Tax Increases after Corona

[lemongrassmartini2021]

Anyone have any ideas what tax changes we might see post Corona. Increase in income tax? Inheritance tax? VAT? Corporation tax? Stamp Duty?

Obviously no one knows until there is a budget announcement but just wondered what people thought.

I think that the fact that our PM is essentially a man who has undergone a Damascene conversion, i.e. he's not the same man who led the Tories to victory, will force an election sooner rather than later.

Why would that be ?

As we know - from Labour and Tory governments, a change of PM is not a reason for an election.

We need something that also includes the wealthiest pensioners paying a fair share rather than young families. At the moment there is a certain very well off demographic group who are enjoying self isolating with no impact on their income or risk to losing their homes etc.

We are doing this mainly for their health i.e. the ones at risk by age but actually fit enough to spend the time gardening in their large homes, cooking expensive meals and drinking cocktails late afternoon ... whilst commenting negatively about anyone trying to go out to work.

How do we specifically make sure they contribute a fair share?

Sadly with globalisation our expectations for a standard of living is unsustainably high.

We expect to be able to live as a nuclear family in our own homes rather than the working class (which is most) living in extended families, sharing bedrooms and property may be owned but handed down through the family.

The higher standard of living that was had before property and rentals became unaffordable was the economic blip. We are back to the reality that the working class, work hard, gain little and don't get to retire...

We need something that also includes the wealthiest pensioners paying a fair share rather than young families.

Well we had our chance in 2019, and know the answer.

So what's plan B ?

Not corporation taxes as i doubt Tory have the political will to do that (and also companies provide jobs)

Corporation tax is paid on net profits so that shouldn’t affect jobs. It’s been reduced by 7% over the last few years so raising it would be a good call.

Pensioners pay tax just like everyone else @Thatisnottwometres. And lockdown isn’t to protect pensioners, wealthy or otherwise. It’s to reduce pressure on the NHS.

Furlough pay - some of that is already been taken back in tax Before it goes to the person so it’s not as much money going out as it seems - also PAYE is still being paid! On it!

Council tax is still being paid by everyone it’s not been scrapped ?

The redid the budget to incorporate this so it’s not going to be as bad as your all saying I don’t think!

The triple lock has got to go, surely.

I would raise the age for the winter fuel allowance significantly and I would include in the mechanism some very easy way in which richer recipients could refuse it/return it straight to the Treasury, so to speak.

I would like to see tax hikes on alcohol, cigarettes and air travel, punitive council tax on second (holiday) homes, a small rise to the higher income tax rates, and changes to inheritance tax.

I would not like to see rises in VAT or the lowest tax rate because these hit poorer people harder.

I would like to see some kind of universal basic income pilot scheme! (Wishful thinking). My scheme would include compulsory pension saving.

I think NIC will be extended to cover a lot more forms of income, such as occupational pensions, dividends, property rental income, etc. For far too long the NIC burden has been only on "workers" and not on other forms of income, such as investment income. It's one area that's been left untouched by both Labour and Tory governments, so that's a lot of people who've not suffered the same tax increases as workers.

Inevitable that there'll be a few percent added on to all taxes, IT, IHT, CGT, Corporation tax, VAT, stamp duty, alcohol/tobacco/fuel duties - the lot really. A couple of percent on all taxes spreads the burden more fairly.

Pretty sure there'll be no annual increases in exemptions/allowances for many years, such as personal allowance etc.

No point in faffing around with tax rises that only affect a small minority of people - it wouldn't bring in enough revenue for the effort involved - we need tax rises for the majority to bring in anywhere near enough revenue.

Boomers need to start coughing up. Why should the young (and that includes people who aren't even historically "young") get shafted again.

People think the basic rate of tax is too low?!

Compared with other countries and compared with historic UK rates, it is low.

Boomers need to start coughing up. Why should the young (and that includes people who aren't even historically "young") get shafted again.

NIC on occupational pensions addresses that. There are pensioners with, say £50k of pension income, only paying 20% income tax. A worker earning £50k is also paying 12% NIC, 9% student loan, 5?% workplace pension - workers can't be hit again - they've been hit time and time again over the past 20 years - enough is enough.

