HMRC - Income limit for personal allowances
Discussion
Yep, its 114k where all allowances seem to end. The revenue have based codings on previous years earning and said they will alter any cock-ups via next years tax return... Yeah right!
Also, pensions are now seen and taxed as income! Not quite sure how it all works, let the accountant sort it, but still rubbish!
Also, pensions are now seen and taxed as income! Not quite sure how it all works, let the accountant sort it, but still rubbish!
Edited by Twit on Thursday 11th March 17:19
Eric Mc said:
Pensions (including the State Pension) have been taxable for many years.
Yes they have, but I thought the way and amounts they are being taxed had changed?! I'm sure something came through about it!I'm not the most clued up on this, hence I have a decent accountant!! The allowance thing on tax still sucks, not so much paying it, but the principle of it. The 50% band seems more justified and fair than losing basic allowances.
I'm sure it the first time!
I'm not poorly paid so I have no objection to paying more tax but the regs should be transparent. To strip allowances just seems mean spirited, the actual cash amounts aren't really relevant but the tax system should be universal, just start the 50% band lower down.
The allowance change, or lack of it, is a just a cheap election shot.
I'm not poorly paid so I have no objection to paying more tax but the regs should be transparent. To strip allowances just seems mean spirited, the actual cash amounts aren't really relevant but the tax system should be universal, just start the 50% band lower down.
The allowance change, or lack of it, is a just a cheap election shot.
I may have made my point incorrectly, and the point may be wrong! 
Obviously pension being paid out is subject to tax, but I was speaking about pensionn contributions. As I said I'm a bit hazy on this but I thought there had been a change to see pension contributions as taxable income.
For example if a person earns 50k PA and pays 10K PA into a pension pot, which includes both personal and any employer contribution, then your tax bill for the year will be based on an annual income of 60K. As I said I may be wrong, but if that is the case it seems really unfair as you are taxed on the way in and you will taxed again as the cash comes out.
I'm no accountant, so I may wrong but I'm sure there was some kind of change that went through in the last budget.
Obviously pension being paid out is subject to tax, but I was speaking about pensionn contributions. As I said I'm a bit hazy on this but I thought there had been a change to see pension contributions as taxable income.
For example if a person earns 50k PA and pays 10K PA into a pension pot, which includes both personal and any employer contribution, then your tax bill for the year will be based on an annual income of 60K. As I said I may be wrong, but if that is the case it seems really unfair as you are taxed on the way in and you will taxed again as the cash comes out.
I'm no accountant, so I may wrong but I'm sure there was some kind of change that went through in the last budget.
Edited by Twit on Thursday 11th March 23:37
I may have made my point incorrectly, and the point may be wrong!
Obviously pension being paid out is subject to tax, but I was speaking about pensionn contributions. As I said I'm a bit hazy on this but I thought there had been a change to see pension contributions as taxable income.
For example if a person earns 50k PA and pays 10K PA into a pension pot, which includes both personal and any employer contribution, then your tax bill for the year will be based on an annual income of 60K. As I said I may be wrong, but if that is the case it seems really unfair as you are taxed on the way in and you will taxed again as the cash comes out.
I'm no accountant, so I may wrong but I'm sure there was some kind of change that went through in the last budget.
Obviously pension being paid out is subject to tax, but I was speaking about pensionn contributions. As I said I'm a bit hazy on this but I thought there had been a change to see pension contributions as taxable income.
For example if a person earns 50k PA and pays 10K PA into a pension pot, which includes both personal and any employer contribution, then your tax bill for the year will be based on an annual income of 60K. As I said I may be wrong, but if that is the case it seems really unfair as you are taxed on the way in and you will taxed again as the cash comes out.
I'm no accountant, so I may wrong but I'm sure there was some kind of change that went through in the last budget.
Edited by Twit on Friday 12th March 09:18
Eric Mc said:
For some people, it will mean an effective tax rate of over 60%.
I think it is the first time since the introduction of Personal Tax Allowances that a system has been brought in that effectively removes these allowances from a certain class of people.
Same thing happens with the age related allowances AFAIK.I think it is the first time since the introduction of Personal Tax Allowances that a system has been brought in that effectively removes these allowances from a certain class of people.
Eric Mc said:
Similar but not exactly the same. The additional allowances given to older people are gradually reduced if their income exceeds £21,000. However, it is only the extra Age Related allowance which is reduced. They would always retain their basic personal allowance.
Yup. Similar dishonesty in calling it an allowance when it's a defacto rate hike though...Not really - in the case of OAPs.
Because of the additional allowances OAPs are entitled too - their "de facto" tax rate is lower than the basic 20% that every other basic Rate taxpayer pays. When their income exceeds £21,000, they start going back towrds the 20% tax rate by increments.
Because of the additional allowances OAPs are entitled too - their "de facto" tax rate is lower than the basic 20% that every other basic Rate taxpayer pays. When their income exceeds £21,000, they start going back towrds the 20% tax rate by increments.
Eric Mc said:
Not really - in the case of OAPs.
Because of the additional allowances OAPs are entitled too - their "de facto" tax rate is lower than the basic 20% that every other basic Rate taxpayer pays. When their income exceeds £21,000, they start going back towrds the 20% tax rate by increments.
True enough, still doesn't make the Budget announcement any less duplicitous.Because of the additional allowances OAPs are entitled too - their "de facto" tax rate is lower than the basic 20% that every other basic Rate taxpayer pays. When their income exceeds £21,000, they start going back towrds the 20% tax rate by increments.
Eric Mc said:
Which Budget Announcement?
The Age Abatement system for OAP tax allowances has been around for decades.
I only became aware of it fairly recently when my Mum said she wouldn't be benefiting from an announced increase in age related "allowances". It struck me as dishonest to describe it as an allowance when it behaved quite differently to all others.The Age Abatement system for OAP tax allowances has been around for decades.
Eric Mc said:
The new tax rules for higher earners (which was announced back in November 2009) is genuinely duplicitous.
Indeed.
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