COVID-19: Those earning above £19.5k should pay more tax after pandemic to help fix UK finances, says think-tank

[RUNFAST11]

Your thoughts on this?

news.sky.com/story/covid-19-those-earning-above-19-5k-should-pay-more-tax-to-help-fix-finances-12130088

How should the debt be clawed back? What would you do if you were government to raise the money?

@itsadress

Maybe an increase in VAT on non essential goods would be one way?

A poster upthread mentioned luxury items, that's not a bad shout. Although I wonder how easy it is to administer n

The wealthy would find loopholes to avoid it. Wasn't it Lewis Hamilton who bought a private jet via Isle of Man to avoid paying VAT on it?

Increasing basic rate tax and reducing national insurance would be a very good way to generate tax revenue. It wouldn't hit "workers", but it would hit those living on investment income, i.e. pensions, buy to let, interest, foreign income, dividends, etc.

It would start to address the inequality of different people with different sources of income paying different taxes on the same level of income.

Everyone has benefited. What about all the extra money for the NHS? The PPE? The testing and now mass testing? Extra money for free school meals, rise in benefit payments, money to keep businesses afloat that you use, isolation payments, public services being bumped up. Everyone has benefited somehow from additional money spent. Everyone, including those on low incomes, needs to help pay ...

I agree, Racoonworld, though I do wish that "everyone" didn't include the cronies who've made quite so much out of the dodgy deals

It's interesting, though, to match up - and not just on here - those who are complaining about tax rises with the ones who shouted loudest for lockdown, furlough and all the rest
Oddly enough, they're often one and the same

If you've no income for whatever reason then no, you won't be paying tax will you.

If you do have an income then you're going to have to pay more whether you like it or not really. Can't see any political party acting differently.

DH and I are already getting a pay freeze because of the need to claw back some of the millions spent out on furloughing while we continued to work so my comments are likely fairly unprintable.

I understand the money has to come from somewhere, but there are plenty of other places that can be looked at first. Mandatory government purchasing contracts being one.

It would have been better for the Govt to provide loans to everyone affected by covid instead of furlough or SEISS grants or whatever. Use the student loan system. You only start paying back if your income is over a certain level, and if you havn't paid back after 30 years, the balance gets written off. That way, those who have benefitted from the support schemes pay it back at a relatively affordable rate over many years.

god no! What about me, and the other 3million plus excluded people from government financial assistance. No wage cover, no universal credit as we had small savings. No help towards bills or mortgage. I would rather leave the UK than pay for this mess. When I say there has been zero help, I mean zero.

isthatitnow How would you define “frontline”

Dare I come on here and say it......But are those who have been able to WFH suddenly getting a certain wrath? Doubled with being able to WFH and being over the threshold proposed by the Think Tank, it seems we are easy game at the moment.

I understand the money has to come from somewhere, but there are plenty of other places that can be looked at first. Mandatory government purchasing contracts being one.

Absolutely! Although that's a whole other thread...

@Kazzyhoward

It would have been better for the Govt to provide loans to everyone affected by covid instead of furlough or SEISS grants or whatever. Use the student loan system. You only start paying back if your income is over a certain level, and if you havn't paid back after 30 years, the balance gets written off. That way, those who have benefitted from the support schemes pay it back at a relatively affordable rate over many years.

@Kazzyhoward

LOANS?!

The government closed my place of work and I should take a loan for the pleasure?

Without furlough it would have just been business closures, mass redundancies and a crippled universal credit that would have been shown as completely unfit for purpose (which it is).

Bloody loans.

@Waxonwaxoff0

Excuse me? So some people on this thread think that because I was on furlough through no choice of my own that I should pay more tax even though I'm already on minumum wage which isn't enough to live on as it is?

Fuck off.

I certainly don't think this at all. I think we all have to pay extra taxes to claw this back - I'm a low earner on £21K but I also have a partner so we can manage - but I think it's going to be so hard for a lot of people but I don't think the furloughed should be punished.

Getting a level playing field Brexit deal would be a good start, duh, so that we don’t shoot ourselves in the head at the worst possible moment.

@Kazzyhoward

Increasing basic rate tax and reducing national insurance would be a very good way to generate tax revenue. It wouldn't hit "workers", but it would hit those living on investment income, i.e. pensions, buy to let, interest, foreign income, dividends, etc.

It would start to address the inequality of different people with different sources of income paying different taxes on the same level of income.

