With the income tax threshold frozen at £12,570 since 2021-22, anyone with a state pension next year of more than £242 a week will have some tax to pay.

Dinahmo

Has anybody read my earlier post in which I wrote that for anyone who just receives the state pension their tax liability would be £2.80. Why keep on about pensioners not being told what tax they will have to pay. the chances are that HMRC won't bother to collect £2.80 because of the costs involved.

On another note, how many of you know about the Marriage allowance whereby anyone hose income is below the personal allowance can transfer the balance, up to £1260, to their spouse or civil partner if their income is above the PA.

You can go back 4 years if eligible. Here's a link:

www.tax.service.gov.uk/marriage-allowance-application/how-it-works

Because Dinamo, it is not just that it's a most ridiculous situation for the government to put themselves into but may create a lot of deeply unnecessary anxiety.

Another tetchy thread. This one from the get go. Why can’t things be discussed respectfully?

If a poster adds a point to what someone else says it doesn’t mean that they haven’t read the previous post. Adding something is not taking it off topic unless there is no relevance at all. Disagreement is not attack. People just have different opinions is all.

It's a mad world Doodledog.

Off thread: On Politics Live today they were talking about the lack of housing and housing costs. Apparently, last year, the average house earned more than the average worker.

It's all upside down.

Dinahmo

Has anybody read my earlier post in which I wrote that for anyone who just receives the state pension their tax liability would be £2.80. Why keep on about pensioners not being told what tax they will have to pay. the chances are that HMRC won't bother to collect £2.80 because of the costs involved.

On another note, how many of you know about the Marriage allowance whereby anyone hose income is below the personal allowance can transfer the balance, up to £1260, to their spouse or civil partner if their income is above the PA.

You can go back 4 years if eligible. Here's a link:

www.tax.service.gov.uk/marriage-allowance-application/how-it-works

I read your previous post.

I think £2.80 won't cause knicker to twist, but who knows.

I assume many people use Marriage allowance/ Well done you, good thing for people to be aware of/ up to date regarding.

Norah Thank you.I try to be helpful sometimes.

Thanks to DaisyAnne and Dinahmo for responding to my question. The older I get the more taxing tax becomes for me.

Dinahmo On another note, how many of you know about the Marriage allowance whereby anyone hose income is below the personal allowance can transfer the balance, up to £1260, to their spouse or civil partner if their income is above the PA.

You can go back 4 years if eligible. Here's a link:

www.tax.service.gov.uk/marriage-allowance-application/how-it-works

Brilliant for people who want a parent at home with children.

I'm sure it is, but I really don't understand the thinking that allows people who don't paying tax but use the things it pays for to also get an allowance that can be transferred if they can afford to keep a parent at home. So a household with two adults pays one lot of tax, which is reduced by an additional allowance, and the non-payer also gets NI contributions made up out of the collective 'pot'. Meanwhile, those who can't afford to have a parent at home pay two lots of tax, two lots of NI as well as childcare and travel expenses. It's baffling logic, really.

If you'd stop believing that tax paid for public services, which it doesn't, perhaps you'd not be so worried about it.

Also, there are millions of people who don't pay tax but use public services. Do you resent every single one of them?

I'm not worried about it, and I don't resent anyone

I just don't understand the thinking behind the system.

If countries can just print money, why are there rich ones and poor ones?

This has been discussed on a few pension boards I am on, firstly those who say the old state pension was below the tax threshold are actually wrong, under the old scheme people who had a SERPS and possibly graduated retirement benefit as well were very often over the tax threshold on just their state pension income, my late dad who died last march had a state pension income alone of just under £350 a week made up of his basic, GRB and SERPS, when he was alive he had to fill out a tax return, in fact his tax had to be settled from his estate before any money was paid to his family.

Nothing has changed, pensioners are still liable to pay their own tax if their state pension income alone is over the tax threshold, the only change is that pensioners who reached state pension age after 6th April 2016 now have to wait for a letter from HMRC telling them how much they have to pay and how to pay it, pensioners who reached state pension age before 6th April 2016 still have to fill in a tax return.

This will not affect any pensioner who still works or has a private pension as that will be deducted by PAYE it will only affect those pensioners on the new state pension if they have a protected payment which now replaces SERPS.

Our own situation is as follows both me and my husband have a state pension which is over the tax threshold, if it was our only income as my husband reached SPA before 6h April 2016 he would have to fill out a tax return, I reached SPA after 6th April 2016 therefore I would get a letter from HMRC, as it is I still work so my tax is deducted through PAYE by my employer, my husband has a private pension and his tax is deducted through PAYE by his pension provider

Doodledog

I'm sure it is, but I really don't understand the thinking that allows people who don't paying tax but use the things it pays for to also get an allowance that can be transferred if they can afford to keep a parent at home. So a household with two adults pays one lot of tax, which is reduced by an additional allowance, and the non-payer also gets NI contributions made up out of the collective 'pot'. Meanwhile, those who can't afford to have a parent at home pay two lots of tax, two lots of NI as well as childcare and travel expenses. It's baffling logic, really.

