New income tax rate set at 45%
The government has today introduced the new 45% tax rate for those earning over £150,000 per year but this is not planned to come into force until 2011. This has caused obvious concern within the Conservative party and while they have not commented specifically on the new tax, for fear of falling into a government trap, there are grave concerns that Conservative supporters will demand a clear strategy for the new income tax band.
This appears to be more of a political move that a fiscal move with the new tax band only affecting the top 1% of taxpayers in the UK and said to only raise a paltry £4 billion. At the same time as introducing this new tax rate the government has also confirmed that each basic rate taxpayer will be £145 better off next year due to changes in the tax bands. It is hoped that consumers will use this increased income wisely and it should hopefully instigate some form of economic recovery.
The Chancellor has caught many people off guard with his tax changes even though a number of the main ones where already leaked to the press. The 45% tax rate band had been kept under wraps until late last night and appears to have gone down well with traditional Labour supporters.
How will the Conservative party react to the pre-budget report?
The pre-budget report contained a number of ticking time-bombs for the UK taxpayer but also a number of traps for the Conservative party to consider. The new 45% tax band is nothing more than a gesture as it will only raise in the region of £5 billion a year but it puts the Conservative party in a difficult position. If they are seen to fight the introduction of a new tax band this will alienate...Read More
U.K. authorities deny plans to nationalise Lloyds Bank
That the UK authorities have come out with a firm statement regarding the future of Lloyds bank and confirmed there are "no plans" for an outright nationalisation of the group. The wording is interesting because while many investors and analysts believe a full nationalisation is not far away, it appears inevitable that the UK taxpayer will be forced to increase its stake in the ailing group.
Tax affairs of BBC higher earners questioned by authorities
It has been revealed that a number of high-profile and highly paid presenters at the BBC are officially employed on a freelance basis despite the fact that they are for all intensive and purposes full-time members of staff. It is alleged that a number of these high paid presenters have set up their own private companies into which their income from the BBC is paid in order to take advantage of mor...Read More
UK budget deficit under extreme pressure
The revelation that the UK government had to borrow £16.1 billion to balance the books in August has caught many analysts and economists offguard. This figure is 63% higher than the same period last year and is in fact the largest shortfall since records began back in 1993. Since the beginning of the new tax year the UK government has borrowed in excess of £65 billion compared to only £26 billi...Read More
UK mortgage holders charged excess £1800 year
A Daily Mail investigation has today claimed that the average UK mortgage holder is now paying an excess of up to £1800 a year due to the fact that UK banks have failed to pass on recent base rate reductions. The investigation details the fact that in July 2008 the average mortgage rate was only 0.5% above the cost of borrowing on the money markets although today there appears to be an extra 2.61...Read More