This year's key tax changes
Feature
by Sam Barrett
INCOME TAX
Tax rates remain the same but there's an increase in the personal allowance from £6,475 to £7,475. There's also a reduction in the threshold for higher-rate tax (£35,001 down from £37,401).
Older people see smaller increases in their personal allowances: if you're between 65 and 74, it goes up from £9,490 to £9,940, and if you're 75+, up from £9,640 to £10,090.
NATIONAL INSURANCE
Rates are increasing in April. Employee and employer contributions increase by one percentage point, to 12% and 13.8% respectively. Additionally, the employee rate on earnings above the upper limit also increases from 1% to 2%. Self-employed people will also see an increase, from 8% to 9%, and from 1% to 2% for the upper level.
INHERITANCE TAX
The nil rate band is frozen at the amount introduced in 2009/10: £325,000.
BASIC STATE PENSION
The full basic state pension rises from £97.65 to £102.15 a week.
TAX CREDITS
Tax credits will be reduced for families earning over £40,000; low-income families will receive more child tax credit.
FUEL DUTY
A 0.76p per litre increase came into force in January 2011, with a further rise due in April.
I wish the government would just combine income tax with the NI. Then people would really get an idea what they are paying. Lets be hones the NI is not ring fenced for national and social costs it all goes into one great pot..
Be interesting to know if the monies paid to people who live entirely off the state (ie those who live on a variety of benefits)is GROSSED UP in order to work out the true value of those benefits and then determine whether they should lose the equivalent of their tax credits if the true value of their income is above £40K!
Exactly if the NI were spent solely on the intended items we could have a state pension of around £170, a good NHS and decent payments to welfare recipients. But no, like road tax, it is siphoined off into general expenditure.
Why do those under 65 years get an increased personal allowance of £1,000 and those over 65 only get an increased personal allowance of £450 and why was there no reference to the personal allowance for over 65's in the budget, only reference to the under 65's? Pensioners rely on their interest on savings to live on and the interest rates have been well below the cost of living.
ITS A DIGRACE THAT THE UNDER 65s PERSONAL TAX ALLOWANCE IS TO
INCREASE BY £1000 AND THE POOR OAP OVER 65s ARE ONLY GETTING
£450, I CANT SEE THEM GETTING ANYMORE OAP VOTES IN FUTURE
Because eventually they will make the two allowances the same - to the detriment of the over 65's.
They are not saying this as it does not look good but watch this space!
No! Until retirement it makes little difference whether they are combined or separate. Once retired, only income tax is payable and NI stops. Thishelps eke out the retirees much reduced income.
It's no wonder that some people prefer to live on benefits because all totalled up they are very often better off than alot of working people. This country is in a mess, and it needs sorting out.
There are too few creators of wealth and too many living off the backs of them. State created jobs should not pay any extra perks, holidays or pension privilages that the private sector can not afford to pay their employees. Things need to be done to bring a better balance to all working people.
I am against tax & NI being combined as this will complicate the situation for OAPs who do not pay NI. Also anyone in my position as I took early retirement at 50 & am now on Incapacity Benefit due to health problems. I still pay tax but not NI as I do not work - I used to work for HMRC & know that any sustem will become more complex if NI & tax are combined
Unfortunately combining Income Tax & NIC would hit Pensioners as they don't pay NIC but are subject to Income Tax on pensions about around £10k
The government has been going on about combining Income Tax and NI for ages. Its main objective appears to be to able to charge NI on interest on savings. As the main group who live off interest are the OAPs it would appear to be discriminatory. Let us see whether the European Courts will ensure that the Human Rights of OAPs are protected ( because most OAPs are too supine to stand up for themselves).
Time to protest to your MP!
There is certainly a problem wih benefits. I do know several people, in their 20's and 30's who live entirely off benefits, who claim to be acceptably comfortable, and who therefore say they have no intention of EVER working. i cannot understand the equation that allows many immigrants into the country to work, if every one means a job for a UK national disappears, and we then have to pay him/her benefits. This must negate any gain to the country from employing the foreign worker.
Surely we need to cut the benefits to a minimal subsistence level, one that encourages work, thereby filling the jobs locally and no longer needing to employ foreign labour. It may be said that UK residents don't have the skills required, but they would soon learn them if they felt they had to do so.
Then we might be able to provide more for those deserving pensioners.
And CEV, I agree entirely that state employees should be treated the same for pension payments as non state employees. Why did we allow Gordon to attack our pension funds without ensuring that state employees also suffered at the same time?