We do have an issue with goverments using "household" income in some areas and individual income in others Doodledog. No party seems to be suggesting a change to exclusively one or the other as far as I can see.

Doodledog

I'm sure it is, but I really don't understand the thinking that allows people who don't paying tax but use the things it pays for to also get an allowance that can be transferred if they can afford to keep a parent at home. So a household with two adults pays one lot of tax, which is reduced by an additional allowance, and the non-payer also gets NI contributions made up out of the collective 'pot'. Meanwhile, those who can't afford to have a parent at home pay two lots of tax, two lots of NI as well as childcare and travel expenses. It's baffling logic, really.

Surely there are more non-working people than just stay at home parents and grandparents - no matter how or who I think it's magnificent people raise their own children and have no need of childminders.. Battle I happily lose

Norah

Doodledog

I'm sure it is, but I really don't understand the thinking that allows people who don't paying tax but use the things it pays for to also get an allowance that can be transferred if they can afford to keep a parent at home. So a household with two adults pays one lot of tax, which is reduced by an additional allowance, and the non-payer also gets NI contributions made up out of the collective 'pot'. Meanwhile, those who can't afford to have a parent at home pay two lots of tax, two lots of NI as well as childcare and travel expenses. It's baffling logic, really.

Surely there are more non-working people than just stay at home parents and grandparents - no matter how or who I think it's magnificent people raise their own children and have no need of childminders.. Battle I happily lose

I don't know any, apart from people who are too ill/disabled to work or are unintentionally unemployed.

i was one of them for ten years.
carer's allowance only. now it's 76 pound per week.
yippee. living the life of riley.
i suppose you resent that i had NI credits with it.

firstly those who say the old state pension was below the tax threshold are actually wrong.

They are not "wrong" Chakotay. The full basic pension, old or new, is under the tax threshold and always has been. Currently, those who only get a full new pension are about under £2,000 under the personal tax allowance and someone only getting the legacy (old) pension* would be about £4,500 under the tax allowance.

Of course some, who had SERPS or other additional pensions or income will have paid tax. That is not point.

The concern is that a number of people, on the legacy pension and with an amount of SERPS that has still kept them under the tax threshold, will receive increases this year that bounce them above the frozen Personal Tax Allowance.

HMRC will write to pensioners after the end of the tax year, telling them they haven’t paid the tax due on their state pension and requiring them to make a payment before 31 January the following year.

This means pensioners could have received – and spent – all of their pension during one financial year, only to receive a tax bill on that pension the following year, LCP says**.

My OP was not about all pensioners. It was about a small group of often the most elderly. I thought it worth flagging the issue and offering some forewarning.

We are not "all in this together". I am truly glad you and your husband are okay, but some will be terrified by an out of blue tax demand.

It seems some on GN are completely unaware that people - often women - could work hard all their lives as cleaners, carers, dinner ladies, etc., and never earn enough to pay tax.

** LPC, the company ex-pensions minister, Steve Webb, now works for.

*Anyone whose only income is the full (or partial) legacy State Pension should check whether they are eligible for Pension Credit.

Dinahmo has already pointed out that the amount of tax payable will be extremely small.

MaizieD

If you'd stop believing that tax paid for public services, which it doesn't, perhaps you'd not be so worried about it.

Also, there are millions of people who don't pay tax but use public services. Do you resent every single one of them?

I'm glad you said that, because it's exactly what I was thinking about yesterday.
I remember from previous threads reading that tax does not pay for public services, so I went online yesterday to see where income tax goes.

All I can find are numerous sites and pie charts that say that my tax is used for public services.

I am not arguing with you! I'm wondering if you can point me to information about where income tax does go.

I've paid income tax for 51 years, either in employment or in retirement (occupational pension), and always willingly, because I thought I was supporting services for those who need them and for the next generation, and for those services I currently access. I'd like to know what really happens to it. 🪷

And I have pointed out that this is not the issue GSM.

Doodledog

I'm not worried about it, and I don't resent anyone

I just don't understand the thinking behind the system.

If countries can just print money, why are there rich ones and poor ones?

Basically, Dd, money is something of a confidence trick. It's a unit of exchange which carries a store of value which everyone uses it trusts. It could be anything, from shells, to cattle to cigarettes...

