Tax free rent a room
Rent a room relief is only for when you live in the property with the tenant...
And highlighted another
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Rent a room relief is only for when you live in the property with the tenant...
And highlighted another
Did I say they were my parentsRent a room relief is only for when you live in the property with the tenant...
And highlighted another
, btw everything was above board, nothing illegal when it comes to HMRC.I did say there was more to the story.
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Did I say they were my parents
That's the 3rd edit to try and cover your ass
Yes, that you were fraudulently claiming tax relief on ineligible rental receipts
Nope, HMRC you never play about with them to much hassle.That's the 3rd edit to try and cover your ass
Yes, that you were fraudulently claiming tax relief on ineligible rental receipts
I found this answer....
Taxes do not reduce inflation when government spends money they tax. Inflation dynamics can be described using Philip's curve:
πt=π∗t+β(yt−yn)+ϵt
where πt is inflation π∗ inflation expectations, yt real output and yn natural output and ϵt is vector of shocks.
Now increasing taxes and funding infrastructure as you suggest, depending on macroeconomic parameters, could lead to increase in yt or keep it unchanged (since government spending is part of output), and because distortionary taxes such as VAT or income tax create deadweight loss they could actually lower potential output yn (depending on what they are spent on). Massive government spending could also potentially increase inflation expectations, even if it would not change them it would for sure not lower them.
Hence your proposal simply does not lower inflation.
In order to lower inflation through tax hikes, there would have to be only tax hike without government spending that money on public services. This would lower current yt and help reduce inflation. Moreover, it is well known rule in optimal taxation that distortions increase disproportionally with size of tax so this would not be solution if taxes get so high that they cause too large drop of yn. US does not have that high taxes so they could increase them, but this extra tax could not be spent on any public services as you suggest but just locked on account not to be used.
Next, low interest rates both increase π∗ and yt so that would still be part of problem that would either have to be dealt with even higher increase in taxes.
Whether doing this is ‘beneficial’ depends on social welfare function that you use to analyze a problem. Under some arbitrary social welfare function anything you like can be beneficial.
πt=π∗t+β(yt−yn)+ϵt
where πt is inflation π∗ inflation expectations, yt real output and yn natural output and ϵt is vector of shocks.
Now increasing taxes and funding infrastructure as you suggest, depending on macroeconomic parameters, could lead to increase in yt or keep it unchanged (since government spending is part of output), and because distortionary taxes such as VAT or income tax create deadweight loss they could actually lower potential output yn (depending on what they are spent on). Massive government spending could also potentially increase inflation expectations, even if it would not change them it would for sure not lower them.
Hence your proposal simply does not lower inflation.
In order to lower inflation through tax hikes, there would have to be only tax hike without government spending that money on public services. This would lower current yt and help reduce inflation. Moreover, it is well known rule in optimal taxation that distortions increase disproportionally with size of tax so this would not be solution if taxes get so high that they cause too large drop of yn. US does not have that high taxes so they could increase them, but this extra tax could not be spent on any public services as you suggest but just locked on account not to be used.
Next, low interest rates both increase π∗ and yt so that would still be part of problem that would either have to be dealt with even higher increase in taxes.
Whether doing this is ‘beneficial’ depends on social welfare function that you use to analyze a problem. Under some arbitrary social welfare function anything you like can be beneficial.
If you can undertand that then can you explain it to me?
Basically the BoE controls monetary policy (interest rates) and the Govt control fiscal policy (tax rates). It's the BoE's mandate to control inflation, as directed by the Govt, so the main (only) lever they have is interest rates.
The Govt are restricted by what they can do with fiscal policy due to "politics" - eg: they have promised not to raise taxes.
I don't see why not. And it would hurt those at the top too. It could even be adjusted based on essentialness.
But I'm sure some forum smart **** will be along to poke a hole in it
They also Tightening monetary policy using government bonds or raising reserve requirements for banks. Plus they deal with currency appreciation deals with cost-push inflation.I found this answer....
Taxes do not reduce inflation when government spends money they tax. Inflation dynamics can be described using Philip's curve:
πt=π∗t+β(yt−yn)+ϵt
where πt is inflation π∗ inflation expectations, yt real output and yn natural output and ϵt is vector of shocks.
Now increasing taxes and funding infrastructure as you suggest, depending on macroeconomic parameters, could lead to increase in yt or keep it unchanged (since government spending is part of output), and because distortionary taxes such as VAT or income tax create deadweight loss they could actually lower potential output yn (depending on what they are spent on). Massive government spending could also potentially increase inflation expectations, even if it would not change them it would for sure not lower them.
