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The 10p tax rate abolishment... how are you affected?

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My partner and I lose out from this. We earn just over £30k between us and it makes me feel sick that on the 30th I will pay more tax than last month while friends that earn more will pay less... H… Read More
gileswendes@hotm Avatar
9y, 2m agoPosted 9 years, 2 months ago
My partner and I lose out from this. We earn just over £30k between us and it makes me feel sick that on the 30th I will pay more tax than last month while friends that earn more will pay less...

How does it affect you?
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gileswendes@hotm Avatar
9y, 2m agoPosted 9 years, 2 months ago
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#1
can you be a bit more specific, im not au fait compli with all the new tax stuff yet?
#2
it's taken a big chunk of my wages, and hawkios alike

stupid government.
banned#4
[email protected];1950931

More labour / guardian spin.

Everyone I know pays far more tax (albeit by stealth) than ever before. My council tax has gone up 120% since 1997 alone! No-one seriously believes inflation has been 2% per year since 1997!

Do they? :w00t:
#5
Try this tax calculator if you're not sure...
Put in your wage now, select 2008/9 and calculate
#6
This new tax will hit me and my husband badly as we are on low wages, it makes me mad how do they expect the people that are poorer to live?
#7
looking at that, I'll be better off. Hubby full timer and I only part timer stil September but we have 5 kids so good for me I reckon.
#8
they say that tax credits will build up income, but unless you have kids or are over 25, you have no chance of getting tax credits.
#9
tax... dont konw much about it apart from we pay a heck of a lot and dont qualify for tax credits for the lil uns! boooo!
#10
Have any of you used the BBC Budget 2008 Calculator? The car tax section seems messed up to me at least, but it's not a bad place to look........
#11
[email protected]
Try this tax calculator if you're not sure...
Put in your wage now, select 2008/9 and calculate


Where's the calculator? I was thinking about this the other day so would be interested to see. Can anyone explain what the change is? I thought that the 10p rate was for such a small amount that it wouldn't make much difference.

Isn't the 22p rate coming down to 20p tho?
#12
Benjimoron
Where's the calculator? I was thinking about this the other day so would be interested to see. Can anyone explain what the change is? I thought that the 10p rate was for such a small amount that it wouldn't make much difference.

Isn't the 22p rate coming down to 20p tho?


The 10p rate was between the tax free allowance and the 22p normal rate. If you're on under £17k(ish) you'll lose out because the 2p tax cut is not enough to offset the lower tax you were paying when there was a 10p rate...

The calculator is at the top of the page here (remember to select 2008/9): http://www.listentotaxman.com/ there's also a BBC one as pointed out in another post... (edit: here http://news.bbc.co.uk/1/hi/in_depth/629/629/7290230.stm)
#13
Say you earn £20k - £30k. Does this change in tax benefit you?
banned#14
Kitten13;1950981
they say that tax credits will build up income, but unless you have kids or are over 25, you have no chance of getting tax credits.

or your partner earns 20K+
#15
Toybhoy
Say you earn £20k - £30k. Does this change in tax benefit you?


Yes. You'll be better off.
#16
there was 10p in each gbp which was not taxed, since the tax rate dropped to 20% the 10p buffer has been lost, meaning that we now loose 20p in every gbp. as opposed to the 19p we lost from every pound previously. so it's only a penny, but for every 100quid you earn, thats a quid more. so we are loosing 20quid for every hundred we earn. and when your on min wage, thats no good
#17
Using the base information of salary only, ignoring car, cigs, alcohol etc, the figure where this is NO change is £15,350 using the BBC calculator i posted previously. Above this figure, you gain, below, you lose
This will of course change based on marital status, children, car usage, etc etc and should be used as an idicative figure only
Go £1 below £15350 and you lose 2p, above by a £1 and you gain 2p
#18
csiman
or your partner earns 20K+


We don't have any kids and I earn less than £20k, even if were over 25 we still wouldn't be eligible for tax credits - I've checked...

Slightly off-topic... WTF do you become eligible for tax credits at 25 - I didn't realise it was a magic age... any logic behind this?

Everything should be linked to your wages and contributions... if I'm unemployed but I've never paid tax... then...

... *too politically incorrect to post*
#19
I was told in the job centre once your 25 you can get tax credits.
banned#20
Kitten13;1951125
there was 10p in each gbp which was not taxed, since the tax rate dropped to 20% the 10p buffer has been lost, meaning that we now loose 20p in every gbp. as opposed to the 19p we lost from every pound previously. so it's only a penny, but for every 100quid you earn, thats a quid more. so we are loosing 20quid for every hundred we earn. and when your on min wage, thats no good

No idea where you got that info from but its completely wrong.

You have a tax free allowance where you do not get taxed at all (2007/08 tax year)

[LEFT] Income tax allowances
[/LEFT]
[LEFT] 2007-08 (£) first figures 2008-09 (£) second figures
[/LEFT]
[LEFT] Personal allowance
[/LEFT]
[LEFT] 5,225
[/LEFT]
[LEFT] 5,435
[/LEFT]
[LEFT] Personal allowance for people aged 65-74 (1)
[/LEFT]
[LEFT] 7,550
[/LEFT]
[LEFT] 9,030
[/LEFT]
[LEFT] Personal allowance for people aged 75 and over (1)
[/LEFT]
[LEFT] 7,690
[/LEFT]
[LEFT] 9,180
[/LEFT]
Married couple's allowance (born before 6th April 1935 but aged under 75) (1) (2)
6,285
6,535
Married couple's allowance - aged 75 and over (1) (2)
6,365
6,625
[LEFT] Income limit for age-related allowances
[/LEFT]
[LEFT] 20,900
[/LEFT]
[LEFT] 21,800
[/LEFT]
[LEFT] Minimum amount of married couple's allowance
[/LEFT]
[LEFT] 2,440
[/LEFT]
[LEFT] 2,540
[/LEFT]
[LEFT] Blind person's allowance
[/LEFT]
[LEFT] 1,730
[/LEFT]
[LEFT] 1,800
[/LEFT]


