AIBU Income Tax rise.

It was yet another post devoid of any economic understanding sadly, with no grasp of the size of these expenses as a proportion of total public spending. More misdirection and hobby horses.

As set out in earlier posts, the figure I quoted (a saving of £80-90bn per year) is based on tapering away the state pension to reach zero only when the pensioner has an independent income at the PLSA “moderate retirement” income level.

This is uprated annually for inflation and based on robust research by Loughborough University along with actuaries and pension experts. The current level is £31,700 for an individual after tax and housing costs (i.e. disposable income just for bills and food) or £43,900 for a couple.

I don’t think anybody can argue that people with that level of disposable income require over £1000 of welfare per month. That’s £2,641 for a single pensioner or £3,658 for a couple left to spend after tax and housing costs. Such a means-testing and tapering system exists in Australia (who used to have a system based on ours but actually took appropriate actions to reform it) and it works very well.

https://www.retirementlivingstandards.org.uk/

It is a generous amount designed to cover the cost of a car, house maintenance, eating out regularly, foreign holidays every year, etc.

Note that after tax (assuming no contribution to their own pension at all and no student loan repayments) someone of working age earning the average full-time income of £37,500 per year has net pay of £2,453. From this, they must often pay very large housing costs which are likely to take up 30-50% of their net income, and in many cases they are also paying childcare which can be as much as a mortgage/ rent.

It’s simply not arguable that it’s necessary or reasonable to prevent necessary funding of schools, higher education, infrastructure and energy generation (lack of which is having a huge impact on the economy due to some of the highest energy prices in the world making our businesses uncompetitive) and industrial strategy so that we can give welfare to people with higher post-tax incomes than the post-tax earnings of the average full-time worker, who also has to pay for housing from this! These pensioners are perfectly capable of having a very comfortable standard of living without state welfare and to demand it, to the detriment of the other 85% of people in the UK, is egregious in the extreme. Removing this welfare from them would cause zero poverty and would provide the necessary funds to transform our economy.

Because there's no employee to pay the NI 🤷‍♀️

You too could become a landlord, take the risk and pay 'less tax pound for pound'. Or you could have the security of PAYE.

Same here. I’m homeless in terms of anybody I could cast a vote for, but I certainly don’t think self-immolation is the solution!

Landlording isn’t the safe bet many of you seem to think

I agree, very different landscape to the past. But no investment is a safe bet.

Landlording isn’t the safe bet many of you seem to think - it carries significant risks (house price rises arent inevitable, tenants don’t always pay or take care of your property) and carries a fair amount of responsibility above and beyond owning your own home might. As the risk/reward ratio shifts you see a drop in the number of people willing to make that investment and consequently a drop in supply/increase in prices for tenants.

it would take a pretty significant reduction in taxes / loosening of regulatory barriers for me to consider btl a better bet than stocks and shares.

Rachel Reeves and Starmer vowed not to raise taxes, but instead, they should have committed to Labour members giving up their salaries, perks, and properties to fund the gap.

This would raise billions?! 😆

No NIC on the rental profits though, so on a "Pound for pound" basis, someone earning from a rental property pays less tax than a worker. That's not right and it needs tackling.

Which is ridiculous, the worker should not be taxed more if you actually want to increase productivity

Why not advocate for politicians to give up their pay and benefits, end support for healthy, working-age individuals, discontinue state benefits and free services for illegal immigrants, eliminate free perks for prisoners, ensure that aristocrats contribute their fair share of taxes, reduce unnecessary public sector expenses, and promote smarter financial management across the board?

What support would you abolish for healthy working age individuals! And where can I get some of this support?

No NIC on the rental profits though, so on a "Pound for pound" basis, someone earning from a rental property pays less tax than a worker. That's not right and it needs tackling.

A lot of posters here seem to think we'll create a utopia if the government is just a bit meaner and more spiteful to anyone they perceive as richer than them.

You mean tax them more? Rental income is already taxed 🙄

It seems there's a lot of negativity directed at the middle class, upper middle class, pensioners, farmers, genuinely disabled individuals, and those over 50. The Mumsnet crowd sure knows how to take jabs at these groups. Some posters appear to want more and more money from these people purely based on personal vendetta.

