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

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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?

If they started collecting all the taxes that are actually due properly that might be a start

www.independent.co.uk/voices/hmrc-tax-gap-avoidance-billions-pounds-a8968591.html

Deal with mis-spending, corruption and beaurocratic waste...

Yet once again we have those earning sod all arguing with those who can't earn anything as to who should pay...

@youkiddingme

If they started collecting all the taxes that are actually due properly that might be a start

www.independent.co.uk/voices/hmrc-tax-gap-avoidance-billions-pounds-a8968591.html

Deal with mis-spending, corruption and beaurocratic waste...

Yet once again we have those earning sod all arguing with those who can't earn anything as to who should pay...

The biggest component of the "tax gap" is the black economy, i.e. a huge number of people engaging in relatively small scale tax evasion, such as selling duty free booze and cigarettes, unregistered car boot traders, "cash in hand" or back pocket workers, unregistered tradesmen, VAT avoiders, etc. Basically, the people around us, our friends and neighbours. They individually may not be evading huge amounts, but a huge number of people evading small amounts adds up to a huge number!

An increase in the corporation tax rate for the current tax year would ensure that those companies who unnecessarily furloughed staff and made a large profit in part repay the furlough costs, while companies who struggled won't be as affected.

The increases are always talked about in terms of individuals, while the corporation tax rates have been falling for years.

The danger of increasing corporation tax combined with brexit will just push companies to Europe.

But I do agree with it in theory, it’s just shot timing.

I’ve been paying national insurance contributions for years with the purpose of drawing a pension. You can’t just suddenly say it’s going to be means tested. You could start from a certain date I guess but but you would have to reform the payments. My statement tells me exactly how much I will get, how much I need to pay in and when I’ll be able to draw it. I expect the pension age will change but it can’t suddenly be made means tested. Everyone would just draw their full lump sums out of their private pensions to decrease earnings anyway

I’ve been utterly done over by the self-employed safety net - not received a penny because of when I went self-employed - so absolutely fucked off at the prospect of higher taxes.

@pleaseChooseAnother

An increase in the corporation tax rate for the current tax year would ensure that those companies who unnecessarily furloughed staff and made a large profit in part repay the furlough costs, while companies who struggled won't be as affected.

The increases are always talked about in terms of individuals, while the corporation tax rates have been falling for years.

Unfortunately, we had to reduce CT rates to be competitive with other European countries. Many larger firms moved their head offices to Ireland to benefit from Irish low corporation tax rates. It's also the reason there are so many firms based in Isle of Man, Switzerland, etc.

The UK has actually benefitted from higher CT revenues as the rates have lowered over the years suggesting firms are relocating to the UK or at least staying in the UK.

It's not a Tory thing either, Gordon Brown had a zero percent corporation tax rate on the first £10,000 of profits, so to some extent, that was the reason lots of the smallest businesses converted from being sole traders into limited companies!

@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.

Exactly!

@BungleandGeorge

I’ve been paying national insurance contributions for years with the purpose of drawing a pension. You can’t just suddenly say it’s going to be means tested. You could start from a certain date I guess but but you would have to reform the payments. My statement tells me exactly how much I will get, how much I need to pay in and when I’ll be able to draw it. I expect the pension age will change but it can’t suddenly be made means tested. Everyone would just draw their full lump sums out of their private pensions to decrease earnings anyway

Yes this. State pension can’t just be cut off for most people, people have made retirement plans based on it. Otherwise I’m stopping paying into national insurance and paying more into my private pension instead!

State pension can’t just be cut off for most people, people have made retirement plans based on it. Otherwise I’m stopping paying into national insurance and paying more into my private pension instead!

They won't cut it off just move it. For me is now 68 & you need 35 years of NI contributions to get the full SP.

I've paid it since 17 but doubt I can opt out of NI payments at 52.

@itsadress

I've paid it since 17 but doubt I can opt out of NI payments at 52.

Nope you cant I had paid in for 46 years before the new pension rules, when I get mine in 2021 (if I take it) it means that I will have paid in for 51 years, therefore I will have paid NI for 5 years without it going towards my pension

And I'm pretty sure the age I receive it will move again. But I'm not paying for my pension, I'm paying for the generations before me. Let's hope there the money for mine!

I think the state pension will be means tested for eg everyone currently under say 45 - counting from a couple of years time, after extended consultation. This allows enough time for people to prepare.

Not saying this is right, just that it is the kind of change that is likely. It’s pretty explosive though, with 2024 election so who knows.

Why are people still saying they paid NI for "their" pension when it doesn't work that way?

It's true that years of contributions are needed to be paid at all, but state pension were never pre-funded - so those still working effectively pay for today's retired, just as the next generation down will pay for theirs

£19.5k is fuck all, people who earn that can’t afford to have even more taken off them. I had to double check to make sure you hadn’t written £195k.

We haven’t benefitted from a single penny of the money that’s been borrowed for all this, so why should we pay it all back??

£19.5k is fuck all, people who earn that can’t afford to have even more taken off them.
£19.5K is the point at which you would switch from paying less due to less NI, to paying more, do those on £19.5K should pay the same as now. I'm on barely over that as a single parent but there will be couples on £19.5K each. I wouldn't have a problem with it myself, people on low incomes will be better off which is great!

@Puzzledandpissedoff

Why are people still saying they paid NI for "their" pension when it doesn't work that way? It's true that years of contributions are needed to be paid at all, but state pension were never pre-funded - so those still working effectively pay for today's retired, just as the next generation down will pay for theirs

One of my pensions works that way too, they still have an obligation to pay me it in line with what my statement says! Log into hmrc it gives you a statement of your benefits for the state pension. I don’t believe that can just be removed. And how are you proposing to means test it? It’s not in govs interests to disincentivize private pensions. I expect the Triple lock will go and the age will rise again. It’s not particularly fair for state pensions to consistently rise above inflation and employment income anyway

All of that's quite true, BungleandGeorge; however I wasn't referring to whether pensions should be paid at all, but who's actually paying for them at the time

Of course it can't suddenly be snatched away - or at least not for anyone remotely near pension age - but I agree the triple lock and starting age will change. Politically difficult perhaps, but I can't see any good reason why pensioners should be exempt from all this

Let them spend less on defence and on shoring up their mates bank accounts. That should raise plenty.

State pension can’t just be cut off for most people, people have made retirement plans based on it. Otherwise I’m stopping paying into national insurance and paying more into my private pension instead

You can't opt out of NI contributions.

I think people are absolutely delusional if they imagine that middle earners won't be paying more income tax to pay for this crisis. Income tax is the fairest way of paying tax in any event.

I'm 45 and have never anticipated that the state pension will mean much by the time I get there. We are a much smaller generation than the preceding one though.

Income tax is the fairest way of paying tax in any event.

I don't think it is at all, wealth tax imo.

Fabulous, more tax on top of yet another pay freeze. But it's ok because people clapped for a bit....