the tax thing - higher rate payers..

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timskemp

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So 600 on the allowance, that's 120 quid off at 20%

600 off the 40% threshold - that's 240 quid extra tax at 40%?

So am I right in thinking that 40% payers are 120/yr worse off with todays announcement or am I miscalculating it?
 
So 600 on the allowance, that's 120 quid off at 20%

600 off the 40% threshold - that's 240 quid extra tax at 40%?

So am I right in thinking that 40% payers are 120/yr worse off with todays announcement or am I miscalculating it?

I thought that at first read, but when you think about it, you are still getting an extra 600 free of tax, so even though the high rate threshold comes down, the tax free amount goes up by the same amount, so you'll still make 20% on the £600.

e.g. on a £50k income
Currently:
Tax Free 5,000 = £0 tax
20% band is 35,000 = £7,000 tax
40% over 40,000 = £4,000
Total = £11,000

New way:
Tax Free 5,600 = £0 tax
20% band is 34,400 = £6,880 tax
40% over 40,000 = £4,000
Total = £10,880
 
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And of course he will claim that he can only give us this extra tax allowance by adding the 2p a litre tax increase on fuel in october.
 
Actually just read it on BBC again and the reason it is confusing is because they get it wrong and contradict themselves.

They actually say as their headline statement

"Chancellor Alistair Darling has put up the personal tax allowance by £600 - meaning anyone earning up to £40,835 will gain £120 this year."

This would imply that those earning over £40,835 don't benefit.

However when you look in other more detailed articles, you see:

"Mr Darling said he would lower the level at which 40p tax is paid by £600 to £35,400, so the most well-off would not gain more."

The key being that everyone will get the £120, just not any more than that from a shifted 20% tax band! I think the BBC have not fully understood that! :D
 
Ahhh yes - I get it now - and Excel agrees it's neutral.
 
Not really. If you go above a certain rate , you pay 40p in the pound ( thats nearly half your income. )
The level at which this kicks in has been dropped so that many more will go from paying 20p in the pound on all their income , to 20p for X thousands then 40p for the remainder.
 
Although it puts them up a band sooner, it still works out neutral for earnings in between the new and old 40% thresholds.
 
So 600 on the allowance, that's 120 quid off at 20%

600 off the 40% threshold - that's 240 quid extra tax at 40%?

So am I right in thinking that 40% payers are 120/yr worse off with todays announcement or am I miscalculating it?

The £600 is ours not the tax man. They made it looks like it given to us for free.
 
Well my £120 is already spoken for...diesel now at £1.26 lt at a couple of N. West filling stations.
 
Why do they have to borrow £2.7b to give us £120? £120 is ours in the first place not the tax man.
 
You really don't get it. The present holders of office do not consider the money we earn as being ours. They consider it to be theirs and they will decide how much we may have.
 
You really don't get it. The present holders of office do not consider the money we earn as being ours. They consider it to be theirs and they will decide how much we may have.

That how we got brainwashed. We work hard for the money, it ours. If I have any spare I will hand it to the taxman:D
 
Why do they have to borrow £2.7b to give us £120? £120 is ours in the first place not the tax man.

Because they already blew the £2.7B , now they have £2.7B less of our money because the electorate told them where to go at the local elections they have to borrow it. So now we'll be paying the interest as-well

As we probably enter a recession it really seems like a bad time to borrow even more since income [tax receipts] will be lower ...

Richard
 
Because they already blew the £2.7B , now they have £2.7B less of our money because the electorate told them where to go at the local elections they have to borrow it. So now we'll be paying the interest as-well

As we probably enter a recession it really seems like a bad time to borrow even more since income [tax receipts] will be lower ...

Richard

Just for the sake hopefully to continue to be in government.:eek:
 
Anyone know what they blew this £2.7B on ?
 
Won't it be cheaper to bring back the 10p tax?

"To those waiting with bated breath for that favourite media catchphrase, the "U" turn, I have only one thing to say. "You turn if you want to. The lady's not for turning."

Ahh oops. Wrong prime minister.
 
This has to be the biggest fiasco I have seen for many a year....to deliberately take money from the poor to give to the rich....then be forced to give it back...

As it stood he was taking £170 off a person earning £8,000 and giving £170 to a person earning £40,000 ...absolute disgusting..

I await tomorrow FT to read the full details...but my quick reading is that he is giving £120 to the £8k man and taking £120 off the £40k man...so the £40 k man is still getting £50 a year at the detriment of the £8k man..

BUT I DONT WANT TO GET POLITICAL........
 

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