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Do You Think The Chancellor Is Correct To Drop This?
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I do, I think it's fine as it is
I do, I think it's fine as it is
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“…they also get a proportionat
19:58 Sat 05th Mar 2016
“…they also get a proportionately bigger tax top-up from the government…”
Er…no. They get a proportionately bigger sum in tax relief because they are earning proportionately more and paying proportionately more in tax. If the money had not gone into a pension it would have been taxed at their prevailing rate. So not a “top-up” but an allowance to keep more of their own dosh for taxation at a later date. Not quite the same thing at all.
The principle is that money set aside for a pension is not taxed because it is taxed when it is withdrawn. One of the main reasons retaining the status quo is favourable is that politicians cannot be trusted. Today’s Chancellor may well decide to tax pension contributions now on the understanding that they will be tax free on withdrawal. But thirty years is a long time in politics – in fact it is aeons. A future Chancellor may well decide that, despite the cash being taxed upon deposit, the “concession” allowing it to be withdrawn tax free “is no longer sustainable” and so it will get taxed twice.
It is not only the Chancellor’s wealthy chums that benefit from this. It is also people like senior nurses, police officers, London Underground train drivers – a whole host of people in fact who have, by “fiscal creep”, been dragged into the 40% tax bracket. Many of them are not, by any stretch of the imagination, “wealthy”.
Er…no. They get a proportionately bigger sum in tax relief because they are earning proportionately more and paying proportionately more in tax. If the money had not gone into a pension it would have been taxed at their prevailing rate. So not a “top-up” but an allowance to keep more of their own dosh for taxation at a later date. Not quite the same thing at all.
The principle is that money set aside for a pension is not taxed because it is taxed when it is withdrawn. One of the main reasons retaining the status quo is favourable is that politicians cannot be trusted. Today’s Chancellor may well decide to tax pension contributions now on the understanding that they will be tax free on withdrawal. But thirty years is a long time in politics – in fact it is aeons. A future Chancellor may well decide that, despite the cash being taxed upon deposit, the “concession” allowing it to be withdrawn tax free “is no longer sustainable” and so it will get taxed twice.
It is not only the Chancellor’s wealthy chums that benefit from this. It is also people like senior nurses, police officers, London Underground train drivers – a whole host of people in fact who have, by “fiscal creep”, been dragged into the 40% tax bracket. Many of them are not, by any stretch of the imagination, “wealthy”.
New Judge,
This decision (to drop the Chancellors proposal) is entirely political . He does not want to upset the wealthy middle class, because he want to be leader/PM when Cameron goes. He still wants to to make the change, and undoubtedly will do once he is leader. Before this Government is finished, the change will have happened.
This decision (to drop the Chancellors proposal) is entirely political . He does not want to upset the wealthy middle class, because he want to be leader/PM when Cameron goes. He still wants to to make the change, and undoubtedly will do once he is leader. Before this Government is finished, the change will have happened.
agree NJ
someone in my evg class said - and the chancellor helps you with your pension...
and I snapped no he doesnt he just doesnt tax contributions ....
I am sorry for this technical answer 3T as I know you want to be told that the bibbles will murder you in your bed on account of ooman rights and absolutely nothing else .... BUT
Pensions schemes can be classified and the english one is E.E.T
contributions tax exempt
mainitenance accumulation tax exempt
pension payment taxed ...................................I bet you can see where the E and the T come from
so in the cycle the money is taxed once
mr brown I regret to say started taxing corporations and pensions funds to the tune of 20% and it is accepted that this step in 1997 led directly to the speedy death of final salary schemes over the next yen years
The tax take Mr brown got was exactly the deficit in the pension schemes
so in fact it is now E. E(T). T - rich Mr brown and poor us
and the new ISA pension would be T. E(T) . E(T)
well who can see the tax pouring from pension schemes into the chancellors coffers ?
I think you can see it would be chaos to fiddle around with the pension scheme as Osborne suggested -
also you would have two very different pension schemes running at the same time....
apolz for the very technical tmt- some readers will appreciate and some will not. ideas taken from lee's revenue law ( I think )
someone in my evg class said - and the chancellor helps you with your pension...
and I snapped no he doesnt he just doesnt tax contributions ....
I am sorry for this technical answer 3T as I know you want to be told that the bibbles will murder you in your bed on account of ooman rights and absolutely nothing else .... BUT
Pensions schemes can be classified and the english one is E.E.T
contributions tax exempt
mainitenance accumulation tax exempt
pension payment taxed ...................................I bet you can see where the E and the T come from
so in the cycle the money is taxed once
mr brown I regret to say started taxing corporations and pensions funds to the tune of 20% and it is accepted that this step in 1997 led directly to the speedy death of final salary schemes over the next yen years
The tax take Mr brown got was exactly the deficit in the pension schemes
so in fact it is now E. E(T). T - rich Mr brown and poor us
and the new ISA pension would be T. E(T) . E(T)
well who can see the tax pouring from pension schemes into the chancellors coffers ?
I think you can see it would be chaos to fiddle around with the pension scheme as Osborne suggested -
also you would have two very different pension schemes running at the same time....
apolz for the very technical tmt- some readers will appreciate and some will not. ideas taken from lee's revenue law ( I think )
Correct to drop it ? I think he proved himself insane to suggest it !
Let's just, at a time when we're trying to offload pension provision by the State, discourage saving into a private pension and encourage folk to splurge their pension savings on something and have to claim living costs from the State when they need a pension income. That'll be a great idea. Save State spending now and leave a problem for the future. Brilliant.
Let's just, at a time when we're trying to offload pension provision by the State, discourage saving into a private pension and encourage folk to splurge their pension savings on something and have to claim living costs from the State when they need a pension income. That'll be a great idea. Save State spending now and leave a problem for the future. Brilliant.
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