Then the next £2330 was taxed at 10% and then 22% on the rest up to the 40% tax band. All that has changed is the 10% tax band has disappeared and the 22% has been brought down to 20%

Income Tax: taxable bands 2007-08
£ per year
2008-09
£ per year
Starting rate: 10%
£0-£2,230


Basic rate:22%
£2,231-£34,600
Basic rate: 20%*
£0-£36,000
Higher rate: 40%
Over £34, 600
Higher rate: 40%*
Over £36,000
banned#21
Working Tax Credit is for people who are employed or self-employed (either on their own or in a partnership), who [LIST]
[*] usually work 16 hours or more a week
[*] are paid for that work, and
[*] expect to work for at least 4 weeks[/LIST] and who are
[LIST]
[*] aged 16 or over and responsible for at least one child, or
[*] aged 16 or over and [URL="javascript:DoGlossary('disableddisability');"]disabled[/URL], or
[*] aged 25 or over and usually work at least 30 hours a week[/LIST]
banned#22
Check here to see if you qualify for a tax credit. Many people don't claim it despite being entitled!

Mines a pint ;)

http://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx
#23
There is going to be compensation for those who have lost out, Alastair Darling has said this morning:

http://news.bbc.co.uk/1/hi/uk_politics/7362283.stm
#24
My son and I will both be worse off and whereas my husband will be better off from the tax point of view he will be worse off due to changes to national insurance!!
#25
everyone involved in this stupid decision should be fired. it wasn't bad in the first place, so why did they try and fix it?
banned#26
Kitten13;1951247
everyone involved in this stupid decision should be fired. it wasn't bad in the first place, so why did they try and fix it?

Because its a nice headline grabber putting base rate from 22% to 20%. No idea why its taken a year for MPs to start moaning about it - local elections perhaps ;-)

it was clearly pointed out in all the papers at the time of the budget last year people would lose out! :?
#27
just goes to proove we have a bunch of performing monkeys leading the country.
#28
Limited companies, pay yourself a directors fee then take the rest as dividends..... its the way forward (until HMRC try to move the goalposts again.
banned#29
calmacuk;1951226
There is going to be compensation for those who have lost out, Alastair Darling has said this morning:

http://news.bbc.co.uk/1/hi/uk_politics/7362283.stm

What a nightmare for payroll departments! Is the compensation going to be a one-off or continual. This whole tax rationalisation was meant to make things simpler.
#30
csiman
Working Tax Credit is for people who are employed or self-employed (either on their own or in a partnership), who [LIST]
[*] usually work 16 hours or more a week
[*] are paid for that work, and
[*] expect to work for at least 4 weeks[/LIST] and who are
[LIST]
[*] aged 16 or over and responsible for at least one child, or
[*] aged 16 or over and [URL="javascript:DoGlossary('disableddisability');"]disabled[/URL], or
[*] aged 25 or over and usually work at least 30 hours a week[/LIST]


My question is WHY is it 25 or over... why is 25 a magic age where you suddenly become worthy of free money?

Anyway... BREAKING NEWS on BBC News 24 is that the government has promised to compensate everyone that has lost money as a result of the abolishment of the 10p tax rate...

YIPPEEE!

Also here : http://news.bbc.co.uk/1/hi/uk_politics/7362283.stm
#31
csiman
What a nightmare for payroll departments! Is the compensation going to be a one-off or continual. This whole tax rationalisation was meant to make things simpler.


The BBC report said it would be through

changes to the winter fuel payment system, tax credits and the minimum wage in order to compensate those losing out from the ending of the 10p rate.
banned#32
MinstrelMan;1951273
Limited companies, pay yourself a directors fee then take the rest as dividends..... its the way forward (until HMRC try to move the goalposts again.

Unless you're unlucky and fall foul of IR35. Stung me big time :x
#33
dont forget to look at ni in all this! you lose more than 20p in the pound ya no its nearer 31p
banned#34
calmacuk;1951363
The BBC report said it would be through

:
changes to the winter fuel payment system, tax credits and the minimum wage in order to compensate those losing out from the ending of the 10p rate.


So employers will have to pay compensation by them upping the minumum wage? Not everyone qualifies for winter tax payments or tax credits. Strange.
banned#35
allstar2;1951380
dont forget to look at ni in all this! you lose more than 20p in the pound ya no its nearer 31p

Apparently taxation takes 39% of the average wage, up from 36.4% in 1997.
#36
According to the Beeb site, I will be £330 up this financial year, Woo hoo, makes a changes as the childless are usually penalised no end,
#37
Surprise surprise, my boss gets more money because of the tax changes and I get less
#38
The guy i work with done a simple spreadsheet and it worked out that £16,500 is the optimum and should pay the same as last year, not sure though, going to be well ****** if i lose out money in my pay slip, dont earn enough as it is. Lets overthrow the government. Bring on the Revolution
#39
Well I'll be about a grand better of next year apparently! But, remember that everything's going up in price so I'm going to need an extra grand to pay for everything, so I'm no better off anyway!
#40
the 10% was only applied to the first £2345 of your earnings above the personal allowance. That now goes up to 22% meaning instead of paying £23.45 in tax you will now pay £46.90. Nobody can pay any more than that because it only applied to that little part of your pay. Above the sum of £7780 ( personal and 10% band) you paid 22% in any case. So worst case scenario you are about £25 less well off, hardly a big chunk of money.

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