How will you look to mitigate Labour’s tax hikes? (Part deux)

[EverythingAllatOnceAllTheTime]

How will you look to reduce the impact of Labour’s seemingly endless (imminent) tax hikes?

My friends who have been affected by the VAT on Private Schools are saying that they will move to State at jump off points (entry/GCSE/A Level) apart from one who is super wealthy but her daughter needs extra academic support in core subjects. This seems reasonable, she's could as easily be paying for tutors. The others will probably supplement with tutors on the quiet anyway.

My sister has told me that she won’t be joining us on the family holiday (UK) this year with our parents and all the children as they are cost cutting - she’s still planning to go to Italy in the summer.

She also mentioned they were doing their own painting the other day - something I've absolutely never heard her say before - she's always had people in before!

So looking at this example I would guess there will be fewer new cars, fewer new clothes, fewer meals out - that sort of discretionary spend to make up for any tax take on the middle/high earners. Which might not be a bad thing for the environment and improve things for people on lower incomes.

My apologies Twig, I will reply to you. After lunch, if ok?

@TwigTheWonderKid puts it perfectly. We have a good income into this household and if we have to pay more tax for good public services that’s fine with me.

My biggest issue with taxes during the last fourteen years is how they’ve been used to benefit those that least needed them, such as paying billions for dodgy PPE from Tory donors. I don’t mind tax so long as it’s spent properly.

Do you mean you'd be willing to pay more income tax? Or are you referring to other taxes

Firstly, please accept my sincere good wishes with respect to your terminal illness - I am truly sorry, and hope that you have the love and support of family and friends during this terrible period.

No, funding for the services you mention should not be cut - I am not certain from your post why donations have been cut.

However, I have paid probably several million in income tax during my working life, and it is patently unfair to ask me to pay more and more - I hope you agree.

One facet of capitalism is one where shareholders ‘risk’ their capital in search of a return. A CEO is compensated premised on ‘shareholder value’. If we dont like this model, then we are free to choose a different society.

The current model is broken - where a smaller tax base - including me - is expected to pay a greater tax burden in order to meet a larger number of ‘net claimaints’

It is unsustainable, and I am not willing to face an increasing level of taxation.

Yes they are and central Government funding has been cut in the last 5 years from 25% of their costs to 18%, despite very high inflation.

So yes if there is more tax take, then it follows that there is more money for public services inc things like Hospices and Air Ambulances.

The more tax is avoided, the more there will be cuts.

What relationship? neither the train drivers union nor the BMA give money to the Labour party and any union that does give money is collected via an "opt in" scheme where the union member has to actively give money to Lab
, even being in a union is optional too.

Labour also get far more from individual donors.

Yours is a tiresome and inaccurate argument.

@EverythingAllatOnceAllTheTimethank you for your platitudes, I do have amazing support from family and friends but what I'd really like is to know my hospice is fully funded so that when I am dying I can do so with dignity and minimal pain. This unlikely to happen now unless the government puts in more funding.

It's probably passed you by as you clearly live in an economic bubble, but there has been massive increase in the cost of living which has inevitably hit charitable donations, because normal people simply do not have any disposable income and research shows that poorer people normally donate a larger percentage of their income to charity than richer people. That, coupled with the effective cut in funding from government over many years (whilst tax payers' money was subsidising CEOs pay and shareholders dividends) means hospices have to make cuts. It was all over the news yesterday, I'm surprised you are doing unaware. And yes, we are free to choose a different society and I choose one where people who do take risks but effectively get rich because of the grind of their employees are taxed properly if there are not appropriate salary and bonus caps in place.

And no, I can never agree that those with the broadest shoulders should pay less than our society's poorest and most vulnerable people.

Are you actually aware that the poorest 10% of households now pay over 10% more of their income in tax than the richest 10%?

You might also find this informative:
http://researchbriefings.files.parliament.uk/documents/LLN-2010-003/LLN-2010-003.pdf

To answer your original question …

I currently happily pay “more” tax as a Scottish top rate tax payer (48%) when I could very easily move to south of the border. it costs me a few thousand a year in extra tax. I didn’t mind the extra, until recently where it seems like it’s being wasted.

I’m not wild about VAT on school fees, I think it should have been phased in to minimise the impact on the children, but we only have 2 more years to go so we’ll suck it up.

However, for various complicated reasons all of my tax and retirement planning relies on the current pension rules. If they change to such an extent that the relief is capped at 30% and the 25% lump sum is no longer tax free, it will affect me to the tune of well over £200k and I won’t be able to afford to retire when I need to.

I have a progressive illness, so there is a clear time component. I won’t be able to just work for longer.

So, being pragmatic, in 2 years once youngest is finished in school I will move abroad. I am lucky that my job will follow me, so I will just chose somewhere nice, but with lower income tax. Or I might go to e.g. Dubai where I could earn more. This will make up for the shortfall for me, but of course will cost the U.K. government who won’t get my tax. And yes, I fully understand that they won’t miss it on an individual level.

I’d rather stay here and pay “a bit” more tax because I have always been proud to be able to contribute. I’ve always paid exactly what I owed, never looked for tax loopholes. But unfortunately my altruism only stretches so far.

This week on MN there’s been a thread started by a hospital worker who is having a session on women’s health blocked by the diversity manager at her hospital. That’s someone being paid public money to make the workplace worse for NHS staff.

there’s also a current thread running where the OP is claiming to be broke but only works 5 hours a week and gets over £1000 a month in UC and other benefits because she’s studying.

hundreds of thousands wasted on rainbow crossings, drag queen story time, grants for pointless “research” and so on.

stopping these examples, removing diversity jobs etc won’t raise billions, but it will raise millions and more importantly creates a culture where taxpayer money is spent carefully. Those of us who are major tax contributors might feel better about what we pay, and paying more, in that case.