Hence your proposal simply does not lower inflation.
In order to lower inflation through tax hikes, there would have to be only tax hike without government spending that money on public services. This would lower current yt and help reduce inflation. Moreover, it is well known rule in optimal taxation that distortions increase disproportionally with size of tax so this would not be solution if taxes get so high that they cause too large drop of yn. US does not have that high taxes so they could increase them, but this extra tax could not be spent on any public services as you suggest but just locked on account not to be used.
Next, low interest rates both increase π∗ and yt so that would still be part of problem that would either have to be dealt with even higher increase in taxes.
Whether doing this is ‘beneficial’ depends on social welfare function that you use to analyze a problem. Under some arbitrary social welfare function anything you like can be beneficial.
If you can undertand that then can you explain it to me?
Basically the BoE controls monetary policy (interest rates) and the Govt control fiscal policy (tax rates). It's the BoE's mandate to control inflation, as directed by the Govt, so the main (only) lever they have is interest rates.
The Govt are restricted by what they can do with fiscal policy due to "politics" - eg: they have promised not to raise taxes.
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Would that not make inflation go even higher? Everything would cost even more - food, fuel etc. When people stop spending shops start closing. Then you would have even more people on the breadline.
The government has to WTFU and do something but they really don't care because they know they are toast. They are like someone with cancer who refuses treatment.
In this instance, raising VAT would be inflationary; prices would only increase further.
Given that demand is inelastic for things like food etc. suppliers could raise prices without losing sales.
It's not what we want to be doing, it would only hurt lower income families more.
Given that demand is inelastic for things like food etc. suppliers could raise prices without losing sales.
It's not what we want to be doing, it would only hurt lower income families more.
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But isn't that like a technicality?
To drive inflation down you take money away from people. Does it matter if its at point of sale vs mortgage?
You're not making the goods more expensive at the core. You're simply extracting reducing people's spending power at a different point. A point that is less crippling.
They could remove VAT on energy, but increase vat of luxury goods.
technically it's to reduce demand for the goods. So yes, taking money away from people does that but so does also encouraging people to save, which higher interest rates does more so than higher VAT rates.
Soldato
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Forcing prices to rise is not inflation, increasing VAT would tip companies who are on the edge of bankruptcy as people stop spending to focus on essentials.
That company owes 1million lets say, once they go bankrupt, that million is gone, this is deflation.
The reason this is a horrible idea is because it targets the lower end of income unfairly. A rich person doesn't care if something costs £200k, or £210k
If you can undertand that then can you explain it to me?
Basically the BoE controls monetary policy (interest rates) and the Govt control fiscal policy (tax rates). It's the BoE's mandate to control inflation, as directed by the Govt, so the main (only) lever they have is interest rates.
The Govt are restricted by what they can do with fiscal policy due to "politics" - eg: they have promised not to raise taxes.
Fiscal means anything related to the government, so taxes, and spending, if the government lowers spending, there is a surplus, that surplus is then used to pay debt (government bonds), while the BOE sells government bonds into the market.
This then removes money from the economy, it is deflation, (government buying back bonds from the BOE balance sheet essentially is deleting money from existence) and will then impact firstly to stop prices rising, and if you keep at it, you will decrease prices.
As we are in a global world, the strength of the £ would rise in this example to compensate
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Man of Honour
- Joined
- 21 Nov 2004
- Posts
- 46,295
Think I’ll just go max term next time to leave more money left monthly. It’ll mean only a tiny increase to our current payment. I’m in a fortunate position where we’ve got a lot of equity in the house, only need our commuting house while we work and eventual inheritance that would cover it many many times over.
I feel for anyone else though. Recession seems inevitable that will hit us even harder than this.
I feel for anyone else though. Recession seems inevitable that will hit us even harder than this.
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This has crossed my mind too. Is it worth paying a lot now when I will inherit at some point and then be mortgage free?
Not talking a life of luxury but would certainly clear the mortgage if that was the sensible play. Why not just extend the term and live a bit more now
how about you don't?
Inflation by definition is growing prices for everything except labour. People already lost money
All these brexit/covid/energy/ukraine/inflation/mortgage/younameit crises are paid for by people. And it is not getting better, stupid political decisions are not stopping in near future.
Increasing taxes would in this instance cause a temporary rise in CPI .