Chancellor raises personal allowances in 2008/09

Ayrshire_2

mitchaa wrote: »

Average person on £50,600 :rotfl:

Current threshold is set at £36000+£5435 giving a £41435 20% limit where 40% then kicks in.
The new allowance of 6035 will put the £36000 down to £35400 surely??

£35400+6035 = £41435 so a higher rate tax payer will be no better or worse off.

I think anyway.

Ok maybe not average across the range .... what i was trying to show was an average higher tax payer ..... i'll try to clarify better next time.

Maybe my maths is out as well but 35400 doesn't work for me.

Ayrshire_2

sunshinejoclaire wrote: »

I agree Mitchaa!! :rotfl: AVERAGE wage £50.6K???? I think someone has thier facts a little out..

did i say average wage?

as i've said i was trying to shed a bit more light on the numbers.

Ayrshire_2

Nomad25 wrote: »

What planet are they on?

God knows.... must have just landed from outer space.

Nice to see people pick up on bits of the post that are not in the least bit important.......rather than comment on the calculations etc.

Next time i'll not bother

Ayrshire_2

jamesd wrote: »

Ayrshire, the announcement is that "as the £600 increased personal allowance applies not just to basic rate taxpayers but also to those paying tax at a higher rate, I am therefore reducing the threshold at which an individual starts to pay tax at the higher rate by £600".

After increasing the personal allowance the basic rate 36000 has to be reduced by 600 to keep the higher rate threshold the same. Then the announcement says that the threshold will be reduced by 600, so the total change to the 36000 is the 1200 that you calculate.

I think i'm getting what you say.... just my take is that personal allowances and thresholds are two different things. I haven't seen the official wording but it doesn't sound very clear for the average punter on my planet

Ayrshire_2

barrymung wrote: »

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


Edit: UK average is around £23k PA

Cheers thanks for the info.... what's the average higher tax payer on ? Just so i use the proper figures next time.

Jings it's hard work around here :rolleyes:

Ayrshire_2

seven-day-weekend wrote: »

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

In a word ... yes .... well better than he was yesterday!! But he won't be until September.. basically the taxman will allow him another £600 before he pays tax .... or £120 in the fiscal year as it turns out.

So in Sept when the personal allowances go up by £600 he'll get £60 more than he got in August (probably in his pension payment if that's what his allowances are goin against). Each month after that it'll be £10 more than he got in August.

Does that help?

Ayrshire_2

Pennywise wrote: »

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?

:T glad uncle Alistair read my post.....he could learn a thing or two on my planet.

jamesd

Pennywise, the announcement that the higher rate threshold is being lowered by 600 is completely correct. No error in the figures or incompetance at all.

The threshold is not the 36000, that's the basic rate limit. The threshold is the salary at which you start to pay higher rate tax. So the basic rate limit of 36000 is reduced by 1200 to lower the threshold by 600 once the personal allowance is increased by 600.

Mikeyorks pointed to the HMRC site explaining "The point at which customers start to pay higher rate income tax is sometimes called the 'higher rate threshold'. It is the total of the personal allowance and the basic rate limit. To reduce the higher rate threshold as announced by the Chancellor, the basic rate limit will be reduced by £1,200 from £36,000 to £34,800. Higher rate taxpayers will see no difference in the amount of tax they pay."

seven-day-weekend

Thankyou Ayrshire - words of one syllable - thanks!

Milarky

http://www.guardian.co.uk/society/2008/may/14/socialexclusion.incometax

· 80% of the 5.3 million households that had lost from the 10p band's abolition would be fully compensated and the remaining 20% compensated by at least half. The average loss has been £120 per household*. £700m of the £2.7bn will go directly to the 5 million [people?] who lost out by the abolition of the 10p tax band.

A direct tax rebate for the losers would have taken at least two years to prepare.

It still looks like 'households' is being used as a synonym for 'people' (or 'individual') - unclear and most unsatisfactory

*Doesn't make sense - the average loss (in the range £0 to £223) is always going to be 'per person' - £120 - which is exactly what is being paid out now. If you were talking about 'households' - with 1 and a bit adults on average - the range of loss would then be (£0 to £400ish) and the average [we actually mean 'median' of course] then about £200.

'Two years' to just find a bunch of people and send them an individual cheque - that's etiher just Treasury spin to cover government incompetence - or things really are dire!!