Platitudes?

Please, let go of the bitterness. I wish you well for the remainder of your time.

Otherwise, I do not agree with you - it’s my prerogative to minimise my tax burden, and that is what I shall continue to do. In the interim, direct your anger at the Government of the day, I suggest.

Labour (like all political parties) are making a political statement, rather than a sound financial one. They should repeal the two NI cuts made by Hunt last year, and marginally raise income tax, but they are playing a game of politics, while the country (literally) crumbles.

So yes, I'm perfectly happy to play along in the game...

I just hope they incentivise people to work more and for longer, not less. There should not be any tops ups for people not working at least 80 per cent and there should be free childcare. Those who are sick/disabled excluded, of course. But that is difficult to police. The whole scaremongering by the press encouraging people to ditch shares in British companies is utter madness, more self harm.

What people in this country forget is that in countries in Scandinavia, Singapore, Switzerland etc - the middle classes is everyone who works and everyone is taught respect for themselves and others and community spirit from infancy. We are seriously lacking in that regard - far too much US style individualism going on and division here. We need to change that. Everyone has to pay tax and be proud to pay tax and not try and game the system. That includes those striking who do not need to as well.

And I know I am going to sound very middle aged now, but the swearing, the littering, the vaping, the poor attitude in public, the people not sending their DCs to school etc, it all adds up, as well as those at the top finding loopholes. If they are going to take one element from socialism make that be work for the sake of work, be proud to work in your community. Work is good for mental health. Nobody should not be working, even if it costs the state money to find someone a job.

The people on here are so uninformed it alarms me! The £22bn black hole, that Starmer and Reeves mention at every opportunity, can he eradicated with the simple decision to repeal the two NI cuts that Hunt made last year (see IFS report), yet Reeves has decided to play politics and not increase income tax, NI or VAT (our biggest sources of tax revenue...along with corporation tax).

So she'll just tinker around the edges with IT, CGT and pensions...people will adapt their behaviour and she'll then announce we haven't raised as much as planned, all the while maintaining austerity all in the name of keep to the self-imposed fiscal rules!!

Anyone commenting on here, so at least learn economic 101, before the economy crumbles...

However, I have paid probably several million in income tax during my working life, and it is patently unfair to ask me to pay more and more - I hope you agree.

Wow At least you're honest about your selfishness. No. Most people will not agree with you. If you are earning an income, it is NOT unfair to ask you to pay tax on it. If you have paid millions so far you are clearly a very high earner. You should be paying more.

Hospices and NHS top ups should be funded by an IHT for all. Make it 10% for everyone, apart from funeral costs. Then have a higher threshold above a certain level but not so high that estates above 4 million structure their way out of it, as is currently the case.

The amount of well off grifters on MN moaning over private school fees and IHT would be laughable if it wasn't so entitled.

https://www.icaew.com/insights/insights-specials/the-future-of-tax-and-public-spending/more-people-are-living-longer-how-much-will-it-cost

It has got to be IHT from everyone who has more than 10k. I do not see the general resistance to this. It is great we all live longer, but it is costing a bomb and needs to be funded.

I don't see how more austerity when the 14 years of austerity has caused a lot of damage on society. I'm mid 20s and work in the women's sector (tackling DA/SV) and I'm currently buying my first flat in London, so yeah I'm worried about tax implications as I already feel my generation have it tough (I pay over £250 to student loan p/m).

However, I do think we need to pay more tax and I am more flavour of what other European countries pay in terms of tax. I have said it for a long time I feel like we won't low taps and high growth like in America and want their tax system but with the public services in Europe and we can't have that.

Personally, I do think Rachel Reeves should appeal the national insurance cuts and then she should sort out fiscal drag and raise the income tax threshold. But I don't see how more austerity is going to help anything we're just more likely to see more rioting because of it.

@@lowflow“The amount of well off grifters on MN moaning over private school fees and IHT would be laughable if it wasn't so entitled.”

Firstly, education has to be prioritised with an increasingly ageing population because you need young workers to be more productive, which is what education usually does.
Secondly, those who can comfortably live abroad in old age and get better healthcare and will do so to avoid IHT or will leave to save before, that is a real risk when you have over reliance on 600k tax payers.

This is incorrect. Nearly 20% of taxes go to welfare.
Given that 20% of tax goes to healthcare and it's still in such a poor state it's rather obvious that throwing more money at NHS is pointless, it needs fundamental change.

OP, back to your question.
The radical way is to emigrate and try to wait for government change from abroad, a lot of wealthy and high achieving people do it. The problem is that damages done are unlikely to be fully repaired by next party (and green belt will be under concrete forever). And this option is certainly not for everyone.

Otherwise, if you plan selling any assets - do it now. They might introduce CGT change from 31/10. If you didn't plan it - sit tight. This tax change will have "unintended" consequences and likely to be reversed.

IHT - try to give as much as you can now. Or make sure you don't die 😀until Tory are back. I'm ready to bet they will promise to abolish IHT in next GE.

Pension allowance - not much you can do about it but it does make a lot of sense to reduce hours or retire early given the overall tax burden. Again, a lot of higher earners planning to do this as a direct consequence

I suspect welfare includes the State Pension.

There’s no upper limit on how much tax you can pay, so anyone wishing to help fund more can pay in more.

https://advisingfamilies.org/uk/information-portal/managing-money/can-i-pay-more-tax-voluntarily/

You can give a donation to the government via the form of a direct bank transfer. To do this the potential donor should write to Her Majesty’s Treasury (HMT) at [email protected] specifying that they wish to make a donation towards public expenditure and lay out the value of the donation and the planned date of the donation (which must be seven calendar days in advance).