There's a rising crescendo of concern over HM Treasury's decision to leave tax thresholds frozen at current levels until 2028. At a time of high inflation, it particularly bears down on low- and middle-income earners, and itself keeps inflation higher for longer. Several suggestions have been made for alternative ways to sort out the public finances, not least in these Share Radio commentaries, but there's no indication of any willingness to sit down and talk: like an ostrich, heads are firmly in the sand. Background music 'The Nexus Riddim' by Konrad OldMoney
Almost five times as many people will soon be paying 40% tax than in the early 1990s, when it was seen as a tax bracket reserved for the rich, the Institute for Fiscal Studies warned this week. It said that fiscal drag triggered by freezing the higher rate tax threshold would pull 7.8 million people into its net by 2027. The study suggested that the threshold would have to be almost doubled from its current level, at £50,271, to almost £100,000 to return the tax band to the level intended for it. Alongside the report, came the IFS’s warning that 40% tax had stopped being the preserve of high-earning professionals and was now hitting electricians, plumbers, teachers, nurses and more. The taxman nabbing 40p of every pound earned from a pay rise rather than 20p comes at a time when workers are running to stand still, with inflation at just above 10%. So, is it time the government stopped taxing by stealth and using tools like fiscal drag – instead raising thresholds with inflation or wages? And is it time to hike the higher rate threshold and pull people back down to basic rate tax? Georgie Frost, Lee Boyce and Simon Lambert discuss the thorny issue of tax and who counts as wealthy. The debate moves on to inheritance tax – another levy designed for the very rich but now hitting the wealthy middle classes. Why is IHT so unpopular when most don’t pay it and does it need reform? Plus, how much have you lost to inflation, will you get Nationwide’s new £100 Fairer Share bung, and finally, would you buy food two years past its best before date for big savings?
This week started with rumours of a pension tax relief cut and mansion tax, saw the Chancellor fall on his sword, and ended with people none the wiser about whether a Budget tax raid is more or less likely after all that. Sajid Javid exited the stage to be replaced by one of his own men, Rishi Sunak, after an attempt by Boris Johnson and Dominic Cummings to take back control at the Treasury was rebuffed by the short-lived Chancellor. The question now is just whose idea the pension tax relief and mansion tax plans were and whether they are now on the cards or not (or was the whole shebang just a bit of Machiavellian manoeuvring)? What we do know is that a Budget is due in less than a month, so other than the national purse strings being loosened for the ‘levelling-up’ agenda what are we likely to see? On this week’s podcast, Simon Lambert, Tanya Jefferies and Georgie Frost delve into the Chancellor saga, what we know about the new man, and what could happen in the Budget that will affect your finances, from a stamp duty cut, to IR35 easing and a tax raid on the wealthier.
Are tax returns too taxing, why did new overdraft rules backfire, are challenger banks biting and what are the cars that hold their value best? We answer these questions on this week’s This is Money podcast. It’s tax return time. The organised will have safely filed their tax returns long ago, but there are still plenty of people who don’t yet feel the last minute has arrived. But what if you are meant to fill in a tax return and don’t realise? On this week’s podcast, Simon Lambert, Lee Boyce and Georgie Frost discuss the ten reasons that people may have to fill a tax return in, even though they are employees paid through PAYE. The team also discuss whether much of the tax return is really needed, or whether people are needlessly spending time filling in an over complicated form for an overly complex system. Also on this week’s podcast is the overdraft row that’s blown up on the back of the FCA’s attempt to improve borrowing and bank’s deciding that 39.9 per cent rates sounded about right. The team discuss whether the challenger banks are starting to bite and why people are attracted to them. And finally, Simon tells us about the new episode of the Making the Money Work podcast with London 2012 Olympic-medal winning boxer Anthony Ogogo.
