To ask how much you think income tax will rise by?

[Wonderofwimbledon]

We’re absolutely financially at our limit… I’m so incredibly stressed. An income tax rise will break us and we won’t be able to afford it. We won’t have money to eat.

What do you think it’ll be? I just want to curl up and cry- we can’t take anymore increases our bills , mortgage everything has increased we have no spare money at all

It’s hugely stressful, all the rumour and speculation.

Unemployment figures are lowish that’s not the issue

Someone posted this on another thread, it shows why it can be low but out of work still an issue

It's complicated because it comes out after Corporation Tax which is 25%. First £2k above the Personal Allowance is tax-free, then 7.5%, 32.5% and 38.1% at the income tax thresholds. Taking Corporation Tax into consideration, the rates are roughly 25%, 30%, 50% and 54%

We need a wealth tax really. The ultrarich have a nifty way of avoiding paying CGT by not liquidating their assets - when they need money to spend they borrow it. We should levy a 1% annual tax on real estate and stock holdings that sum to more than £10m.

CT is 19% for a smaller SME below a threshold. And it starts at £1 profit so you need a dividend tax to reflect that.

There’s no way you can increase dividend tax without killing start ups, tiny SMEs and anyone trying to build something. It’s such a misunderstanding it would destroy job creation.

Trying to define a "working person" to a salary is utter bullshit.

Those on more than £45k have adjusted their lives as such. Taken out a bigger mortgage, had another kid, taken out a second car...

Just because you EARN more doesnt mean tou HAVE more at the end of the month.

The middle - say £50k-100k earners will once again be absolutely stung. They will be going out to eat less, going shopping less, buying less... which won't help the economy.

I earn £70-DP £35k - although hes just been made redundant so our house hold income right now is £70k.

We have a 3 bed end of terrace. Mortgage is through the roof, childcare is crippling even WITH free hours because the "extras" just creep up... bills are mental... we dont live a life of luxury. We manage our bills and maybe 1 meal or an activity out a week and there isnt a lot left.

We will all need to pay more tax - pretty much thats a given but just chucking it on everyone who earns over their made up salary of "wealth" isnt the answer...

Folk have enough to do supporting themselves and their own families without carrying half the country on benefits.

I was listening to a podcast that was lamenting all of the hint dropping (opinion polling) that is going on.

If the floated rise goes ahead I read I would be about £900 worse off. It will negate any salary rise I’m likely to get. So it will possibly be a ‘no change’ situation.

It certainly won’t put us on the breadline but will have some impact.

I feel for anyone who has no slack in their budgets.

I also don’t think “immigrants” are the cause of the problem, if you compare the cost of illegal immigrants to the health budget it’s less than 1%. And the NHS would collapse without immigrants who work in it.

A person on minimum wage would only earn around 22k though, surely you know that

What worries me is - RR brings in significant tax rises, and very little changes.

And then she comes again, for more.

Where will it end?

I don't think that's right for the figures you've given.

£12.5k profit assumes a pre-tax profit of £15,432.

If you took a salary, you personally would end up with £7,866 after tax and NI and the company would have £514 left in the bank.

With dividends you personally end up with £8,281.

There would be £0 left in the company, so overall (personally and company wise) you actually pay about £100 more in tax but personally you are just over £400 better off after tax with Dividends.

Given your higher rate tax payer status from another income you could avoid tax altogether by putting all £15k into a pension as an employer contribution.

Also - VAT is paid by the customer and is no way a 110% tax on your profits. You are simply acting as a collection agent for HMRC.

If half the country wasn’t on PIP we might not have to raise income tax at all.

Corporation tax is paid by the company and dividend tax is paid by the individual and it is not as simple as combining them because it depends on salary vs dividends and pension contributions.

Also your dividend figures are out of date. The £2000 allowance was reduced to £500 and it is 8.75% for basic rate payers, 33.5% for higher rate and 39.35% for additional rate

About 8-10% of the population claim PIP.

And around 17% of those people work and pay tax!