The first part of the first article in this Bank of England Quarterly Bulletin sets this out quite clearly. It's better that people read it than I try to interpret it in my own words.

www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/quarterly-bulletin-2014-q1.pdf

This, the next article in the Bulletin explains how it is created by banks issuing credit (bank loans) , though it's rather silent on the role of the Bank of England in 'creating' money, which it does all the time.

www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf?la=en&hash=9A8788FD44A62D8BB927123544205CE476E01654

If countries can just print money, why are there rich ones and poor ones?

Poor countries have currency which isn't trusted to hold value is what it boils down to...

Taxation is primarily a method of ensuring that everyone in a country uses the country's currency because taxes are paid in that currency. It also reclaims most of the money that the state has issued so that there isn't an excess of money in the economy to cause inflation.

Historically tax revenue was needed to support the administration of the country (the monarch and government institutions) but that was when currency was backed by gold, which restricted the amount of currency that could be issued.

The gold standard was abolished 50 years ago; so long as the currency is trusted and retains its 'value' to its users, the state can issue whatever it needs to cover its spending. It doesn't need tax to do this. The currency retains its value so long as there is something to spend it on...

The problem with money is that, for some people,acquiring money for the sake of having lots of money, rather than for using it as a medium of exchange, has become an end in itself. The huge amounts of money they have taken out of the economy are worthless to society because it isn't used for economic activity. But it's not worthless to its possessors because it 'buys' them power. Power to control economies in order to make further acquisition of money easier for them.

But I suppose that's another story...

Thanks for the links, which I will read, but for now - why pay tax at all if it is not paying for anything? As Ailidh says, there are plenty of charts etc saying how tax is spent - basically on things that we all use. This is why I feel that it is unfair that those who work have to pay for them when those who don't still use them, and more so when those who don't work also get a tax allowance on tax they don't pay.

It's not about resenting people, or being 'so worried about it' - that is emotive language designed to make me look bitter and petty, which is unfair. I just don't understand why 'the system' allows some people to opt out of paying tax by not working, when it is actually illegal for those who do work not to pay it.

If tax paying for public services is all a trick, why does everyone buy into it, on all points on the political spectrum? If a prospective government offered to abolish tax as it doesn't buy anything they would be in power forever.

DaisyAnneReturns

And I have pointed out that this is not the issue GSM.

So what exactly is the issue?

Germanshepherdsmum

DaisyAnneReturns

And I have pointed out that this is not the issue GSM.

So what exactly is the issue?

Germanshepherdsmum

DaisyAnneReturns

And I have pointed out that this is not the issue GSM.

So what exactly is the issue?

Isn't it customary, and polite, to read and watch the information in the OP before we get to Page 3 GSM?

Ailidh

MaizieD

If you'd stop believing that tax paid for public services, which it doesn't, perhaps you'd not be so worried about it.

Also, there are millions of people who don't pay tax but use public services. Do you resent every single one of them?

I'm glad you said that, because it's exactly what I was thinking about yesterday.
I remember from previous threads reading that tax does not pay for public services, so I went online yesterday to see where income tax goes.

All I can find are numerous sites and pie charts that say that my tax is used for public services.

I am not arguing with you! I'm wondering if you can point me to information about where income tax does go.

I've paid income tax for 51 years, either in employment or in retirement (occupational pension), and always willingly, because I thought I was supporting services for those who need them and for the next generation, and for those services I currently access. I'd like to know what really happens to it. 🪷

Of course you'll go on line and find loads of articles that say that tax is needed to pay for public services. But that's a hang over from the days when currency was backed by gold or silver. This restricted the amount of money that a state could issue (and all our money, except foreign investment, or any surplus that might be made from foreign trade, is issued by the state. And we don't make a surplus from foreign trade...) Any shortfalls were made up for by borrowing from other countries or exceedingly wealthy people.

In fact, the state has always spent in advance of collecting tax revenue. You can find references to that in Adam Smith's work in the 18th century (one of the 'fathers' of modern economics)

If you find the work of 'heterodox' economists you find that their research dispels the 'tax before spending' idea. Most economics is concerned with how money circulates in the economy without questioning how it gets into the economy in the first place. The heterodox ones asked 'How did it get into the economy?' and set about researching it. The answer they found was that the state issues money into the economy and taxation controls the amount of money circulating by destroying the excess.

The idea that taxation funds spending is very useful for governments because it enables them to pursue their own ideological agendas. The government that wants to privatise public services tells the public that their taxes don't supply enough revenue to fund those services. The public believes them and puts up with the result.

If the public understood that the funding came before taxation (and that the funding increased the tax take) they wouldn't be quite so accepting. They could also make more informed political choices because they wouldn't be constrained by the belief that, desirable though a course of action might be, the country 'can't afford it'.

One of the most respected economists of the last century, Keynes, said:

"We do nothing because we have not the money. But it is precisely because we do not do anything that we have not the money."