax rate.

I have a "vested interest" in this one - as I fall in the low salary bracket whereby I am going to lose out because of this. I know I wont see very much difference at all in my takehome pay - but that is only because this has happened at the same time as the raising of the Personal Tax Allowance for the year (which, incidentally, has not been raised enough to allow for inflation - so there has in effect been a real cut in how much we are allowed to earn before tax starts being payable on it).


Incidentally - it would be interesting if anyone could work out what the Basic Personal Allowance would be now if it had kept pace with inflation. There must be someone more maths-minded than myself who can find an online calculator showing what an amount of money in year x needed to be in year y to be the same in real terms (after allowing for inflation).

Thanks M.S.E. Martin for running this poll and giving people the links to work out their own position properly as to how they are affected.
It is all well and good for the Government to state one can get the lost money back in other ways - but that is not the case if your salary is the only income you get and you dont have children. I'm not eligible for Working Tax Credit or anything - because, though my income, is too low its not low enough to qualify for anything. Childless poorly-paid people copping it again in fact - but we must spend money on the priorities of course:rolleyes: - like letting the rich off the hook taxwise and, of course, covering the billions of £s for these endless conflicts (oil wars in Iraq, etc). (Just hasten to add for those not used to the British cynical sense of humour - I am very much against these oil wars.)

kitty1801

Hi

Bit confused about some of the comments you have made, you state you were getting pension of £420 per month but actually only getting £105 of it. Based on this income, last year you would only pay tax at 22%, so there is an obvious discrepancy there. If you were receiving state pension (which is taxable) then you need to include that as part of your taxable income and you would be taxed on the entire amount.

Not sure what you mean about tax codes - your state pension cannot be taxed at source so would never have a tax code operated. If the tax office got information about your state pension starting it is either because you or the DWP informed them of that and any overpaid tax would be refunded.

As for the mileage allowance, I personally think this is very generous. By my reckoning, for a car getting 45 miles/gallon (9.89 miles/litre) at £1.069/litre for petrol (current price in my area), you are paying 10p per mile for fuel. The remaining tax relief of 30p per mile covers your MOT and servicing costs. Remember that your Road tax and insurance would have been paid anyway and using your car for business does not adversely affect these payments.

raclarke4567 wrote: »

I voted against as I am a pensioner and single so therefor am 1 of those who get NO tax credits/allowances. I continue to work and have now defered my pension as I was taxed so heavily on the additional amount of that pension it was ridiculous - for £420 per month pension actually "better off" by only £105!! tax code now changed for this year but still paid tax on a non-existant pension for 4 weeks ( presumably couldn`t be bothered to give 2 tax codes?).
When I started working the tax allowance of just under £20 was considered enough to live on, or a good contribution towards that depending on HOW one lived. Definitely NOT kept pace with that objective.
Various expenses contribute towards draining our finances that are very sneaky, 1 being the continued restrictions on claiming business petrol & motor expenses, still at 40p per mile/56p per mile depending on annual mileage. The self employed and those like myself whose companies pay mileage are penalised by this restriction - we are therefore subsidising the government AGAIN and this is yet ANOTHER tax on motoring.
Other concessions available have been dropped over the years like mortgage tax relief - gradually reduced in monetary terms but also by inflation- and then removed.
Pensions - the Treasury must save £millions because people save in other ways now reducing the amounts that are given in pension contribution tax relief.
ETC!

icefall

Another_Ian wrote: »

First post sorry if it goes wrong.

I recently wrote to my labour MP, a Government minister, to point out the fact that the Government 10% tax change meant that someone earning £7665 pa was giving £230 to a person earning £30500 and someone on the minimum wage was giving some £163 to a person earning £27000. I also pointed out that it now took 2.8 people on minimum wage to pay for an MP’s tax gain of £450.

The reply was a masterpiece of politician speak I quote 2 examples:-

1). Politician : ‘Unlike the tax credit the tax rate is not a targeted tax measure: all tax payers benefit from it including higher earners such as those on £100,000 a year, who would still only pay 10p in the pound on the first £2230 of their taxable income.’

Meaning: To make the system fairer we will take an additional £230 pa from the person on £7625 to contribute to the extra £450 we now give to that person on £100,000.

2). Politician: ‘For those not eligible for tax credits

---

the reforms to the tax and benefits system since 1997 mean that those individuals will still be £495 a year better off by April 2009’

Meaning: Last year ‘those individuals’, were £725 better off since 1997 and were 46% better off last year compared to now.

The above are my sums and my interpretation – perhaps a politician would care to comment.

Great first post.

Doublespeak isn't it.

Wonder if they practise doublethink as well?

I read 1984 by George Orwell and there are certain aspects of what is going on today in the Uk that remind me powerfully of some of that book.

Mike_J

This year, for the first time in about 7 or 8 years our hosehold is better of due to the changes in direct taxation. Can I asked GB to review the previous years and send me a cheque for what I lost out! Remember that its not only the "low" paid who have lost the 10% band. In that case everybody earning about £8k has lost out. Before people so GB has done a u-turn and will compensate lets see the detail, after all politicians are very good at wording that announcement so that they may be factually correct but not in the spirit of the announcement.