BUDGET 2012: Earn £9,200 before you start paying income tax... not bad :)

Scroll to see replies

The TSR socialists will make it clear that nobody should aspire to earn £40,000; ergo it's irrelevant except to fat cats.

Don't get me wrong, I'm in favour of the drop in threshold in favour of taking lower earners out of the 20p threshold and I say that as someone who is very likely to enter the 40p tax rate in the next 2-3 years.

But it's funny how the budget speech was all the good news like tax cuts and freezes, whilst leaving out the unsavoury details that will hit those who are the Conservatives core consitituents...

Reply 21

Clip

Original post by Captain Crash

Let's not forget that this is a coalition budget. Were this a pure Tory budget, I couldn't see that drop in the 40% threshold happening.

The core Tory vote would be happy with an effective 2% fall in Corporation Tax. That's a big kahuna for small business.

Reply 22

Captain Crash

Original post by Clip

Let's not forget that this is a coalition budget. Were this a pure Tory budget, I couldn't see that drop in the 40% threshold happening.

Sure, but equally, the raising of the 20p rate wouldn't have happened if this was a Tory budget. It didn't stop Osborne boasting about it for 5 min of the budget.

Reply 23

Darkphilosopher

Original post by Maker

Don't you know already, where have you been for the last 4 years, Basingstoke?

And by this do you mean, "I know **** all about the situation however I assume it's the rich people's fault"?

Reply 24

Cheese_Monster

I feel like a mug, I love politics, but I haven't the faintest idea what Osbourne's budget means for the economy... Damn :frown:

Reply 25

AlexInWonderland

Original post by Captain Crash

Meanwhile, the 40p tax threshold is reduced from £42,475 to £41,450.

Funny how Osborne left that to the fine print....

All this does is counteract the increasing of the basic rate threshold, thus there is no change? I believe this threshold is too low as it stands, but the priority has to be taking the lower paid out of tax. Ideally this would be done to the extent that in-work benefits can be significantly reduced.

Reply 26

Captain Crash

Original post by AlexInWonderland

It does, but George was telling the house how even those earning over £100,000 will benefit from the 20p tax rate, which is a load of tosh.

Reply 27

DJKL

Original post by Captain Crash

Meanwhile, the 40p tax threshold is reduced from £42,475 to £41,450.

Funny how Osborne left that to the fine print....

He didn't, it was in the main speech.

Reply 28

ish90an

Original post by Captain Crash

Meanwhile, the 40p tax threshold is reduced from £42,475 to £41,450.

Funny how Osborne left that to the fine print....

41k isn't even much in many parts of the South East and London. If the Tories really wanted votes they could've increased the 40p threshold to ~60k and let house prices fall through a bigger LVT on houses worth over 2m.

Reply 29

Captain Crash

Original post by DJKL

He didn't, it was in the main speech.

Care to point where? I was watching the speech pretty closely and George mentioned the 50p tax rate, the personal tax allowance and then summarised the whole budget. He didn't mention the 40p tax rate to my initial embarrassment, having told those watching that the 40p tax threshold was going to be decreased.

Reply 30

Herr

Nothing worth a cigar or champagne in this budget. Waste of time really.

Reply 31

DJKL

Original post by Captain Crash

Apologies, I think I must have read it afterwards on HMRC's website when they eventually got around to posting up the detail (they were very slow this year and the link from the Treasury to HMRC kept taking me around in a perpetual loop until they added the pdf files) You are correct, it is not in the main speech.

Reply 32

Maker

Original post by Darkphilosopher

And by this do you mean, "I know **** all about the situation however I assume it's the rich people's fault"?

Been looking in the mirror?

Reply 33

DJKL

Original post by Florence321

I didn't realise there were only really two tax bands, that's a big jump once you start earning over £40 000 (roughly) - without wishing to suggest a ridiculously complex system (and I do know next to nothing about economics) wouldn't it make sense to put in a middle tier rather than just lower the threshold (in terms of helping the people rather than raising money anyway, which I know is not always the aim). £40 000 doesn't seem that high to start having to give so much of your income away.

Apart from that, what I really hate is how your money is taxed numerous times - on your income, your savings, your pension, buying a house, and probably more. I don't see how that is in any way fair.

The jump is not that dramatic as employee NI rates drop at pretty much the point where tax rate rises. For 2012/2013 employee NI drops from 12% to 2% at circa £42,484. Tax rate rises at £42,475 (8,105+34370) to 40% from 20%. So for an employed individual the transition is more 32% (20+12) to 42% (40+2) re their marginal rate.

Reply 34

DJKL

Original post by Florence321

Savings themselves are not really double taxed (except maybe on death via inheritance tax, if applicable) It is really only the income the savings make, the new increase in wealth that gets charged to income tax. Pensions being taxed (except for the state pension) is really the quid pro quo for the tax relief received on the original contributions. House purchase cannot be complained about that much as in the case of your principal private residence you are not taxed on any capital gain you may get if its value increases.

The taxes I dislike most are the true tax on tax items, petrol, alcohol and tobacco which have a duty inherent within the price then in effect vat on the duty.

There are also the odd taxes like stamp duty on commercial property. If a commercial property has vat on its price (opted to tax) then stamp duty is calculated not on the net price but the gross.

E.g property sold for £200,000, stamp duty £2,000, same property sold with vat (which may well be recoverable by purchaser) stamp duty on £240,000 namely £2,400. In most cases the economic cost once vat reclaimed is £200,00 for the property yet one transaction has £400 more irrecoverable stamp duty. With higher value properties, where the stamp duty rates are higher, the extra 20% stamp duty can be a considerable sum.

(edited 12 years ago)

Reply 35

noisy06

Original post by Darkphilosopher

Despite the fact that the rich pay a far greater amount of tax than the poor?

What is the proportion of wealth held by the rich smart alec?

Reply 36

Fynch101

Original post by Captain Crash

Meanwhile, the 40p tax threshold is reduced from £42,475 to £41,450.

Funny how Osborne left that to the fine print....

Oh holy crap no! not an extra 20% of tax on £1025! Please! Anything but that!

Do you know how to add up buddy?

Reply 37

Darkphilosopher

Original post by noisy06

What is the proportion of wealth held by the rich smart alec?

And that automatically means that they have to share it amongst everybody else...?

Reply 38

noisy06

Original post by Darkphilosopher

And that automatically means that they have to share it amongst everybody else...?

It automatically means that they will have to be paying more tax, no matter what. Even we had a flat tax system, they would still technically be paying more, and we have a progressive taxation system. And yes, it means they MUST pay more. when the top 1% controls a vast amount of wealth, it means the economic system has a flaw somewhere which needs to be fixed.