Government spending is expected to keep rising, but tax revenue isn’t keeping pace. Taxing more won’t solve this; we need economic growth and substantial spending cuts.

Why not advocate for politicians to give up their pay and benefits, end support for healthy, working-age individuals, discontinue state benefits and free services for illegal immigrants, eliminate free perks for prisoners, ensure that aristocrats contribute their fair share of taxes, reduce unnecessary public sector expenses, and promote smarter financial management across the board?

Rachel Reeves and Starmer vowed not to raise taxes, but instead, they should have committed to Labour members giving up their salaries, perks, and properties to fund the gap.

The country urgently needs wealth creation and creators, with a strong private sector playing a vital role. It's important to inspire young people by offering opportunities to build wealth locally. Instead of stifling ambition or success, we should encourage it and support the risk-takers who drive businesses, innovation, and job growth. Building an environment that fosters wealth generation is absolutely essential.

Stop promoting the false idea that wealthy people are bad or that wealth itself is negative. Wealthy individuals make substantial contributions to state benefits, helping to ensure that those who depend on them can continue receiving the necessary support.

For us it’s our only home and the rental is to keep it occupied while we can’t. So the capital appreciation is because we own our home rather than BTL

i know a lot of people who move around for work so rent their home out for a few years and they are invariably good landlords. If my tenant has an issue I sort immediately because I don’t want my home to falling into disrepair (not that I wouldn’t anyway but the motivation is different)

it just feels like being a landlord is great if you are a big corporate or an unscrupulous landlord!!

The BTL mortgage is paid by the tenant. I rented my parents’ house for a short period. Obviously the house cost me nothing, the hassle was minimal and it appreciated during that time. Zero hard work, zero risk. It’s money for old rope.

To be fair to landlord, it’s hardly money for nothing though is it? They need to work to be able to afford a buy to let property or have enough income for a BTL mortgage in the first place. Plus there’s all the hassle and agro that comes with being a landlord. My MIL rented her house out once and has sworn never to do it again because of all the stress it brought her.

Land lording is an investment activity, the real profit comes from the appreciation of your asset. If you happen to make a profit from the rental income that's just a cherry on the money-for-nothing cake🍒

But this also punishes landlords who may have one or two properties rather than the big corporates

we Have a rental because we had to live area but we intend to move back when we can. It’s not about making money but more about not losing money!! We already pay a crazy amount of tax on that rental income

Are you a renter? Because research as shown that any extra taxes on landlords are passed directly on to tenants in the form of rent rises. Impose extra taxes on landlord and you impose extra taxes on tenants.

They'll just pass the cost on to renters.

Well said. Everyone needs to pay up.

They won’t do that though will they, because a lot of the MPs own buy-to-let properties.

Tax the Buy-To-Let sector monthly rent Scumbags

@Bluegrassdfly they always find a way to tax people though, no matter how tough. Where there is a will, there is a way. I am sure it's not that easy to tax them but I am also sure that it can be done. For example, in America, some of these multinationals get tax rebates in the states where they pay no taxes! How is that even possible but it is! If they can't tax them on everything, then they should find a way of increasing their taxes on something just like they do with people. Why should millions of people who earn nowhere near corporate billions pay more and more tax to plug holes in public finances? I don't frankly believe all these stories that tell us it's hard to do or impossible to do. It's just a nice fairytale that I am sure is fully supported by corporate lobbyists who seem to have every government in their deep pockets. How hard can it be to calculate how much money, say, Amazon makes in the UK? Why do we need to care how much they make in France, Germany, Italy etc? We don't. Just pay full taxes on what you make in the UK and find a way to account for your costs that may have occurred elsewhere and the burden for doing that should be on them, not on the government.

You haven’t heard about Pillar 2 changes then?

Raising taxes on multinationals is not something the UK can do as a standalone entity. It needs to work with other countries to change this. It has been working hard to do so. But guess what? Corporation isn’t a large part of our - or any other country’s - tax system. People seem to think this is the answer to our black hole. It isn’t. Rising income tax, NICs or VAT is.