Entrepreneurs and investors pay less tax on their profits to reflect the risk they take. That’s the principle that lies behind capital gains tax being lower than the rates charged on employment income. But the influential think-tank, the Institute for Public Policy Research, wants to rip up that system and charge the same rate on gains from selling shares or property as income tax – and hack back the annual capital gains tax allowance to just £1,000. Is this the kind of For the many not the few move that Britain needs to level the playing field between those with plenty of capital and the ability to make investments and those who don’t? Or is it just another planned tax raid on those putting their money to productive use and growing our collective wealth? On this week’s podcast, Simon Lambert and Georgie Frost dig into the IPPR’s proposals and look at whether this is the kind of thing that could become Labour party policy? They also look at long-term investments that have paid off, risky investments to be wary of and the one thing plenty of people are happy to sink thousands of pounds into knowing that they will lose a big chunk of their money – a brand new car.
This is Money in partnership with Switchd, helping you save time and money by getting you the best deals automatically with Georgie Frost, Editor Simon Lambert and assistant editor Lee Boyce. In this episode: Freelancers beware - the tax changes that could hit your income. And as the PPI deadline fast approaches, banks breathe a collective sigh of relief. But is it too late to claim? Plus, things go from bad to worse for Neil Woodford, and John Lewis shows up the FCA in how to do scam prevention the right way.
There are three certainties in life. You know the drill. You’re born, you will die and you will listen to this podcast about tax. As another new tax year is upon us, editor Simon Lambert and host Georgie Frost explain the tax changes that will affect you. There is a nice pay rise for more than 20 million people as the personal allowance is raised. And Simon answers some of the questions on everyone’s lips: What is the lifetime allowance What is inheritance tax? Why do married couples get a tax break? Should families be rewarded when both parents work? How does national insurance work? And why do the cost of stamps and all your bills all go up on the same day? You'll learn an awful lot about things you need to know about tax without having to read about it.
With all the shenanigans in Westminster last week you could be forgiven for failing to register we had a Spring Statement at all – let alone clocked its finer points. Editor Simon Lambert, assistant editor Lee Boyce and host Georgie Frost fill you in on what you may have missed. It includes forecasts from the Office for Budgetary Responsibility on the UK economy, along with income growth, interest rates, the pound and house prices. We also have the true scale of the tax burden on families and businesses, with the overall tax take equivalent to 34.6% of Britain's economy, a level not seen since Harold Wilson was Prime Minister. Income tax receipts will rise nearly £54billion in the next five years, with steep rises forecast for National Insurance, VAT and Corporation Tax. A hike in probate 'fees' was waved through without a vote or debate in parliament by classifying it as a fee not a tax – but the ONS is now calling it a tax. The OBR also reveals that two flagship savings schemes have not been anywhere near as popular as planned, while boilers are out – as are feed-in tariffs from solar panels.
Good news. Chances are you just got a tax cut. Well an income tax cut at least, problem is your council tax is likely to be rising and if you are an investor the Government is after more of your dividends, or if you’re a landlord it wants your rental income.
So who are the winners and losers of the new tax year that rolled round on 6 April? And what are the candidates for dumbest bits of Britain’s tax code. In this week’s podcast, Simon Lambert, Rachel Rickard Straus and George Frost take a look at who is getting the biggest tax cut and who is being hit.
The Chancellor asked for ideas for inheritance tax to be simplified this week, but should we even have a death tax at all? On this week’s podcast Simon Lambert, Lee Boyce and Georgie Frost look at how it works, why it is unpopular, and how you can avoid it.
Simon suggests his plan to simplify it and get more people paying by removing those fiddly reliefs and slashing the rate to 20%. But we also consider the argument for taxing inheritance (and unearned property wealth) more heavily.
Later on the podcast, we discuss the problem of interest-only timebomb mortgages and whether homeowners are burying their heads in the sand. Also on the agenda is what’s wrong with M&S and investing in emerging markets and why they could still be a good long-term bet, even after funds rose almost 30% last year.
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