Making Work Pay

Post by Jason
I don't half suffer sometimes, and tonight I found myself listening to
"Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every £10 you earn on top of your jobseekers
allowance you will end up being £3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

m***@hotmail.com

2010-11-15 15:59:58 UTC

Post by Jason
I don't half suffer sometimes, and tonight I found myself listening to
"Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every 10 you earn on top of your jobseekers
allowance you will end up being 3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

Just go self employed, effective tax rate of nil for a while, say up
to £15k income.

Martin <><

Fredxx

2010-11-16 00:00:24 UTC

Post by m***@hotmail.com

Post by Jason
I don't half suffer sometimes, and tonight I found myself listening
to "Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every 10 you earn on top of your jobseekers
allowance you will end up being 3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that
some politicians bleated about scrapping the 10% rate of income tax.

Just go self employed, effective tax rate of nil for a while, say up
to £15k income.

How did you work that one out? Gone are the days of the first £10k of
profit was exempt of corporation tax.

Certainly being self employed and not on PAYE will be a minefield for the
calculation of any "Credit".

m***@hotmail.com

2010-11-16 08:36:03 UTC

Post by m***@hotmail.com

Post by Jason
I don't half suffer sometimes, and tonight I found myself listening
to "Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every 10 you earn on top of your jobseekers
allowance you will end up being 3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that
some politicians bleated about scrapping the 10% rate of income tax.

Just go self employed, effective tax rate of nil for a while, say up
to 15k income.

How did you work that one out? Gone are the days of the first 10k of
profit was exempt of corporation tax.
Certainly being self employed and not on PAYE will be a minefield for the
calculation of any "Credit".- Hide quoted text -
- Show quoted text -

Eh? Why would self employed pay corporation tax?
We pay income tax, our business profits are our income - personal
income, not company income.
As I recall, limited companies pay corporation tax - but they are run
by company directors, not self employed, and directors are classed as
employed.

When you are employed, you pay to get subscriptions, pay to attend
shows, pay to go on holiday, pay your own travel, pay your gas &
electricity, pay basically for everything you get.
When you are self employed, relevant subscriptions are tax deductable,
relevant shows are tax deductable, relevant residential training
courses are tax deductable, relevant travel is tax deductable at 40p
per mile for the first 10,000 business miles, 'use of home as office'
to do paperwork can mean a portion of gas & electricity becomes a
business expense and therefore tax deductable and so on.
So you have to make more money before starting to pay income tax.

Being self employed isn't a minefield for any 'credit'. Your income is
the profit of the business. If a loss is made, 0 profit. If employed
as well, deduct loss from gross earnings in employed job to calculate
income level.

Martin <><

Robbie

2010-11-15 22:01:10 UTC

Post by Fredxx

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

It will be higher than 65% for people who pay Council Tax. IDS has also
proposed the abolition of Council Tax Benefit and in its place allow
councils to run their own council tax rebate scheme. Therefore as
someone gains income they will lose some or all of the council tax
rebate they would receive. However this loss of rebate has not been
factored into his calculations since the rebate is not part of the
proposed Universal Credit. A clever trick and one which the media have
(un)surprisingly not cottoned on to.

Another proposal that hasn't attracted any media comment is that
earnings disregards will apply only to couples with or without children,
lone parents and the disabled. The White Paper for the proposed
Universal Credit specifically says "we do not expect to include a
disregard for single people without children - any earnings will be
tapered off straight away". Again, because IDS has not included this in
with his "briefing pack" the media, as with council tax rebates above,
have not picked up on it. The proposed abolition of earnings disregards
for single, childless, claimants is buried away on page 70 of the
document... that said, the disregard is only worth £5 at present anyway.

Niteawk

2010-11-16 01:38:27 UTC

Post by Fredxx

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

It will be higher than 65% for people who pay Council Tax. IDS has also
proposed the abolition of Council Tax Benefit and in its place allow
councils to run their own council tax rebate scheme. Therefore as someone
gains income they will lose some or all of the council tax rebate they
would receive. However this loss of rebate has not been factored into his
calculations since the rebate is not part of the proposed Universal
Credit. A clever trick and one which the media have (un)surprisingly not
cottoned on to.
Another proposal that hasn't attracted any media comment is that earnings
disregards will apply only to couples with or without children, lone
parents and the disabled. The White Paper for the proposed Universal
Credit specifically says "we do not expect to include a disregard for
single people without children - any earnings will be tapered off straight
away". Again, because IDS has not included this in with his "briefing
pack" the media, as with council tax rebates above, have not picked up on
it. The proposed abolition of earnings disregards for single, childless,
claimants is buried away on page 70 of the document... that said, the
disregard is only worth £5 at present anyway.

Yep thats about right, that is Smiths idea of "better off in work" You will
have £5 pw more to spend as long as you can get to work on foot, assuming
you can find a job. Wait a minute, isn't the cost of everything going up in
the new year, VAT up to 20% utilities up by 7%, the cost of living in
general up by fuck knows how many percent, the price of everything keeps
rising on a daily basis so there is no way in hell you are going to be
better off.

