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Autumn Statement: Higher rate income tax threshold raised

by Annabelle Williams on Dec 05, 2012 at 13:39

Autumn Statement: Higher rate income tax threshold raised

The threshold for paying the top 40% rate of income tax will rise by 1% from 2014, the government announced today.

In the Autumn Statement, chancellor George Osborne announced the threshold for paying the top-tier level of income tax will go from £41,450 currently to £41,865 in 2014, followed by a further 1% rise in 2015 to £42,285.

The news came as the chancellor announced plans to 'uprate' benefit, essentially freezing rises in state support at less than the rate of inflation. He said this should be matched with less tax for those who do work.

'I want to be completely clear with people, this is in an increase. In fact it is the first cash increasse in the higher rate threshold in this parliament,' he said.

'Again, there are no easy ways to reduce the deficit - but from year to year, no one will pay a penny more in income tax.'

Personal allowance will rise by £1,335 next year, ‘the highest cash increase ever’, Osborne claimed, so that next year workers will be allowed to earn £9,940 before paying any income tax at all.

‘This is a direct boost to people working hard to provide for their families,’ he said.

11 comments so far. Why not have your say?

Phil Castle

Dec 05, 2012 at 14:46

Pointless

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David Hanby

Dec 05, 2012 at 14:52

I am confused by the £41,450 figure - I thought the personal allowance was £8,105 and the basic rate band £34,370, £42,475 total - what am I missing?

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rumnian

Dec 05, 2012 at 15:28

We wouldnt pay so much tax at all if some of the work shy paid in. I hope he cuts tax credits to people who pump out kids with no work ethic.

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Paul Barnard

Dec 05, 2012 at 15:50

@rumnian - so, just how many are there and how much less tax would we all pay? Be interested to see your figures.

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a point worth noting

Dec 05, 2012 at 23:28

Is the top rate of tax not 45% from next year, this refers to 40%...???

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George Kendall

Dec 06, 2012 at 05:59

Agree with David Hanby, the figures seem off to me.

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rumnian

Dec 06, 2012 at 09:19

@Paul Barnard - I don't really understand your point. My point is that I'm continously seeing on fact find tax credits of £800+ per month when the family chooses to work 20 hrs a week and the mum doesnt work but they choose to have 4+ kids. Is that fair to the dual working family getting nothing? If you've got some figures which you suggest publish them and back up your point! Joker

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Paul Barnard

Dec 06, 2012 at 09:46

Funny how some people have to resort to personal abuse to back up their point of view. I will expand on the point that I was making, in plain English. It is all too easy to demonise a sector of the population and without any factual basis, blame them for whatever you want, without corroboration. Another one often heard from people is the "tax the rich/tax bankers bonuses" as if there could ever be enough revenue raised by such methods to address the problem.

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Mikal

Dec 06, 2012 at 11:23

@David - 2012 Personal Allowance/Higher Rate £8,105 / £34,370 = £42,475

2013 PA / HR £9205 / £32,245 = £41,450

What I don't understand is where the £9,940 figure comes from. The increase of £1,335 is when it goes from £8,105 to the 2014 £9,440 So that certainly isn't next year but where does the £9,940 come in. Typo ?

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Mikal

Dec 06, 2012 at 12:08

With George's new figures you will still achieve the £41,450 as £9,440 + £32,010 still works out to be £41,450 (yes; he's cut the basic rate limit !)

its a re balance of figures but it is designed to lift more people from the basic rate bracket. in real terms they are only saving £47 per year (if they were on the edge of each bracket) but politically it makes a big statement because Georgy Porgy can say that X number of people no longer pay tax :/

I'm also reading today that there are changes to NI thresholds, so once again, its a political statement and a jiggle in the numbers rather than a real term gain in net income.

I'd be interested to see what happens to the basic rate in 2014 and what happens to the personal allowances etc.

Makes you wonder why there is still no growth ! When you cook the books to make political statements rather than real term gains there is no increase in personal wealth to help drive growth from increased spending.

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rumnian

Dec 06, 2012 at 12:41

Barnard where's your figures on the bankers then still waiting for you to back up your point.

"It is all too easy to demonise a sector of the population and without any factual basis, blame them for whatever you want, without corroboration"

Are you really believing this or are you too liberal to open your eyes? I think you must be a red or blinkered!

You're either a red or a banker!

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