The spring Budget

[tmcd35]

Erm - the original housing benefit?

That is still not a tax - its a reduction in your benefit - same way as you get reduction in other benefits depending on your circumstances..

 

It's also technically not a subsidy - Its legal name under the legislation is "Under-occupancy penalty". If you live in a house taht has more bedrooms than you need then this penalty is deducted from your benefit.

 

Penalties != Tax (It may feel like it is - but its not)

 

So where does the money come from to pay for this reduction in benefit this penalty? And worse still, who does it effect? It's a hidden tax on the poorest and most needy in our society - which is just plan wrong!

 

The effect of the penalty is to unjustly tax those that really cannot afford it - to claim anything else (like calling it a "spare room subsidy") is being disingenuous.

[ButterflyMoon]

The sad thing about the whole bedroom subsidy is it is hitting the most frail and infirm in our society. The fact is there are very few one bedroom homes in which to move these people. What do they expect folk to do? Wave a magic wand and invent a one bedroom home??

[mole]

Tax dog owners so there's money clean up Dog Poo!

[SpuffMonkey]

I'd like to see the return of a properly progressive tax system, where the rate rises (say 5% at each £100k pa) to a max of (say) 95% - all the bankers and overpaid CEOs can keep giving each other bonuses and multi zillion pay awards, but we all get the benefits in more money for the NHS, social care - who knows even a decent pay rise for IT staff!

[tmcd35]

I'd like to see the return of a properly progressive tax system, where the rate rises (say 5% at each £100k pa) to a max of (say) 95% - all the bankers and overpaid CEOs can keep giving each other bonuses and multi zillion pay awards, but we all get the benefits in more money for the NHS, social care - who knows even a decent pay rise for IT staff!

 

That's an interesting one. For all my socialist and liberal views, it's actually something I firmly disagree with because I see it as punshing someone for being successful and is really a means of covering up holes and inequalities elsewhere.

 

I'd like to see a single tax rate paid by all with no personal allowance. Get rid of VAT and other duties as much as is allowable under EU law. And set the net National Minimum Wage at 10% above the Living Wage - then peg it to inflation/deflation.

 

 

As for this year, I think the budget was a little lack luster for me, nothing to write home about. Work as bumbped me up 1 spinal point, we have a 1% pay increase on top of that, and the personal allowance is upto £10,000 from the next pay packet. All in all, I'm better off. So nothing to complain about either.

[zag]

I'd like to see the return of a properly progressive tax system, where the rate rises (say 5% at each £100k pa) to a max of (say) 95% - all the bankers and overpaid CEOs can keep giving each other bonuses and multi zillion pay awards, but we all get the benefits in more money for the NHS, social care - who knows even a decent pay rise for IT staff!

 

So back to how labour used to do it in the 70's? I believe the top rate was 83% back in those days. A socialists dream indeed!

 

Unfortunately the problem was the higher you make taxes the more people avoid them, there comes a point where you get more total revenue by actually lowering those taxes. I believe that point is around 40-50%

[SpuffMonkey]

So back to how labour used to do it in the 70's? I believe the top rate was 83% back in those days. A socialists dream indeed!

 

Unfortunately the problem was the higher you make taxes the more people avoid them, there comes a point where you get more total revenue by actually lowering those taxes. I believe that point is around 40-50%

 

So the right wingers would have us believe! If you think high earners don't try to avoid tax at any point, you're living in a dreamworld.

[Andrew_C]

I gave the BBC calculator a quick run this morning. I am £0.00 better off.

 

Could have been worse, I'll only have to sell one child into white slavery this year.

[JJonas]

Work as bumbped me up 1 spinal point, we have a 1% pay increase on top of that,

 

er I dont think you do have that 1%, isn't this what the nurses were shouting about? because so many are on a progression pay increase they are being denied the additional 1%

 

see Anger As Thousands Of Nurses Denied 1% Rise

Edited March 20, 2014 by JJonas

[zag]

So the right wingers would have us believe! If you think high earners don't try to avoid tax at any point, you're living in a dreamworld.

 

I didn't say high earners don't try to avoid tax I said you get the the best total revenue when the rate is at 40-50%.

 

Governments know this hence why even labour don't dare go higher.

 

France actually now has one of the higherest tax rates in the world of 75%, take a look at how their economy is doing....

[featured_spectre]

BBC News - Budget calculator: How will Budget 2014 affect you? < according to this, my household will be £269 better off a year...or £22.42 a month (rounding to nearest penny).

[zag]

Looks like I'm 140 better off.

 

I pay less Income tax and less National Insurance next year. Happy days.

[JJonas]

Looks like I'm 140 better off.

 

I pay less Income tax and less National Insurance next year. Happy days.

 

ah but are you better off in real terms than you were in 2010?