Good argument for means testing it then. Sorry I have a chronic condition which disables me quite a bit, I’m out of pocket due to it. Had to buy an automatic car, spend hundreds every year , probably well over 1k on physiotherapy and osteopath. On bad days I can’t walk, dh has to help me get dressed some days. Someone at work has the same condition, she claims. She’s on 60k a year. She’s not struggling financially. Apart from having a cleaner she has no extra costs involved in her condition. Shed probably have a cleaner anyway 🤷‍♀️

im not saying that people on less money shouldn’t get PIP if they’re working. Some will absolutely need it. I think there needs to be a more thoughtful distribution so people in need get it/potentially get more!

someone else I know gets carers allowance for looking after her dh. He gets carers allowance for looking after her. Neither work. How can it be right that both are so ill they need a carer, but they are well enough to care for the other person but not themselves? Seems a pisstake to me.

@EasternStandard but I replied to a post saying people can't get jobs. Your graph tells me nothing about that?

It’s gone up from 4.1% last year to 4.8% currently and rising quickly. For 16-25 yos it’s over 14% from 12% last year.

So small numbers then @OnlyOnAFriday & how many of those people are trying to get jobs?

You do understand that the growth in out of work UC doesn't mean that the number of people out of work has increased though don't you?

For whatever reason @BloominNora people can't understand this 🤷🏻‍♀️

That’s really the response to that chart?

Small numbers but a big ratio. I’m rubbish at maths but 4.1% to 4.8% is around a 20% increase? Seeing as there’s currently 1.7million unemployed that’s been an increase of hundreds of thousands of people.

I’ve no idea how many of those are looking for work. The stats don’t appear to report that.

That post by @BloominNoraaside there are other factors in the labour market. Pay roll is down and graduate jobs are down.

These will add to the feeling that people can’t get jobs.

Plus when people give up trying they are no longer unemployed. They are out of work.

I’ve no idea how many of those are looking for work.

Which is why it's an odd thing to state people can't get jobs & that's what has fucked the economy...

That’s really the response to that chart?

@EasternStandard what should the response be?

Unemployment figures are different to universal credit figures & economically inactive figures. It's important to understand what you are referencing. I mean I don't think I should have to explain that but as I said 🤷🏻‍♀️

Well yeh as I said a few times. They’re different categories. That chart still shows an increasing problem and high number of out of work UC.

It’s very possible that my calculations are off - I haven’t taken dividends for years and I completely forgot about NI.

Im not wrong about VAT though. You pay VAT on turnover, not on profits. I have very little profit after Brexit, covid, Truss, Russia, conservative increase in VAT, labour increases in min wage and employers NI, the CoL meaning the industry won’t support further price increases and and spending is down. Some hospitality pays zero VAT (under about £95k declared turnover - why??) some is on flat rate of 12.5% with declared turnover up to £230k, and I am 20% so I’m immediately competing against people paying much less. I’m also competing in a batshit system where the same food in different outlets is different rates depending on temperature (hard stare at Greggs). I can claim back VAT spent but it’s pennies when you are mostly buying zero rated goods and selling them at standard rate. Take my turnover, take away the stock price (food inflation plus my suppliers passing on the min wage increases and NI increases, cooking oil and fish very badly affected by Russia), take away mortgage, bounce back loan, a very necessary business loan that we would have folded without (all increased since Truss), utilities (astronomical since Russia), wages (up under labour), NI (up under labour), delivery fees, a few other bits and pieces like insurance, maintenance, compliance, training, accountancy fees, and you are left with the profit. But now I have a VAT bill that is based on turnover and my turnover is nice and healthy. My profit, however, is less than the VAT bill. It’s not as simple as saying “you are simply (unpaid) collection agents” - realistically to stay open you have to compete with zero rated supermarkets and the “cash is king” and “card machine is broken, love” and the people who shut down and start up the same business in different names over and over again tax dodgers that HMRC has no interest in stopping. The market sets the price - not the actual cost. 6000 hospitality businesses folded in 2023 and one in three hospitality businesses are currently running at a loss - of course lots of those are paying more in VAT than they are taking in profit - Premises, wages, utilities and stock all have to be paid for and none of them are cheaper now than they were a few years ago but people don’t have more money to spend. It’s actually wild to me that I used to take dividends every year - I’m not even taking a wage now and have an extra job to try and keep everything afloat. Meanwhile I get told what a rip off it all is as it cost 75p in 1994 and Tesco is cheaper (of course it is! It’s shit and they aren’t taxed on it!)