MSE News: Summer Budget 2015: Income taxes to be cut

Former_MSE_Helen
Former_MSE_Helen Posts: 2,382 Forumite
in Cutting tax
The Chancellor is to bring forward planned increases to both the personal allowance and the higher rate tax thresholds...
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Summer Budget 2015: Income taxes to be cut

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Comments

  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    First Anniversary Combo Breaker
    Helen, may I just ask why does a person's personal allowance depend upon their salary?
    I think it is only fair to Georgie boy, to point out that he is going to pass a law saying that he can't increase rates of National insurance next year, but then why would he want to because if he increases the higher rate tax threshold he gets 12% NICs on income below the threshold but only 2% on income above it.
    The only thing that is constant is change.
  • TomJ
    TomJ Posts: 224 Forumite
    First Post First Anniversary Combo Breaker
    zygurat789 wrote: »
    Helen, may I just ask why does a person's personal allowance depend upon their salary?

    It doesn't. You have a personal allowance which isn't taxed, and everything above is.
    I think it is only fair to Georgie boy, to point out that he is going to pass a law saying that he can't increase rates of National insurance next year, but then why would he want to because if he increases the higher rate tax threshold he gets 12% NICs on income below the threshold but only 2% on income above it.

    But as the NI Upper Earnings Limit is moving in line with the higher rate of income tax threshold while there's 10% more in NICs, there's 20% less income tax.
    I am not a financial advisor or other expert. All posts are purely my thoughts at the time for discussion, not advice. Bear in mind, even most of this disclaimer is ripped off another forum user. Please check out the facts first before doing anything.
  • Purplesky_2
    Purplesky_2 Posts: 152 Forumite
    Mortgage-free Glee!
    Actually Tom J, I think the personal allowance might be tweaked or eliminated somewhere around the £150k-£200k mark.
  • TomJ
    TomJ Posts: 224 Forumite
    First Post First Anniversary Combo Breaker
    Good point, well presented. The personal allowance withdrawal is such a daft distortion of the already overly complicated tax system (plus not something likely to affect me in the immediate future) I edited it out of my head. mea maxima culpa.
    I am not a financial advisor or other expert. All posts are purely my thoughts at the time for discussion, not advice. Bear in mind, even most of this disclaimer is ripped off another forum user. Please check out the facts first before doing anything.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    First Anniversary Combo Breaker
    TomJ wrote: »
    It doesn't. You have a personal allowance which isn't taxed, and everything above is.



    But as the NI Upper Earnings Limit is moving in line with the higher rate of income tax threshold while there's 10% more in NICs, there's 20% less income tax.

    The very points I was making. Have you read the article?
    The only thing that is constant is change.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    First Anniversary Combo Breaker
    Purplesky wrote: »
    Actually Tom J, I think the personal allowance might be tweaked or eliminated somewhere around the £150k-£200k mark.

    Exactly, tthe PA does not depend on salary
    The only thing that is constant is change.
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