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Should 50p tax rate be now paid retrospectively?
It now turns out that taxpayers in this 50p band arranged their affairs before this years tax demands so £bns could escape the tax. This means the return for this year is extremely low. So low in fact Osborne is rumoured to remove the 50p tax rate altogether in Wednesdays budget.
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Quite the right thing to do.
How I would love to see the HK system, one flat 15% tax - used to be on £13000 or above and that was several years ago. 50% paid on the year before, 50% on expected earnings. No exemptions at all, excepting if you had elderly or dependent handidcapped people living with you - and then high excise taxation on anything involving alcohol and weed.
result the lowest numbered Inland Revenue service in the world and folk pay their dues. I would love to see that model applied here and what impact that iut would have......
How I would love to see the HK system, one flat 15% tax - used to be on £13000 or above and that was several years ago. 50% paid on the year before, 50% on expected earnings. No exemptions at all, excepting if you had elderly or dependent handidcapped people living with you - and then high excise taxation on anything involving alcohol and weed.
result the lowest numbered Inland Revenue service in the world and folk pay their dues. I would love to see that model applied here and what impact that iut would have......
The poorest do not make the biggest contribution to income tax and NI revenue, rov, neither in absolute terms nor in percentage terms. In 2011-12 the percentage deductions for income tax and NI for people on various salaries is as follows:
£10,000 8.38%
£12,600 13.25%
£20,000 20.19%
£50,000 28.79%
£100,000 35.39%
£200,000 42.69%
£1,000,000 50.14%
So you can see that a worker on the National Minimum Wage (£12,600) is left with about 87% of his pay, whilst the banker on £200k is left with less than 58%.
If the 50% rate is abolished and the changes to basic rate and higher rate allowances go ahead as suggested all of the salary amounts I have shown will see an increase in their retained income. Of course those earning £150k plus will benefit most, but that’s because they are currently being taxed punitively for no reason other than political point-scoring.
Anybody with any sense does their best to minimise their tax bill. Those paying the most will do the most in that respect. All power to their elbow. I’d do the same if it was worthwhile. Instead of finding ways to increase revenue the government needs to concentrate on reducing expenditure. It is not doing so. All it is trying to do (not very successfully) is to reduce the rate at which expenditure is increasing.
£10,000 8.38%
£12,600 13.25%
£20,000 20.19%
£50,000 28.79%
£100,000 35.39%
£200,000 42.69%
£1,000,000 50.14%
So you can see that a worker on the National Minimum Wage (£12,600) is left with about 87% of his pay, whilst the banker on £200k is left with less than 58%.
If the 50% rate is abolished and the changes to basic rate and higher rate allowances go ahead as suggested all of the salary amounts I have shown will see an increase in their retained income. Of course those earning £150k plus will benefit most, but that’s because they are currently being taxed punitively for no reason other than political point-scoring.
Anybody with any sense does their best to minimise their tax bill. Those paying the most will do the most in that respect. All power to their elbow. I’d do the same if it was worthwhile. Instead of finding ways to increase revenue the government needs to concentrate on reducing expenditure. It is not doing so. All it is trying to do (not very successfully) is to reduce the rate at which expenditure is increasing.
I think it would be immoral to make such things retrospective. It is up to the government to ensure there are no loopholes of note. No one wants or should be expected to pay more into the public kitty than the rules demand of them. Perhaps if there is a problem the cabinet can put their collective hands into their collective pockets and add the difference to the kitty.
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The point is that there are an awful lot of 8.3% taxpayers and not an awful lot of 50.14%. It has also been pointed out in the media that unpaid tax dwarfs the benifit bill.
youngmafbog The loop holes exist already and no one is closing them and no they won't bugger off because they won't have an income. I remember the woe out of the city when Labour put tax up to 40% how they were all going to leave to Frankfurt and Paris Lo and behold they are still here. Why because Franfurt and Paris have there own financial leeches and don't need ours.
Its like the Prudetial off to Hong Kong I bet every other insurance company in the country is licking their lips in anticipation.
youngmafbog The loop holes exist already and no one is closing them and no they won't bugger off because they won't have an income. I remember the woe out of the city when Labour put tax up to 40% how they were all going to leave to Frankfurt and Paris Lo and behold they are still here. Why because Franfurt and Paris have there own financial leeches and don't need ours.
Its like the Prudetial off to Hong Kong I bet every other insurance company in the country is licking their lips in anticipation.
Yes all noted but the way the government will present it tomorrow is that the 50% tax does not work because it brought in so little revenue. So they can blame Labour for introducing it. Given time it obviously will work but Cameron and Osborne's only intention will be to help the better off. The rich are all in it together so don't be kidded otherwise.
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