Tax drop

[Stan_Lite]

I haven't really looked into this but from what I've read in this thread, I'll be better off. I work abroad so I don't pay NI (well, I pay the minimum to keep me right for pension etc. - about £2 a week). I should be pleased but as a lifelong socialist, I'm horrified to think that I'll be hundreds of pounds a year better off when someone earning less than half as much will be hundreds of pounds worse off.

Until you factor in all the indirect taxes that our Gordon has increased over the years, then we`re all worse off in tax terms.

That practice has been going on for decades, it's hardly fair to single out Brown. IIRC the Tories were the worst of the lot, they did away with the stupid high tax brackets, which was a good thing - the only trouble was that they shared it out amongst the lower earners through stealth taxes, which was not a good thing.

Nice of a labour government to hit the worst off like that

Headline grabbing of the worst kind frankly.

I know. I personally never thought I'd see the day when Labour back-benchers were cheering making low paid workers poorer.

It makes me sick to my stomach to think the party I grew up supporting have sold out to the extent they are literally taking the bread out of the mouths of the people they were formed to protect. The Tolpuddle martyrs must be turning in their graves.

Shame on you "New Labour"

 

[drunkenmaster]

lol, we're fighting unemployment from our failing economy by making more and more public sector jobs, most of these are fairly low paid and lots of temp and not long term staff as they tend to move on to "better" jobs frequently. either way all of the essentially not needed jobs they are creating they want to get 20% tax back instead of 10% tax, that way to further combat unemployment and pretend nothings wrong so they can win another election they can afford to increase the number of public sector jobs, again, and again and again.

Thats almost certainly the biggest reason behind this as the sheer amount of tax going to these useless paper pushing jobs is insane and growing every year, this is just a 10% cut on all of their pay. theres basically no cut in tax for anyone as all the higher earners are paying it elsewhere, this is just a way to get more cash out of the growing number of low earners.

You think any government will actually try to combat our lack of industry in this country? or just keep going and going till we literally run out of money.

 

[MajorMaccas]

failing economy? we have one of the strongest economies in the world today

 

[drunkenmaster]

failing economy? we have one of the strongest economies in the world today

well done for knowing nothing whatsoever about the economy.

Countries slipping into debt, we have increasing tax's, quite significantly year to year mostly through secondary hidden tax's, and we are fighting unemployment by adding public sector jobs every year which are paid out of tax. those jobs generate no money. a strong economy has industry which brings raw materials in, turns that into something and exports that to generate money. WE are doing this less and less every single year with basicaly zero new industry coming here. every new factory for car's, computer parts, electronics, furniture, clothing is being made elsewhere in the world as theres zero incentive to bring business here. Our education system is getting worse and attracting less people to come here, massive amounts of skilled work is being outsourced as you have cheap crap labour here now. people will pay higher wages for highly skilled workers, but from a point of having highly skill highly educated people here even 10 years ago its changing massively. UK people seem to ignore it but the rest of the world is changing. We are riding a strong economy that is failing, if we don't fix it soon it will become incredibly weak incredibly quickly.

how do you think we will stay in a decent position when basically everything we buy and use in life is produced in asia. you can not have a strong economy if you're entire economy is based on selling items imported from other countries. WE have a very small country with limited natural resources to make money from, theres little reason to buy smallish quantities of metals/rocks or whatever from the uk when russia or anywhere else in the world can sell you the same stuff cheaper. we have limited oil supplies. What does the uk produce that other people in the world require massively? We have to encourage industry to come back to the uk, but for 20 years we've ignored the fact that we don't produce anything anymore.

 

[scorza]

Because I'm not slaving away doing overtime when I'm going to be losing 40% of it after the first month or 2

Talk about biting your nose off to spite your face. I get paid £30ph OT, which means £21ph after tax when I breach the 40% tax limit. I can't afford to sniff at £21 per hour.

 

[Rotty]

I might be missing something here but I thought they would be better off, the increase in NI is less than the reduction in tax due to the higher tax threshold.

Ie. for every £1 that your now giving 11p instead of 1p for NI the tax is 20p rather than 40p

31p rather deduction rather than 41, and now that its later in the earning scale that you jump up to 41% why would you be worse off?

I think it is due to the area where at present you pay only 1% NI and 22% tax ( Above the NI upper threashold and below the 40% tax band )

instead of paying 22+1 % here you will pay 20+11% , this is quite a wide area of earnings too

 

[Mad old tory]

snip

For a start, we've become a service economy and so sell our expertise rather than products per se. Take a look at finance, London is a massive financial hub nowadays and the financial services earn this country billions. Actually though, the growing acceptance of global warming combined with a wish for higher quality goods could see an emergence of a bespoke British manufacturing sector for luxury goods. We simply cannot become a large scale manufacturing country today though, we can't compete with the low wages of the far east. If companies are moving out of China because wages have become too high, why would they come here?

