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.

There was a suggestion in the ST by one writer today along the lines of scrapping defined benefit pension schemes for civil servants and MP’s like most companies have done in the private sector.

Personally I don’t think they will do anything for the next year or two.

I doubt that the tax threshold will reduce. To do that has to go through so many obstacles, plus it goes back on the promises that were made in previous budgets.

I think NI contributions will rise. From 9% to around 12%.

Also think a gradual increase in tax will happen over the next few years. From 20% to 22% to 24% etc, capped at around 26-27%. For the 40% earners, this will remain the same - no higher than 40%.

I also think that once the new rates are introduced, they won’t be lowered for many many years.

Business rates will go up. Private investors and owners will hike prices. Food costs will rise accordingly. Wages and income will freeze. Property prices will stagnate, but rents will go up as mortgage interest rates rise.

Savings interest will stay low - around 0.015 % while credit card and loan interests will rise 2-3 %.

It’s interesting the conservatives and promised to Not increase vat, income tax or vat in their manifesto. Will the average Tory voter get that is not relevant now or still scream “but you promised” even in the face of a pandemic or get that things kind of change. I guess the former myself people’s reaction to the furlough scheme and the sheer ridiculousness of people who don’t go to work when the government (and Mumsnet) has told them not to work!! Really I know from here every waitress is now lazy and hasn’t being paying tax ever have they?!

Seriously a rise on income tax would be a sensible answer in reality they will try to “cut” their way out of it!!

I think NI contributions will rise. From 9% to around 12%.

Umm, NI is mostly at 12%? Where's the 9% rate coming from?

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

A pensioner on £50k pays income tax on everything above £12.5k. NIC is taken before tax, so a pensioner is already paying 20% on that instead of 12%. Why would student loans even come into it? None of today’s pensioners are young enough to have one.

The tax take for the treasury and GDP (not project fear but the governments own projections) was due to plummet over the next few years anyway as a result of Brexit.

I wonder what the UK will look like by the end of the decade with these two events. I suspect we will drop out of the G7 and will certainly be a much poorer country.

Nikhedonia

It’s around 9% on overall earnings. For example, for £1000 you’ll pay around £94.

For every £1000 you earn I think we will end up paying around £120

It’s around 9% on overall earnings

Who's overall earnings?

Hopefully they'll get around to taxing those loophole exploiting billionaires and millionaires but I doubt it.

What?

The class 1 NIC rate is 12% from the PT to the UEL then it's 2% thereafter. Not sure where you are getting 9% from...

Confiscate all inherited wealth on the death of the inheritor.

Mockers
So for example large houses that are open to the public will have to be sold along with their art collections and in all likelihood much of the art will go abroad.
What about farms which have been in the same ownership for several generations?

Council tax needs to rise. It funds social care and education, and the Government of the day is safe in that it can blame lots of councils which are in control of opposition parties.

NIC is taken before tax

No it's not.

there is no appetite in the Conservative party for a repeat of Osborne’s austerity regime.

Labour were also standing on a policy of severe spending cuts at the time too!

Pension relief will go for 40% taxpayers, will be equalised to the 20% rate, this has been ripe for change for years. Fake self employment will be addressed, this was well underway before the pandemic. Capital gains tax on main residence may be applied, this one would be the biggest revenue raiser.
Tax on earned income will probably be left alone, money needs to be spent by consumers, we have a service economy. It is assets that will be clobbered, particularly housing, it is very illiquid and the Qe since the 08 banking crash has inflated values to unsustainable levels, totally unearned.

I’ve just explained it.

Yes there is a threshold - ie the first £180 or so is exempt and the 9% rate kicks in after this.

In real terms this means that for every £1000 anyone earns, they’ll pay around £94 in NI.

That figure amounts to around 9% overall. Ie, we currently pay around 9 pence in every pound we earn, taking the threshold into account.

This overall percentage figure will increase - ie the amount we pay for every £1 we earn will increase.

A pensioner on £50k pays income tax on everything above £12.5k. NIC is taken before tax, so a pensioner is already paying 20% on that instead of 12%. Why would student loans even come into it? None of today’s pensioners are young enough to have one.

NIC isn't taken before tax. And isn't paid on pension income.

The poster was referring to someone who is on a 50k salary who will pay both Income Tax NIC whereas the pensioner is only paying Income Tax.

I’ve just explained it.

the explanation is wrong... but ok.

Actually your comprehension of what I’m saying is wrong, but ok...

What is 94 out of 1000 as a percentage?

Go on...

Going into lockdown we were “all in it together”, but deciding how we pay the enormous bill will divide us completely.

You've invented a 9% NIC rate...

If you mean effective rate due to the bandings, the example salary you are basing it on would be the answer the question I asked up thread "based on who's earnings"

Fake self employment will be addressed

Good luck with that. They've been trying to sort it for 25 years and it's grown throughout that time. The treasury/HMRC havn't the competence to solve it - they just keep bringing in one stupid "solution" after another - they're re-arranging the deckchairs on the Titanic. It's actually very simple - they need to change the underlying employment law, but they're frightened of doing that - they're just nipping around the edges instead hoping to grind people down by stealth.