Chancellor raises personal allowances in 2008/09

Mikeyorks

As also confirmed on the HMRC site :-

http://www.hmrc.gov.uk/news/may13.htm

Pennywise wrote:

Just think of the millions this u-turn is going to cost the country. HMRC will have to send out 100,000's of new tax codings, tax tables, CDs etc to every employer in the land. Every employer will have to waste their time in making the changes.

Isn't this just a case where there will be a blanket requirement to add '60' to all 543 Codes? Not done for a while .. but it was fairly common in earlier years - and HMRC will just sweep the others. But it will need new tables / CDs / software.
So fully agree with you that the hidden costs of getting out of this self-inflicted hole is pretty awful. As the original silliness brought in a new 10% Savings band which is also going to add to the HMRC workload. Not least - that most people don't understand it!

gmeikle

Hi everyone.

I'm a MoneySaving Newbie and I'm ashamed to say that I'm still a bit confused about to work out whether I'm going to be better or worse off after the announcement this afternoon!



Could someone please explain to me in simple terms how I could work this out for myself?

Thanks.

Milarky

...now is it 'people' or 'households'? After reading the Badger's speech I'm beginning to wonder....
(Graniad analysis)

Just to be clear, 22 million people on the basic rate of tax – those earning under £35,000 - will receive an extra £120 this year. They will get £60 in September, and £10 a month after that.Of the 5.3 million people who lost out from the abolition of the 10p starting rate, 4.2 million of them will now either have their losses compensated in full or be better off. The other 1.1 million will have their losses at least halved.

But the salient point is that he's had to 'give' money a lot more people - possibly four times as many as affected by the 10p rate abolition - certainly twice as many even if he really did mean 'households' - in order to hit 80 percent of the target. Hence the reference to 'spraying' money.

£2.7 billion = £120 x 22,500,000 (= number of basic rate taxpayers?)

If 5.3 million 'people' affected by loss of upto £223 this year the cost of putting them back in the black is the Badger's average of £120. So it could all be done for about £636 million (plus the cost of finding them) which I think is a figure that mad Frankie Field was touting about before he lost his nerve.

To sum up, therefore. The Badger has just borrowed £2bn (which he didn't have) in order to compensate people who weren't actually any worse off as a result of the abolition of the 10p tax band - in order to give the appearance that he really cares about those other people (or households) that have experienced some loss. And the actual losers are only compensated on a 'average loss' basis not an actual one..

..oh, and it's for one year only, so don't expect the Badger to be spraying around this kind a dough next year after he's devised an even 'fairer' scheme....

barrymung

Ayrshire wrote: »

...So average person on £50,600...

Since whe did the "average" person earn that sort of money??!


Edit: UK average is around £23k PA

Pennywise

You'd think that the Govt would make sure they got their figures right this time wouldn't you?

But no, in the text of the Chancellors speech, he said that the higher rate threshold would be lowered by £600, which as illustrated by other posters above is wrong - it needs to be reduced by £1200.

Funnily enough, the statement on HMRC's website has just been changed to change their figures to a £1200 reduction which is basically an admission that the statement and original figure was wrong.

How can such incompetent people be allowed to run the country?

seven-day-weekend

Will my husband be better off with his £10.5k income, from a Teachers' Pension and Incapacity Benefit?

DebDay

So my OH has a income of £11,000 before tax.

Obviously we have been worse of with the tax rises.

How exactly are we going to benefit from this new change, if at all?

In English if possible as don't have a clue about all this fiscal malarky etc! LOL

postmanpat68

well i'm going to recieve a £60 lump sum i my wage packet in sept!!! what's the betting that it will be taxed income??? btw i'm a loser in the tax change.

sunshinejoclaire

it won't be taxed. It will be in the form of a tax rebate..

teddyco

DebDay,
If you go to this website, you can take your husbands pay slip and figure out what he will be taking home yearly, monthly and weekly.

They obviously haven't updated the figures yet to incorporate the new personal allowance increase, but I'm sure it will be very soon. Keep going back to check.

http://listentotaxman.com/

I just discovered that my wife will be £10 better off per month with the new tax changes by backing into the numbers and doing all the calculations myself on a sheet of paper, but £10 per month is not much when I consider the rapid increases in our electric, gas, and food bills.

Gordon Brown is obviously trying to buy voters for the next by-election that is quickly approaching, but it's not addressing the real problems with the economy at the moment. It's simply a knee-jerk reaction to give everyone that warm fuzzy feeling, and I don't think it will work.

Labour has lost too much confidence and folks are worried that things will change as soon as Gordo has your vote and then quickly raises your taxes again.

British families are being hit on both sides at the moment from high taxes and a higher cost of living and this government is still not listening. £10 per month is simply not good enough!

I'd like to see a tax rebate of £100 per month which would be £1200 annually back for the average family. That would be something for folks to cheer about!

Funny enough, that's about how worse off the average British taxpayer is since Labour came to power.