PS Not to mention the increase in employee contributions for nine million people in auto enrolment pension schemes from 3% to 5%. For someone on average earnings of 26k , the tax benefit of £130pa will be reversed by £318pa extra pension contributions.Just a reminder that the tax cuts for higher earners are reduced by about 50% through increases in National insurance contributions.
#Tories increasing borrowing to reduce taxes.
When personal allowances go up tax rates should be adjusted further up the scale so the wealthy are not receiving extra. It seems strange to me we have only 2 basic rates of income tax. It should be staggered. The govt should be doing everything it can to raise the take home pay for the low paid. Keep increasing minimum wage and personal allowance, stagger tax bands, create an employee fund based on vat that goes to workers of the company.
Some countries have gone for a completely flat single rate.
When the personal allowance increases, it benefits higher rate tax payers more. This is simple logic, because it is them that pay more in the first place; 40% not 20%.
5 friends go to the pub once a week. The bill always comes to £100 and they share it according to their income. The highest earner pays £40, the others pay £30, £20 and £10, and the lowest earner pays nothing.
After 4 weeks the friends are surprised and delighted when the landlord gives them £20 back for being such loyal customers. They split the £20 in the same proportion, with the lowest earner receiving nothing.
The lowest earner kicks up a fuss. "That's not fair - I'm getting nothing!" he says, and carries on "As usual its the rich exploiting the poor"
I assure you someone earning say 100k doesn’t benefit more from the allowance going up to 12500
I assure you someone earning say 100k doesn’t benefit more from the allowance going up to 12500
no .... they benefit twice.... by not paying tax on the increase in personal allowance..... and by paying less tax because of the move to £50,000 before the higher rate kicks in
Recommended reading : The Ragged Trousered Philanthropists - Robert Tressell
Some people seem to want a Cuba style pay system, for some reason. They can't understand the appeal of offering workers the chance of earning more money, which results in more tax. Instead they want to 'incentivise' people by asking them to train up into better paid jobs or start up new businesses, but be no better off than where they originally were.They also pay far more tax, so the word "benefit" is a strange one. In this example the person earning £10k pays zero tax, the person earning £100k pays £36k tax.
Some of you appear to want to whip the one who pays all the tax through the streets.
no .... they benefit twice.... by not paying tax on the increase in personal allowance..... and by paying less tax because of the move to £50,000 before the higher rate kicks in
Recommended reading : The Ragged Trousered Philanthropists - Robert Tressell