Income tax - top 45% rate scrapped! Bonkers!

[HoppingKangaroo]

The 45% top rate of tax (which currently applies on earnings above £150,000) will be scrapped entirely. How will this help the economy? It will just add to the government debt and it just helps out the very weathly.
Why not have more help for the poorest in the country and not have tax cuts for the very wealthy.

The Govt recalculated the number of higher earners, in other words Osbourne used statistics to make it appear there was more tax take under his 45% rate than under the previous 50% rate.

HM Revenue & Customs data say that people earning more than £150,000 paid £10bn more in tax than previously thought in the three years the 50p rate was being charged
However, Treasury officials argue that the £10bn extra was not due to the tax rate being set at 50p. They say the new figure came because more people were earning higher salaries in that period than previously thought, so there were more high salaries on which the 45p rate could be levied

So no not talking sense at all, rarely does.

It is ironic that the Tories are desperately trying to make London an attractive financial centre again, given the immense harm they did to it via Brexit...

For those saying it rewards success why shouldn't it reward hard work, which tbf is usually the lower paid. In any business the work is done by the lower levels whilst the higher up the ranks you go the more money you make from If he people's hard work.

@TooBigForMyBoots

"They're not using taxpayer's money, that would be bad enough. They're borrowing money to make the rich richer."

+++

An accurate and simple summary but bloody scary and depressing.

Borrowed money that will be a burden on our children's futures through higher taxes and lower services.

Yabu to ask "why".The current leadership of the Tory party have made no secret of their core ideology - low tax for the rich, scrapping workers rights, cutting public services and slasing consumer protections. They (Truss Kwarteng and Raab) wrote a book about it years ago.
Brexit was all part of it and here we are with them in charge. This should be no surprise to anyone - it's literally what people voted for!

They are abolishing the additional rate of tax. That's the 45% bracket.

the 45% rate doesn’t affect me or my DH but we are higher earners and are not really struggling. I have never felt so angry about a budget before.

i don’t really mind the removal of the 45% rare IF they had also helped the poorest in society but they haven’t.

also the nonsense about helping business is laughable. If they really wanted to help they could have reduced employers NI.

also someone on 150k is not moving abroad to avoid uk tax. It is the mega rich. They certainly aren’t now moving back to the U.K for a 5% tax saving.

a lot of rich people don’t even pay 45%, they actually receive income in dividends which is taxed differently. Or it is taxed within companies or trusts.

@ImaDanishPastry I believe that Denmark and Finland are consistently rated in the top 20 happiest countries in the world.

Finland is going to have eradicated homelessness in a few years too, by all accounts.

You clearly haven't read enough, then. They have scrapped the top rate.

It was actually a £7.6 billion loss after underpayment errors and recoveries were taking into account.

No small change I agree but, when you compare that to the £34 billion (HMRC estimate) - £122 billion (Tax Research UK) gap between expected tax revenue and revenue collected, a gapexists due to tax evasion, avoidance, and fraud, you have to ask yourself why the focus is pushed towards benefits? (And I think we can all hazard a guess as to why that is).

Well Liz Truss earns £164k, so she's basically just using her position to hand herself back money.

That would be why she looked like the cat that swallowed the cream this morning.

No small change I agree but, when you compare that to the £34 billion (HMRC estimate) - £122 billion (Tax Research UK) gap between expected tax revenue and revenue collected, a gapexists due to tax evasion, avoidance, and fraud, you have to ask yourself why the focus is pushed towards benefits? (And I think we can all hazard a guess as to why that is).

The only thing I'd say about how those gap numbers are calculated is they are often balls and manage to ignore international tax rules and simple principles like the commercial requirement to pay interest on debt and royalties on intellectual property you don't own.

As a corporate its actually terrifically hard to meaningfully minimise your tax bill these days.

We decided to leave anyway. The resentment of successful people is toxic in this country. I do not want my children to be facing reverse snobbery at university amongst other things.

Will they though….I wish I could be hopeful.

I worked it out by calculating that we will have 5% more income so we will have an additional £40k per year. In London our income only gives us a mortgage for a £2 m house and it seems ridiculous but if you look at how many houses / flats cost that much in London it’s not as odd as it seems.

Something people don’t understand is how capping banker’s bonuses didn’t lead to lower bankers’ salaries. It led to the banks increasing base salaries for people they wanted to retain so that their total comp was the same with smaller bonuses.

@DameHelena yes I've read about Finland's 'housing first' approach to homelessness.

Bless.

Nobody resents you for being successful. They might judge you for other reasons.

Both DH and I fall into this income bracket.
Financially we were always going to be better off under a Conservative government but we have always voted Labour.

However, this is what the majority voted for.

I think the conservatives will win the next election.
I have often laid out why. I understand why others don't agree with me.
I've never voted for them myself.
Lots of people still believe they are better with the economy.

Lots of people still believe they are better with the economy.

Not any more, they blew that myth to kingdom come this morning.

I worked it out by calculating that we will have 5% more income so we will have an additional £40k per year. In London our income only gives us a mortgage for a £2 m house and it seems ridiculous but if you look at how many houses / flats cost that much in London it’s not as odd as it seems.

If 5% of your income is 40k, your total income must be around 800 k. You should be able to get a mortgage for significantly more than £2 million if you are on PAYE and have, say, 400 k as a deposit. Where is your income going?

Yes Mrs Bennets I bet that the people judging without knowing the circumstances may be the ones getting covered by the huge chunk of taxes we have paid for years. Plus also the state school places we do not use. Your lost. I care very little anymore. We can move so hasta la vista!

Will it make more doctors work more hours as they're not getting so penalised on tax?