The party of taxation - Here we go hitting pensioners again!

biglouis

Many pensioners may be drawn into the tax system or a higher tax bracket because of so-called "fiscal drag" (freezing the tax fee allowances). In the current climate this is a mean and sleazy way of increasing taxation. It more or less invites people to find a cash in hand side hustle to make up the deficit.

Short term pain for long term gain??? Well I wont live long enough to see the long term gain so no thanks mate. Youve already had enough of my taxes for things I do not want and cannot use.

The fiscal drag of frozen personal allowances would have happened under a Tory administration as they introduced it ( Hunt, I believe). I am appalled at how many people lacked the economic knowledge to be aware of the implications of this.

HousePlantQueen

biglouis

Many pensioners may be drawn into the tax system or a higher tax bracket because of so-called "fiscal drag" (freezing the tax fee allowances). In the current climate this is a mean and sleazy way of increasing taxation. It more or less invites people to find a cash in hand side hustle to make up the deficit.

Short term pain for long term gain??? Well I wont live long enough to see the long term gain so no thanks mate. Youve already had enough of my taxes for things I do not want and cannot use.

The fiscal drag of frozen personal allowances would have happened under a Tory administration as they introduced it ( Hunt, I believe). I am appalled at how many people lacked the economic knowledge to be aware of the implications of this.

I agree with you, but it's not only pensioners who are hit by it. Any pay rise will immediately be reduced by a person's marginal tax rate.

I'm still a bit confused about the OP's original title of this thread.

Everyone needs to contribute to improve the country's finances for all and to have better public services and the vulnerable in our society better cared for such as children in care, children with additional needs, prisoners, homeless etc. I am prepared to lower my standard of living if I feel it helps the vulnerable.

ronib

Shropshirelass so increasing the National Insurance employer’s contribution will have consequences. We can guess - fewer jobs and lower employer’s pension contributions. Any other possible outcomes? Higher unemployment benefit bills?

A reduction in C Tax payable. Expenses increase, profits reduce, CT liability goes down.

The dividend allowance was reduced to £500 for 2024/25 from £1000 for 2023/24 so that should bring in more tax. However, why should dividend income be taxed at the basic rate of 8.75% compared to the 20% rate used on other income.

Furthermore, why should people who take in a lodger be able to claim rent a room relief of £7,500?

I’m not a pensioner as yet so have no skin in the game about what pensioners should have to pay, but let me say this, that they have worked and paid into the system during their lives and if still working then are still paying income tax and NI.
For those older pensioners who aren’t working either retired or unable to work, if they have any kind of pension then they will continue to pay tax on that ( private pension) and for those who just have a State pension and maybe a tiny amount coming in so no tax, then that’s fair enough, they don’t earn much and aren’t taking any benefits from the system.
Why should non working pensioners have to pay any more?

I suppose the lodger thing is to help the homeless situation. It can't be easy to have someone living in your house with you*, so if people had to pay full tax on it, fewer would bother.

*or maybe that's just me, as I like my privacy?

mumofmadboys

Everyone needs to contribute to improve the country's finances for all and to have better public services and the vulnerable in our society better cared for such as children in care, children with additional needs, prisoners, homeless etc. I am prepared to lower my standard of living if I feel it helps the vulnerable.

That’s what hiking the income tax would have done.They were foolish to rule that out in their eagerness to get into power.
They would have won anyway and could have simply said they would review taxation once they formed a government.

Wyllow3

And.....yes, its fresh out of the Daily Mail headlines today.
Let's wait for the actual budget for those all so crucial details.

Generally speaking, the increases needed for the NHS and other facilities we all use, unless you have private health insurance, cannot be conjured out of the ether.

How do posters think we should raise the money?

By not spending on a whole bunch of things, and part things, that are spent on at present.

Will write a list when I want to.

Sometimes money can be obtained, by not spending on certain things.
It certainly does not always mean, raising taxes.

Oreo

I’m not a pensioner as yet so have no skin in the game about what pensioners should have to pay, but let me say this, that they have worked and paid into the system during their lives and if still working then are still paying income tax and NI.
For those older pensioners who aren’t working either retired or unable to work, if they have any kind of pension then they will continue to pay tax on that ( private pension) and for those who just have a State pension and maybe a tiny amount coming in so no tax, then that’s fair enough, they don’t earn much and aren’t taking any benefits from the system.
Why should non working pensioners have to pay any more?

Firstly, pensioners don't pay NI.

Secondly, I don't understand why the argument about non-working pensioners is relevant. They are no different from anybody who has an income from property or shares of any age. Their age isn't relevant.

Oreo

mumofmadboys

Everyone needs to contribute to improve the country's finances for all and to have better public services and the vulnerable in our society better cared for such as children in care, children with additional needs, prisoners, homeless etc. I am prepared to lower my standard of living if I feel it helps the vulnerable.

That’s what hiking the income tax would have done.They were foolish to rule that out in their eagerness to get into power.
They would have won anyway and could have simply said they would review taxation once they formed a government.

I suspect Labour does regret its promise about income tax. However, even a few months before the election, I don't think anybody really forecast how big their majority would be. They were trying to reassure the "just about managing" and middle income voters that the headline income tax figure wouldn't increase.

