A Flat Rate of Tax Relief?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
120 replies 15K views
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  • ColdIronColdIron Forumite
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    cobson wrote: »
    29th October
    Correct. Philip Hammond confirmed that UK is to have its first-ever Monday budget. 29 Oct. Why a Monday? Hammond wanted Wed 31st until civil servants pointed out it was Halloween, inviting headlines like “Hammond’s house of horror”. So Monday it is.
  • SnakeySnakey Forumite
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    ColdIron wrote: »
    Correct.
    Dude, it was a mistake, not an argument - I meant 29th but typed 26th. I already said! You don't need to pick a side! :)

    I had been thinking that if anything the Budget would be later this year, to keep it from informing the EU negotiations (not that any other element appears to be successfully being kept secret), so it's interesting that it's quite early.

    To briefly pretend to be on topic, given the wider political background right now I can't imagine an overhaul of the pension system. They might not still be around to implement it, much less reap the benefits of an increased tax take in 2-3 years' time and translate it in to spending that the voter can appreciate. If there's anything, it'll be tinkering with the £40k AA, the £150k clawback point, that sort of thing. Would personally love them to abolish the LTA obviously.
  • ColdIronColdIron Forumite
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    Snakey wrote: »
    You don't need to pick a side! :)
    Not picking sides, just tacking on a mildly humorous anecdote to explain the 29th. Perhaps it wasn't the rib tickler I thought it was ;)
  • zagfleszagfles Forumite
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    Can't see how this will work regarding employer contributions to defined benefit schemes as they should be allowed for in the same way as salary sacrifice because both would get around this change if they werent changed in some way.
    Employer conts, whether sal sac or not, would have to become a taxable benefit, offset by the flat rate. This would mean the lower paid would get a tax rebate on employer conts and higher rate taxpayers (inc those pushed into higher rate by this) would pay extra tax.

    They'd have to find a way to value employer conts to DB schemes that would make them predictable and not create massive spikes, CARE schemes could use the same rules as the annual allowance but FS schemes couldn't really, otherwise some people getting a pay rise could see a temporary massive increase in tax.

    But it's do-able. And would be "progressive".
  • michaelsmichaels Forumite
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    In a way the govt of the day with a max 5 year time horizon is always likely to be in favour of discouraging contributions now to maximise short term tax take even if it means forgoing tax years later when pensions are in drawdown. I am sure most voters care more about how much tax they pay on this months pay packet than tanyhe size of their future pension so it seems the obvious thing to hit.
    I think....
  • SnakeySnakey Forumite
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    zagfles wrote: »
    (inc those pushed into higher rate by this)
    Had not thought of that. And nor, I suspect, have a lot of people who currently assume that because they're basic rate payers 30% would be great news. It would be fun, for those of us who get our kicks in that sort of manner, to watch the screeching u-turns below-the-line across the various news websites when people discover that when it comes to how "the higher-earners should pay more to help the poor" they don't fall in to the category they thought they would.
    michaels wrote: »
    In a way the govt of the day with a max 5 year time horizon is always likely to be in favour of discouraging contributions now to maximise short term tax take even if it means forgoing tax years later when pensions are in drawdown.
    Reminds me of a Terry Pratchett snippet along the lines of "we may try to push one another over the side, but only a fool would make a hole in the boat". I suppose it's a game of chicken when it comes to it - both sides know certain unpopular things have to be done, but are putting them off hoping the other lot will be in power when the last possible moment arrives.
  • londoninvestorlondoninvestor Forumite
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    ColdIron wrote: »
    Correct. Philip Hammond confirmed that UK is to have its first-ever Monday budget. 29 Oct. Why a Monday? Hammond wanted Wed 31st until civil servants pointed out it was Halloween, inviting headlines like “Hammond’s house of horror”. So Monday it is.

    His advisers told him it would spook the market...
  • ColdIronColdIron Forumite
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    Very good :)
  • Kit_KattKit_Katt Forumite
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    I think if Mr Hammond tinkers with the current tax relief regulations. He will be signing on at the job centre not long afterwards!
  • zagfleszagfles Forumite
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    Kit_Katt wrote: »
    I think if Mr Hammond tinkers with the current tax relief regulations. He will be signing on at the job centre not long afterwards!
    And who do you think will take his place?
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