Sorry NO many pensioners only have a small private pension which on its own is under the threshold for tax, the only reason why they still pay tax is that their state pension is added for tax purposes, so in effect you want them to pay 4% extra tax on their state pension which as people like to point out is a state benefit and part of the welfare bill , people who work and claim benefits like tax credits and UC don't get their incomes combined for tax, people solely on benefits don't pay tax or ni, yet these are also state benefits and part of the welfare system, I am pretty sure if someone even suggested that these benefits should be taxed at 4% there would be an uproar, now as someone who will have her own private pension next year I totally understand why this will be subject to tax after all we get tax relief when paying in, but if we are going to have to pay the extra it should be on private pension alone and only when the private pension is above the tax threshold on its own

@scottish83

Targeting those who have benefited most from Government money would be a good place to start. So furloughed workers, restaurants who took part in eat out to help out, etc.

Those of us who have helped kept the country running (we aren't all key workers, though a lot of us support key worker activities) by working and paying taxes should be insulated from such debt repayments.

Furlough workers and restaurants pay tax you tool. You just sound bitter

I suspect that within a few years the state pension itself will be means tested as a result of this pandemic.

Ah yes, another furlough bashing thread.

Our system of taxation in this country doesn't work by saying well x took out y amount so they need to pay that back. Thank goodness!

What some really seem to struggle to understand was furlough was about trying to save jobs. If everyone who was furloughed was paid off instead the welfare cost would have been huge. And with considerably less taxpayers left to pay it. Which would have meant a big tax increase . The nhs, which was already struggling and is already underfunded would have really suffered due to lack of funds. People who think their jobs are safe may well have discovered that no job is safe if there is no tax money coming in to fund services.

Many firms had to furlough staff as the government shut them down. And many firms are struggling. The tax take in the next couple of years will be significantly less as many firms won't make a profit - so no tax from them.

Do we then expect these who claim benefits to have a higher tax rate to repay these? What about people who don't have kids - their taxes pay for education? What would that mean for healthcare? Would people want a "pay as you use" healthcare system instead of having centrally collected taxes fund it?

And what about the cost of designing and staffing a hugely difficult tax system to cope with all of these different scenarios?

I suspect that within a few years the state pension itself will be means tested as a result of this pandemic

It already is in Australia.

@tigger1001 don't bring logic into it.

What some really seem to struggle to understand was furlough was about trying to save jobs.

And in some ways to placate people, because you know lockdown & pandemic.

I suspect that within a few years the state pension itself will be means tested

Very possibly, yes; certainly the triple lock will go, and about time too

Granted it would be difficult politically, but I see no reason why seniors should be exempt from this - and that's from someone who's nearly at state retirement age myself

Benefits are means tested and so should state pension be, I’ve known a few very wealthy pensioners who just store the payments in bank accounts because they don’t need them.

@SirFlouncealot

Benefits are means tested and so should state pension be, I’ve known a few very wealthy pensioners who just store the payments in bank accounts because they don’t need them.

Reducing NIC and increasing income tax rates would be a start towards that. At the moment, people cry "I've paid my NIC all my life etc etc" to justify the state pension. If NIC is reduced, and maybe ultimately zeroised in a decade or two, people won't be able to say that, and it will break the thought process link between paying NIC and being entitled to state pension. Ultimately scrapping NIC and increasing income tax instead has to be a good thing as it equalises the "tax" paid by people with the same income, but from different sources.

Those of you suggesting people who were furlough Ed should pay for it should remember that furlough kept your hair salon/gym/nail bar/chiropodist /favourite cafe viable and those who work in industries that were forced to close off out of work benefits.

Lockdown would have been expensive, regardless, but furlough far less disruptive to all our lives than the alternative.

@PickAChew

Those of you suggesting people who were furlough Ed should pay for it should remember that furlough kept your hair salon/gym/nail bar/chiropodist /favourite cafe viable and those who work in industries that were forced to close off out of work benefits.

Lockdown would have been expensive, regardless, but furlough far less disruptive to all our lives than the alternative.

It didn't though. 3 million self employed were excluded from support, so many of them won't re-open, particularly those who didn't have their own premises so didn't get the business rates grant (i.e. room sharing, rent a room, rent a chair, etc etc).

That's the problem. Lots of people didn't get the state support, have lost their jobs/businesses, and yet, they'll still be expected to pay through higher taxes for all those who did benefit.

A lot fairer would be increasing business rates across the board so that businesses with premises (who got the business rates grant) pay more business rates in the future, say over 10 years, to pay some of it back.