Dinahmo

The dividend allowance was reduced to £500 for 2024/25 from £1000 for 2023/24 so that should bring in more tax. However, why should dividend income be taxed at the basic rate of 8.75% compared to the 20% rate used on other income.

Furthermore, why should people who take in a lodger be able to claim rent a room relief of £7,500?

I have seen the 'double taxation' argument used in defence of the low rate on dividend income.

Firstly, as the OP used it that investments were made with already taxed income, so why should it be taxed again? And secondly, that company profits, out of which dividends are paid, have already been taxed, so why tax the dividend again?

I don't see that either argument is valid. Income tax, as I keep repeating, is not the only tax. Everything we purchase that has VAT on it is just another form of 'double taxation'.

One could, equally, turn the argument round and ask why is VAT 20% when other 'double taxes' are only 8.75%? [hmm}

Ok, they don’t pay NI then, but they do pay income tax if working, and on their private pensions.
If they have an income stream from owning and letting property then that would be taxed too.

Oreo

Ok, they don’t pay NI then, but they do pay income tax if working, and on their private pensions.
If they have an income stream from owning and letting property then that would be taxed too.

Why shouldn't it be?

Everybody who has an income stream from owning and letting property pays tax (unless they have a clever accountant), so why should pensioners be an exception?

No reason at all, just saying that they do.Income tax on your private pension or any income stream is already being paid by pensioners.There are some who would like them also to pay NI as well, whenever these kind of discussions come up on forums.

Oreo

No reason at all, just saying that they do.Income tax on your private pension or any income stream is already being paid by pensioners.There are some who would like them also to pay NI as well, whenever these kind of discussions come up on forums.

Ah well! I'm baffled. I just don't understand the OP about pensioners about to be "hit" again.

growstuff

Oreo

No reason at all, just saying that they do.Income tax on your private pension or any income stream is already being paid by pensioners.There are some who would like them also to pay NI as well, whenever these kind of discussions come up on forums.

Ah well! I'm baffled. I just don't understand the OP about pensioners about to be "hit" again.

I don't understand it either, growstuff.

I live mostly on (taxed) pension, and also pay both tax and NI on everything I earn. It is sometimes irritating, as I don't earn enough to pay tax without the pension, so someone doing the same job as me who does not get a pension will get 20% more if they also pay NI, and a lot more if they don't. My NI contributions don't even go towards my pension as I have the full number of years, some of which I paid for separately because of being opted out. In total I have 47 years of NI, plus six years of voluntary contributions. I think that counts as paying my dues, but I accept that all income is taxed.

I agree with mumofmadboys when she says Everyone needs to contribute to improve the country's finances for all and to have better public services and the vulnerable in our society better cared for such as children in care, children with additional needs, prisoners, homeless etc. I am prepared to lower my standard of living if I feel it helps the vulnerable, but I can see no reason at all why 'working people' (and I count myself as such) should be the ones to pay more and more tax , whatever their age, when those who don't work pay less. How is that the fairest way?

Also, I've never really understood the argument that those who don't pay income tax still pay tax such as VAT. If they are spending money someone else has earned it is still one salary that is being spent, regardless of who goes to the shops.

First of all, I’m not the OP, second I think that she has a point about pensioners who have already paid tax having money from shares taxed again.We want people to save for themselves surely. We don’t know what will happen in the Budget but things are always leaked on purpose before it happens.
There does seem to be quite a bit of pensioner bashing going on, both from our new government and from posters on here.

First of all, I’m not the OP, second I think that she has a point about pensioners who have already paid tax having money from shares taxed again.

She doesn't have a point at all. Using her reasoning we shouldn't be paying VAT at all because we are paying for purchases out of already taxed income.

Income tax is not the only tax on our money.

And also, AFAIK, nothing is being targeted at pensioners. Any policies will apply across the board.

I disagree, but life is too short 😄Strictly is on and I need a cuppa. leave you to it.

I agree with you Maizie and Doodledog.

Incidentally, surely anybody who has the profit from shares taxed has bought the shares from taxed income. Pensioners aren't some special case.

growstuff

Incidentally, surely anybody who has the profit from shares taxed has bought the shares from taxed income. Pensioners aren't some special case.

Of course, the 'earned' money 'invested' isn't taxed. The only element that is taxed is the interest or dividend. Which hasn't been 'earned'.

It's a thoroughly fallacious argument...

MaizieD

growstuff

Incidentally, surely anybody who has the profit from shares taxed has bought the shares from taxed income. Pensioners aren't some special case.

Of course, the 'earned' money 'invested' isn't taxed. The only element that is taxed is the interest or dividend. Which hasn't been 'earned'.

It's a thoroughly fallacious argument...

On most investments the capital growth is taxed as well, those that invest on a personal level get taxed heavily, the big money makers are the corporate investors, they pay very little tax because they can manipulate the finances. The company can buy houses, boats, aeroplanes, whatever you want, the UK can’t change that because it’s international, the ultra wealthy are very hard to tax.

Jeff Bezos of Amazon pays very little tax, some years he pays none and there are plenty more like him.