 

[Helium_Junkie]

Don't panic! Fuel price rises will cover it

 

[Simon]

Anyone know of an online calc that will tell the difference between this year and next year? I normally use listentotaxman but it hasnt updated with the 08/09 year yet/

Also i assume bonus's also go onto the tax code as if you have earnt it? 40%

 

[platypus]

the worst hit are people in the 40% tax band

 

[Guv]

Anyone know of an online calc that will tell the difference between this year and next year? I normally use listentotaxman but it hasnt updated with the 08/09 year yet/

Also i assume bonus's also go onto the tax code as if you have earnt it? 40%

Don't know of an online calc sorry. I had a very quick search for one last night and couldn't see one so just used excel in the end.

Yep a bonus is added onto your salary and taxed.

 

[nikebee]

That's Labour government for you. Reward the losers and punish the winners.

I only earn £13,500 a year as an SEO and lead programmer... according to what people have been saying, I'll be getting taxed more as well.

I'm hardly a "winner" when it comes to salaries mate.

 

[photoshop]

There are ways to shaft the Gov aswell.

Im a contractor and have set my salary so its just above the mark that is tax free. Think its somewhere like £5200. I pay around £40 tax and NI on that a year. The rest of my income is made up of Dividend payments which are taxed at 21% . I try not to go over the 40% mark and if i do then i do it through the business

 

[Guv]

There are ways to shaft the Gov aswell.

Im a contractor and have set my salary so its just above the mark that is tax free. Think its somewhere like £5200. I pay around £40 tax and NI on that a year. The rest of my income is made up of Dividend payments which are taxed at 21% . I try not to go over the 40% mark and if i do then i do it through the business

So you're running a limited company then?

Dividend payments shouldn't be taxed if you're a basic rate payer or are 25% of the net payment if a higher rate payer.

A lot of contractors do this and if it's done right then yep it's perfectly legal.

If you do all your work for 1 person/company though you need to be careful so you're not caught under IR35.

 

[csmager]

So you're running a limited company then?

Dividend payments shouldn't be taxed if you're a basic rate payer or are 25% of the net payment if a higher rate payer.

But from the other point of view, there's still CT at 21% (for FY08, 20% for this year) charged on profits before being distributed as dividends. So that'll be where the 21% comes from.

 

[-|ScottFree|-]

...snip!

Well said, I could not agree more..

I have said it before and I'll say it again, this country is finished. I hope I can find a decent job in Australia because if I can, I'm gone!!

 

[Stan_Lite]

I have said it before and I'll say it again, this country is finished. I hope I can find a decent job in Australia because if I can, I'm gone!!

What specifically makes you say the country is finished?

Have you actually checked the economic situation in Australia?

They've just had a hike in interest rates and inflation was 3.8% in December, ours was 2.2%.

Under current income tax rates on a salary equivalent to £40,000GBP (approx $85,000AUD) you would pay $21,500AUD (= £10,000GBP) in income tax. In the UK, you would pay around £7,000GBP.

Those are just a few quickly Googled figures.

Still think Australia is the promised land or does the UK not look too bad after all?
I think I'll stay here where I was born and brought up and try to help my fellow citizens and support the country I was born in.
If you want to run away because you can't get everything your own way, it's probably better for us all if you go.

Bye bye (don't forget to pay your taxes before you go)

 

[Soulja]

I'll be £7 worse off a week, Thanks a ******* lot, not like it's already hard enough to live in this country! I'm already on a low wage yet they feel the need to tax me even more!

 

[photoshop]

So you're running a limited company then?

Dividend payments shouldn't be taxed if you're a basic rate payer or are 25% of the net payment if a higher rate payer.
...

If you do all your work for 1 person/company though you need to be careful so you're not caught under IR35.

Ye im Ltd.
I still have to pay Corp Tax on Divis which is 20% and my contract has been checked by independent accountants and is out of reach of IR35

 

[csmager]

Ye im Ltd.
I still have to pay Corp Tax on Divis which is 20% and my contract has been checked by independent accountants and is out of reach of IR35

It doesn't matter what the contract says, if you meet the tests that class as being employed rather than self employed (e.g. do you have to work set hours? are you told what to do? Are you obliged to do anything you are asked? Is the 'employer' obliged to give you work? etc), then HMRC can decide you're actually employed and tax you accordingly - and backdate it. This is usually the case when despite being 'self-employed', you just work for 1 person/company. Lots of folk came went away on Friday employed and came back to their desks on Monday as self-employed consultants. Absolutely nothing had actually changed though - except the amount of tax they paid.. Hence IR35.