Apologies if this has been discussed elsewhere and ok it is rather trivial but this is something
I need to "get off my chest".
How on earth can those clever people in the government and Revenue&Customs end up with this ?
Of course it is made even more laughable by the income-related adjustment which reduces £10660
to £10600 where appropriate !
If anyone can remind me of any other ludicrous examples of our tax system I will be grateful for the laugh.
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Replies (7)
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Just the transition
Whilst the difference is not great to gradually increase the PA whilst freezing the age allowance is always going to have this sort of thing at one point.
They could have raised the PA to £10,660, however that extra £60 at marginal tax across entire country would have a reasonable cost and cutting the age allowance would have been political suicide.
So, freeze the age allowance ,as done, and in its final year have the strange effect of only a £60 difference; on the positive side can ignore from the following year as there will be no differential.
Five bob
What about the extra five bob a week you get for being 80 ?
Or the £8500 Higher Paid Employee ?
£3000 Annual CTT/IHT annual exemption. Unchanged in 40 years.
You don't have to look hard.
I think for once we have to give credit
I think for once we ought to give credit where credit is due. Removing the age allowance differential (by letting it wither) is sensible, especially given the stated aim of scrapping the tax return.
I do returns for two individuals who have pensions and investment income (taxed at source) which used to take them fluttering over/under the claw back threshold. In the case of one of them I have already suggested to HMRC that a return is no longer necessary, with current interest rates payable they are not going back over threshold any time soon.
Hopefully with age allowance going a lot of these individuals will cease to be asked for returns-imho a good thing, the last thing one wants in ones seventies/ eighties is the need to complete a return with a total income fluttering around the £26,000 mark.
Not going to happen
...... especially given the stated aim of scrapping the tax return.
We're not going to abolish the tax return, are we ?
We might call it something else but that's a different matter.
I agree,
...... especially given the stated aim of scrapping the tax return.We're not going to abolish the tax return, are we ?
We might call it something else but that's a different matter.
I agree, I doubt the execution will match the rhetoric. However it may at least give a little impulse to reducing the number of individuals who need to complete some form of return, whatever it may be called.
I think...
... it might help you understand if you look at the amounts that have applied in previous years and that will apply in future years.
The £10,660 has been a constant over the last few years, while the normal PA has been increasing. Next year the two will align.
The £10,660 was put there some years ago. It cannot (equitably) be taken away, but the government is keen for the differential to disappear entirely.
EDIT: Started typing this ages ago, but got interrupted. Hence crossing with the above posts.
Clawback
Might have helped if George had said "OK, tell you what, we'll abolish clawback now it's down to £60".
Not that I agree with clawback of personal allowances. A marginal rate of 60% flanked by 40% either side makes no sense to me.