We have to pay for a civil service that is now larger than the private
sector which happens to be shrinking, so not enough tax payers to pay for
the governments excesses. The funny thing is there appears to be no sign of
any cut backs on sham course providers, these are being increased to bash
the unemployed even more if that is possible, hence Workfare to provide a
free labour force for the private sector in the hope more businesses will
prosper and pay the tax needed to keep our lords and masters sitting on
their fat arses. Of course if the country was not full of foreign workers,
unemployment would not be worth mentioning. But thats another story for
another day. ;)

m***@hotmail.com

2010-11-16 08:45:35 UTC

Post by Niteawk

Post by Jason
I don't half suffer sometimes, and tonight I found myself listening to
"Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every 10 you earn on top of your jobseekers
allowance you will end up being 3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

It will be higher than 65% for people who pay Council Tax. IDS has also
proposed the abolition of Council Tax Benefit and in its place allow
councils to run their own council tax rebate scheme. Therefore as someone
gains income they will lose some or all of the council tax rebate they
would receive. However this loss of rebate has not been factored into his
calculations since the rebate is not part of the proposed Universal
Credit. A clever trick and one which the media have (un)surprisingly not
cottoned on to.
Another proposal that hasn't attracted any media comment is that earnings
disregards will apply only to couples with or without children, lone
parents and the disabled. The White Paper for the proposed Universal
Credit specifically says "we do not expect to include a disregard for
single people without children - any earnings will be tapered off straight
away". Again, because IDS has not included this in with his "briefing
pack" the media, as with council tax rebates above, have not picked up on
it. The proposed abolition of earnings disregards for single, childless,
claimants is buried away on page 70 of the document... that said, the
disregard is only worth 5 at present anyway.

Yep thats about right, that is Smiths idea of "better off in work" You will
have 5 pw more to spend as long as you can get to work on foot, assuming
you can find a job. Wait a minute, isn't the cost of everything going up in
the new year, VAT up to 20% utilities up by 7%, the cost of living in
general up by fuck knows how many percent, the price of everything keeps
rising on a daily basis so there is no way in hell you are going to be
better off.
We have to pay for a civil service that is now larger than the private
sector which happens to be shrinking, so not enough tax payers to pay for
the governments excesses. The funny thing is there appears to be no sign of
any cut backs on sham course providers, these are being increased to bash
the unemployed even more if that is possible, hence Workfare to provide a
free labour force for the private sector in the hope more businesses will
prosper and pay the tax needed to keep our lords and masters sitting on
their fat arses. Of course if the country was not full of foreign workers,
unemployment would not be worth mentioning. But thats another story for
another day. ;)- Hide quoted text -
- Show quoted text -

Yes, most things going up in the new year. How much was the benefit
increase again?
The government are doing more 'payment by results' contracts, shifting
risk from themselves onto the service providers. More risk means more
money per person charged, so could easily increase the total bill
government is paying. Rather than say charging £500 for a course,
payment by results with bigger risk can result in charging £10k for
the same course - because there will statistically be less people
meeting result payment requirements so cost of those not meeting it
will have to be factored into price.
Its a common business practice, greater risk demands increased price
to compensate.

Don't read too much into Workfare, few employers will risk people only
there for a few weeks doing more than very basic types of work. And so
far, haven't seen what the government will pay for costs yet.
Costs money to manage people.

Martin <><

Andy Pandy

2010-11-16 21:16:45 UTC

Post by Fredxx

Post by Jason
I don't half suffer sometimes, and tonight I found myself
listening to
"Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every £10 you earn on top of your jobseekers
allowance you will end up being £3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

But a lot better than the current 95%.

Post by Robbie
It will be higher than 65% for people who pay Council Tax. IDS has
also proposed the abolition of Council Tax Benefit and in its place
allow councils to run their own council tax rebate scheme. Therefore
as someone gains income they will lose some or all of the council
tax rebate they would receive. However this loss of rebate has not
been factored into his calculations since the rebate is not part of
the proposed Universal Credit. A clever trick and one which the
media have (un)surprisingly not cottoned on to.

It depends how it's going to work, for instance the council tax rebate
may be withdrawn only after universal credit is withdrawn, rather than
in parallel. Or it may only start to be withdrawn on income above, say
£10k, in which case the 65% rate would still apply to all income below
the personal allowance as it states in the white paper.

Post by Robbie
Another proposal that hasn't attracted any media comment is that
earnings disregards will apply only to couples with or without
children, lone parents and the disabled. The White Paper for the
proposed Universal Credit specifically says "we do not expect to
include a disregard for single people without children - any
earnings will be tapered off straight away". Again, because IDS has
not included this in with his "briefing pack" the media, as with
council tax rebates above, have not picked up on it. The proposed
abolition of earnings disregards for single, childless, claimants is
buried away on page 70 of the document... that said, the disregard
is only worth £5 at present anyway.

