For now it has expressly been stated that pensioners won’t pay tax in their state pension, even if it goes above the personal tax threshold, if it is their only source of income.
I suspect the phrase “if it is their only source of income” is important.
Next year the full new state pension rises to £12,547.60 - for the sake of argument let’s suppose it goes up 2.5% in 2027, and by the same amount in 2028 - that’s 13182.82 which is £612 more than the personal threshold..
Any additional income will automatically be above threshold so will get taxed at 20% - plus the 20% on £612 which is £122.40 tax on the pension.
How many reach retirement with absolutely no savings? Apparently it’s in the 1 in 6 or 7 territory (15% approx) so most people probably will have some sort of income so will probably wind up paying tax on their pension.
Surely part of the reason to build up a ‘war chest’ is to be able to deal with future emergencies? e.g. the possibility of being drawn further into conflict in Ukraine is very real.
Also, at some point would it not be prudent to reduce the amount of money on tick by paying some of the capital off rather than continually just paying interest?
Which is arguably fairer than a flat rate road fund licence.
Yes, I get the pay per mile bit but this should also be by weight of the vehicle, environmental impact of fuel types etc for all vehicles? Looks like the road tax needs to be reformed.
The pensions for public sector employees was changed around 2010 and anyone joining now will have a very similar deal to the private sector as far as I’m aware.
Fine - but governments impose so much tax on fuel - why should motorists have to also pay per mile ?
And re ‘environmental impacts’ - yes the EVs are certainly heavier than the ICE vehicles and do cause more - immediate - damage to roads.
But how about taking into account the environmental impact caused by the rare earth metals used, and the child/slave labour that goes into mining such metals - shouldn’t EV users also have to pay for that element as well; in addition to the costs of disposal of the batteries ?
Where do you stop ?
One thing I find rather odd is that Dividend Income is taxed at a lower rate than income from work. Surely income is income and should be taxed uniformly.
You get £3,000 in dividends and earn £29,570 in wages in the 2024 to 2025 tax year.
This gives you a total income of £32,570.
You have a Personal Allowance of £12,570. Take this off your total income to leave a taxable income of £20,000.
This is in the basic rate tax band, so you would pay:
20% tax on £17,000 of wages
no tax on £500 of dividends, because of the dividend allowance
8.75% tax on £2,500 of dividends
Of course if your income of £32,570 was entirely wages, then you would pay 20% on £20,000 which would be £4,000 in tax as opposed to £3,618.75 in the above example.
One can see why those at higher levels in business and commerce are often remunerated by the transfer of dividend producing shares as opposed to a straightforward pay rise.
You could make a similar argument on capital gains tax. I struggle to see why the fruits of one’s labour should be taxed at a higher rate than capital growth.
I agree completely. The per mile charge should reflect all that.
Under my glorious rule that tax wouldn’t be on the fuel but, as mentioned above, on the amount of use a vehicle makes of the road infrastructure & it’s effect on the environment via it’s emmissions.
There are many ICE vehicles that are heavier than a lot of EVs - look at the unnecessary use of SUVs/Chelsea tractors. I would also suggest that the vast amount of weight induced road damage is due to much larger/heavier goods vehicles.
Spoiler alert! Check out how much damage is done producing & transporting the fuel to run ICE vehicles.
