The personal allowance will increase very modestly to £10,000 and then 30% tax will due – which will hammer low earners and pensioners in particular, whose tax rates will rise considerably as a result, as will the tax rate for most on less than £45,000 of income a year.
That\’s about the TPA report. In which they say:
Income Tax and Employees’ and Employers’ National Insurance would be merged into a single tax on labour income, with rates levelled down so that certain groups don’t face higher bills
Currently, between £7.something k and £45 k ish you pay three taxes on your wages. Income tax at 20%, employees NI at, umm, 12 ish % and employers NI at 13.8%. And yes, even Ritchie agrees that the actual incidence of that employers\’ NI is upon the employee, in the form of lower wages.
This selection of three taxes will be cut to 30% in total. This is known as a cut in taxes and a cut in tax rates as well. Not, as our innumerate retired accountant seems to think, an increase.
This how the TPA report achieves the following:
For example, a two earner household, with an income of around £28,000 would receive a tax cut of around £3,400.
I do sometimes wonder whether Ritchie can even read.