[featured_spectre]

in real terms compared to 2010, I am better off by £50 a year...so thats not bad. This is not counting that I am in a higher paying job than then though, if you factor that in, you are looking at a real term improvement of £2000ish a year better off.

[zag]

ah but are you better off in real terms than you were in 2010?

 

I would hope so yes, I'm paying less tax and have more money deposited into my account each month.

 

You cant fight inflation though, not sure why anyone thinks you can.

[hardtailstar]

im £167 better off roughly....

 

i'd like to see that as i dont have money!

[flyinghaggis]

I think the Tory's are trying to go for the OAP vote! The removal of the requirement to buy an annuity seems like a massive change especially coupled with the increased ISA limit and 'pensioner bonds'!

[zag]

I think the Tory's are trying to go for the OAP vote! The removal of the requirement to buy an annuity seems like a massive change especially coupled with the increased ISA limit and 'pensioner bonds'!

 

Yep, hopefully it will get Britain saving.

 

I couldn't be happier that the ISA limit has gone up, you could potentially save 1.2 million quid tax free in a lifetime now.

[featured_spectre]

@zag how is that possible? Please explain.

[sparkeh]

The pensions change is a double edged sword. Whilst the annuity market is terrible and making a lot of money out of pensioners (see how much the pensions companies shares fell when this measure was announced!) just handing over people's pension pot might not be good in the long term.

 

Whilst responsible people will plan and use their money wisely, there is, rightly, concern that people could just blow all their money and fall back on the state. However:

Quoth Pensions minister Steve Webb (BBC News - Minister fuels pension debate with Lamborghini comment) when talking about pensioners using their pot to buy a Lamborghini

"If people do get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice."

Would it have made sense to reform the annuity market to stop ripping off pensioners?

[localzuk]

People have the right to spend their money how they see fit. So, if they want to spend it all on 100,000 ice cream cones, that's up to them. There's no further assistance after that point, other than the normal state pension.

 

Why should there be different rules regarding money for OAPs compared to younger people? Someone can't stop you spending your £200k savings on a giant model of a platypus right now, why should they when you're an OAP?

[zag]

@zag how is that possible? Please explain.

 

You can save 15,000 a year into an ISA which is tax free forever.

 

If you save the full amount in for 40 years that's over a million pounds when you take into account the compound interest you get.

 

By the time you retire you would be getting around £2,500 interest a month.

 

EDIT: try this

 

https://www.moneyadviceservice.org.uk/en/tools/savings-calculator

 

By just saving £500 a month assuming 4% average interest over your lifetime you could have half a million by retirement.

Edited March 21, 2014 by zag

[E_G_R2]

I'm £127 a year better off but if I spend the £12 per month on wine i'm worse off

 

Re pensions like many i've got a number of small pensions doing 4**k all and have been advised to cash them in when allowed rather than scrape £7 to £20 a month from them. The pension advisor said live a little because though you may live longer your quality of live may not be all its cracked upto be

[Seb1780]

You can save 15,000 a year into an ISA which is tax free forever.

 

If you save the full amount in for 40 years that's over a million pounds when you take into account the compound interest you get.

 

By the time you retire you would be getting around £2,500 interest a month.

 

By just saving £500 a month assuming 4% average interest over your lifetime you could have half a million by retirement.

 

Which is exactly how pensions work; save a modest amount for a long time and get a big pot at the end. Up until 1998 pension investment was predominantly tax free too, until Gordon Brown decided to tax all share dividends which saw a 10% drop in income to those funds.

 

Compound interest is also useful for paying the bill at the Restaurant At The End of The Universe.

[sparkeh]

People have the right to spend their money how they see fit. So, if they want to spend it all on 100,000 ice cream cones, that's up to them. There's no further assistance after that point, other than the normal state pension.

 

Why should there be different rules regarding money for OAPs compared to younger people? Someone can't stop you spending your £200k savings on a giant model of a platypus right now, why should they when you're an OAP?

Ok, Devil's Advocate.

 

Pensions are different to normal investments. Unless you have built your pot up solely on your own, the Government and your employer have also contributed to a fund that is designed to give you money throughout your retirement. Buying an annuity guarantees a level of income for the rest of your life. Handing over a large sum of money does not.

 

Why? Because evidence from other countries indicates that quite a percentage of pensioners blow their pots on holidays, cars and real estate. Some of these will end up in a retirement home with no cash, regretting their decisions. Some are too scared to spend and leave a large amount of money in a low interest account that has a worse return than an annuity.

 

Another side effect of this (again evidenced in other countries) that retirees plough their cash in to the buy to let market and further inflate the housing market making it harder for first time buyers which is the last thing we need at the moment.

 

Some sources:

Pension shakeup in budget leaves £14bn annuities industry reeling | Money | The Guardian

http://www.challenger.com.au/funds/TechnicalUpdates/CRIR_How_much_super_do_Aussies_have_Apr12.pdf

Osborne