Tax increases

What are peoples thoughts on the national insurance tax increase?

A lot of people on Twitter are saying that it’s not a 1.25% increase. It’s a 1.25 points increase which works out at a 10% increase in NI.

Then there are now reports that council tax has to go up in April because councils can’t afford to pay for social care. This can be anything up to 3% per council. So this could potentially be up to 13% increase in tax alone with the NI increase included.

Then on top of that you have the additional yearly increase in fuel, food, mobile, broadband and other bills.

The 3% allowed council tax increase has been around for a few years apparently, but no council has actually increased the council tax by the full 3% as of yet.

Also there are discussions between different political parties advising about the National Minimum Wage they would apply if they got into power (£10 per hour if labour get elected etc)

But no matter how much they put NMW up. We will still be in the same position as we’ll end up paying more tax on the higher amounts, and more towards bills and essentials.

Social care has been a mess for years, it desperately needs more funding. I’m happy to pay a bit extra

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I do agree and the same with healthcare. However if it is true regarding 10% increase of our wages that is quite a bit of chunk per person per year.

If you have a reasonable job and can afford the extra then that’s no problem. But for the people that 10% plus up to 3% and then whatever % on bills, food etc. it’s going to be a huge problem for some people. There are already reports of police officers, nhs staff and teachers using food banks and that was way before covid and this increase.

Here’s some figures from the bbc

The problem of low wages is separate. Hopefully care workers will get more with this funding but I really doubt it

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The maths is incorrect - it’s not a 13% increase in tax.

The NI increase means most will pay an extra 1.25% of their salary in tax. The best way to think of NI is as income tax just under a different name.

However,any Council Tax increase - whether it’s 1% or 3% etc - is an increase in your Council Tax … not a percentage of your salary.

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Oh yes course it is :man_facepalming: (It’s getting late haha)

But it’s not 1.25% is it? It’s 1.25 points? This is what confuses me.

So it’s 12% at the moment but is going up to 13.25% so that’s a 1.25 point increase. This means you pay 10%ish more

In simple terms if you pay 10% tax but it increases to 20% then that’s a 10 point increase. The effect on you is you’re paying double, so it’s 100% more.

That make sense?

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This tax increase is absolutely necessary and the right decision. People live much longer now, and are less frequently looked after by their family than in the past. Both the social care system and the NHS need to be able to cope with that. Also, there was a pandemic and that has created another bill that needs to be paid for - there was a lot of additional cost and resource needed.

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Probs gonna force me to vote a diffrent way at the next election, why increase taxes on earned income while letting off landlords all while to benefit wealthy older peoples children.

Makes BAYE even more tempting.

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What’s BAYE, please?

Landlords have to pay NI if their profit is over a certain amount. Any extra charge to landlords would be instantly passed on to their tenants

Beyonce I think

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Buy as you earn.

Edited to add details from gov.uk, also known as save as you earn:

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Abolish NI imo, and roll the whole thing into Income Tax.

There’s absolutely no reason pensioners shouldn’t help contribute to their own care.

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More tax isn’t great but it’s needed. That’s life sadly.

It’s a shame that £350m a week from the EU doesn’t cover it though. Real shame.

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It really does need more funding. It’s a shame the vast majority of the revenue from this tax rise will be permanently swallowed by the NHS. Social care will still be on its knees.

They will from 2023 as it will be a new health and social care levy, rather than higher NI

Since bojo can’t make decisions on health policy in Northern Ireland (and Scotland) our portion of the money is just going to be given to the assembly.

Will be interesting to see what the devolved regions come up with

Only if they are in employment.

At least these policies are also accompanied by the end of the ‘triple lock’. Raising state pension rate faster than working wages and inflation has been a huge overspend frankly.

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That has only been suspended for one year.

Covid-19/Furlough meant that the increase this year would have been extremely large otherwise due to technical reasons.

State pensions in the UK are actually quite low compared to other similar countries.

What is a real shame is that a) NI is actually a PAYG system and b) the ‘raids’ on private pensions that the last Labour Government did.

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