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.
British savers squandering £263 million in tax
It has been revealed that in total UK taxpayers are paying £263 million each year in tax on their income, while ignoring the various tax efficient vehicles on the market. Such simple actions as utilising their cash Isa allowances would have alleviated the around £165 million in tax with a further £98 million paid in dividend income which could be held in a tax-free environment.
Is it fair for successful business people to pay more tax?
While nobody could really argue with the fact that the more income you receive the more tax you should pay, there is a growing feeling that the UK government is now starting to over penalise successful business people in order to replenish the UK coffers and balance the budget. The government has already announced plans to introduce a 50p tax band and it would appear that a number of benefits for...Read More
Personal loan market continues to struggle
It has been revealed that an increasing number of payment defaults in the personal loan market are pushing personal loan rates higher and higher. The best three-year rate available at the moment on a £5,000 loan is around 9% which is almost double the rate seen prior to the credit crunch in 2007. So how will this particular market pan out in the short to medium term? In what is becoming a self...Read More
UK base rates to remain at 0.5%
Ernst & Young recently issued a report in which it forecast that UK base rates would remain at 0.5% for one and a half years, and the UK recession could potentially last longer than many people think. The well respected economic think tank also believes there is a significant danger of a double dip recession during which high hopes for a quick rebound are foiled and the economy moves back into a d...Read More