The Casbyness (casby) wrote,
The Casbyness
casby

2007 Budget - quick note

Low income earners. Let's take one as an example. Say they earn £8,000 per year.

OLD SYSTEM:

£8,000 - £5,035 allowance = £2,965

£2,965 - £2,150 (10% tax band) = £815

£815/100 x 22 = £179.30 tax to pay, plus £215 from the 10% band above, = £394.30 tax.


NEW SYSTEM:

£8,000 - £5,035 allowance = £2,965

10% tax band abolished.

£2,965/100 x 20 = £593.00 tax.

O.O

How does this simplification help the poor? Tax Credits are a joke. The basic tax threshold will need to be raised considerably higher if the new budget is wanting to help out those most in need of tax reductions.
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Just out of interest (and congratulations on getting your sums right, I suspect you are now disqualified from posting on the "have your say" section of the website), why do you think tax credits are a joke? I know they're quite complicated and there were problems with the administration system early on, but I thought those had been mostly resolved (inasmuch as any system can work, that is).
the BBC website, obviously.
I came to the same conclusions as the Conservatives: that people are worse off until they hit an income of £18K PA (using this year's allowance figures).

Or more precisely, at the threshold of the standard tax rate (£7,185 PA) you lose £215 from the scrapping of the 10% tax band.

You then gain 2p of it back for every pound you earn until you hit £17,935 PA, which is the point where you break even and get the £215 back (or rather, would have lost it anyway).

Beyond £17,935, you benefit from the changes at the same 2p per £1 rate :D

So basically, don't accept a salary of less than £18K. Or try to claim tax credits, if you earn less (which will result in you being given free money, then being told you paid too much and required to pay lots back).
you're forgetting that under labour there are no poor.

Shit! I'm going to have to move to Canada.