People think the basic rate of tax is too low?!

It’s not that long ago it was 25%

workers can't be hit again - they've been hit time and time again over the past 20 years - enough is enough.

I agree, though I think a little more could be squeezed out of higher rate taxpayers.

There are pensioners with, say £50k of pension income, only paying 20% income tax

Your point is? Same as any other earnings.

what nasty ageist comments on here especially with regard to 'boomers'
My income including my state pension is £13k a year - £4K of that is a small annuity which I paid for myself and which is subject to investment so likely to fall.
My state pension went up by the 'so-called generous triple lock' in April so I now get an extra £5 per month - guess what - my council tax has gone up by more than that.

As I am tired of saying - 2.5% of not much is not much. Because there are a lot of pensioners it seems as if it is a massive amount but each individual pensioner gets very little extra
Single pensioner households are amongst the poorest in the country.
Not all of us have lovely index linked pensions and live as a well-heeled couple in a big house.
My thoughts
IHT should be 25% of the entire inheritance - get rid of the loophole that a married couple can leave £1m without paying any tax. This would redistribute housing wealth.
And as others have said but it bears being repeated - the pensioners are not being protected by lockdown as so many seem to think. We were being 'asked' to stay home to protect the NHS and many of us have had minor operations cancelled and regular clinics closed.

@joycetemplesavage did you honestly just snip part of the post to make it read completely differently to the point of the post? Read past the full stop and you will see @user1497207191 point!

I agree, though I think a little more could be squeezed out of higher rate taxpayers.

Depends how it's done. We really don't want another fiasco where the likes of GPs, dentists etc reduce their working hours to avoid the whopping 62% marginal tax rate on earnings between £100k-£125k. That kind of stupidity from HMRC/Treasury does far more harm than good. We need people with half a brain making tax policy to avoid that kind of monumental foul up.

many of us have had minor operations cancelled and regular clinics closed.

People of all ages are suffering NHS service closures, not just pensioners.

It could be paid for quite easily as it's going to cost far less than it cost to bail out the banks, if I were chancellor:

1. Equalise capital gains to income tax levels
2. Raise Corp tax towards 28%
3. City transaction tax of 0.4%
4. Point of consumption tax on multinationals and tech firms
5. Wealth taxes of 1-2 %pa (not including 1st home and pension) on assets above £1m
6. Raising inheritance tax to 60% and lowering threshold

Also include some some long term (50-100 year) bond financing and large infrastructure spending to get the economy moving to grow the GDP and effectively grow the debt away.

I expect with a Tory government though they'll use the instruments that will hit the poor and middle earners - austerity, vat/income and national insurance increases.

@ACCD6 I agree re scrapping hs2. The world has just discovered how it’s easier than thought to work from home and hold meetings via zoom. Who needs to get to London 20 mins quicker.

@Jojo19834

NICs have already been paid on the income earned to create the pensions

Tax has already been paid etc etc

Pensions do not materialise out of thin air

Anyone with a £50k pension has paid significant NICs throughout the working life. Now they take the pension arising from that? Yes let’s tax them again.

Almost as if we all won’t be pensioners one day

And where to start with the comment on paying for one’s own workplace pension like that’s an unfair tax

Makes me laugh that ANY financial implication to pensioners always results in people crying "people are so ageist on MN/everywhere" - I'm sorry, why should young people and families continue to be shafted.

I know there are some pensioners in poverty, but there are many with large amounts of property wealth and very healthy final salary occupational pensions - both of which are a dream to many younger people.

There won't be another bout of austerity. What they want and need to get out of this next recession is for people to spend, spend, spend.

David Davis, the former Brexit secretary, agrees that the approach should be to pay off the debt accumulated during the crisis over time. “I would be happy to see it paid off over 50 years,” he says, adding that there is no appetite in the Conservative party for a repeat of Osborne’s austerity regime.

“I think the way forward is one part [Franklin] Roosevelt’s new deal, one part Ronald Reagan’s deficit financing, and one part a new Bretton Woods to get international trade going again. Austerity would launch the economy into so many brick walls it would be hard to list them all. It’s a bonkers idea.”