It also says that nobody will be worse off as a result of universal
credit, any shortfall would be made up. How this will work is unclear.
The most significant change that would make people worse off is the
universal credit has capital rules, and will subsume tax credits which
don't. Are they really going to continue paying tax credits to those
with £100k in the bank?

--
Andy

m***@hotmail.com

2010-11-16 22:38:09 UTC

Post by Jason
I don't half suffer sometimes, and tonight I found myself
listening to
"Money Box" on Radio 4. There was some details about Ian Duncan
Smith's "Making work pay" that I hadn't heard before. Apparently it
means that for for every £10 you earn on top of your jobseekers
allowance you will end up being £3.50 better off. There was other
stuff about 'thresholds' and stuff, but my ears had glazed over by
that time.

So only an effective 65% tax rate then on income. It amuses me
that some
politicians bleated about scrapping the 10% rate of income tax.

But a lot better than the current 95%.

Nobody will be worse off. Don't you just love it when government makes
that kind of statement?
Its about as bad as when they chuck around the word 'fair' or
'fairer'.

Not forgetting of course the increase in red tape and workload for the
civil service that any changes are likely to make.
Call me a cynic, but I expect poor computer systems, well over budget
and with MPs interfering to make changes to proposed end product
system (CSA CS2 system had over 2500 changes made between proposal
agreement with supplier and go live date), poor training, poor
planning and good old fashioned 'slip through the net' loopholes.

Martin <><

Henry

2010-11-18 00:54:46 UTC

Post by Fredxx
So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

But a lot better than the current 95%.

Or 100% for work under 15 hours/week, but only for a few. More
significant are the 1.5 million now facing 70% effective rates (income
tax, NI and tax credits): just changing the rate to 65% would slightly
improve incentives for them but have the side-effect of increasing the
numbers on the high effective rate.

Given that the CTB replacement grant to local authorities will be lower
than current spending on CTB, (see slide 7 of
http://www.ifs.org.uk/budgets/sr2010/welfare.pdf )
local authorities are unlikely to be more generous than now.

Andy Pandy

2010-11-18 18:41:46 UTC

Post by Fredxx
So only an effective 65% tax rate then on income. It amuses me that some
politicians bleated about scrapping the 10% rate of income tax.

But a lot better than the current 95%.

Or 100% for work under 15 hours/week, but only for a few.

Indeed. Or even over 100% for those getting SMI.

Post by Henry
More significant are the 1.5 million now facing 70% effective rates

73% from next April.

Post by Henry
just changing the rate to 65% would slightly improve incentives for
them but have the side-effect of increasing the numbers on the high
effective rate.

Post by Robbie
It will be higher than 65% for people who pay Council Tax. IDS has
also proposed the abolition of Council Tax Benefit and in its place
allow councils to run their own council tax rebate scheme.
Therefore
as someone gains income they will lose some or all of the council
tax rebate they would receive. However this loss of rebate has not
been factored into his calculations since the rebate is not part of
the proposed Universal Credit. A clever trick and one which the
media have (un)surprisingly not cottoned on to.

Given that the CTB replacement grant to local authorities will be
lower than current spending on CTB, (see slide 7 of
http://www.ifs.org.uk/budgets/sr2010/welfare.pdf )
local authorities are unlikely to be more generous than now.

But there's any number of things they could do - for instance instead
of giving 100% max rebate as now it could be a max of 80%, or they
could increase council tax to make up for the shortfall, or cut
spending etc.

Some of the points on the IFS slide are silly - "postcode lottery",
"two levels of government share control over tax and benefit
redistribution"??

Er, what is the council tax itself then? That's a "postcode lottery",
that's "two levels of government sharing control over tax", that's the
whole point of council tax FFS! It's a local tax.

--
Andy

Henry

2010-11-21 22:00:26 UTC

Post by Henry
Given that the CTB replacement grant to local authorities will be
lower than current spending on CTB, (see slide 7 of
http://www.ifs.org.uk/budgets/sr2010/welfare.pdf)
local authorities are unlikely to be more generous than now.

But there's any number of things they could do - for instance instead
of giving 100% max rebate as now it could be a max of 80%, or they
could increase council tax to make up for the shortfall, or cut
spending etc.
Some of the points on the IFS slide are silly - "postcode lottery",
"two levels of government share control over tax and benefit
redistribution"??
Er, what is the council tax itself then? That's a "postcode lottery",
that's "two levels of government sharing control over tax", that's the
whole point of council tax FFS! It's a local tax.

Perhaps, but there is a difference between a property-related tax
where LAs can only decide the "Band D rate" (within central government
constraints), and have almost no power of discretion on income-related
rebates, and a tax which LAs can turn effectively into a local low-
income tax of their own design. What is to stop them having
withdrawal rates which combined with Universal Benefit go over 100%?
Will they be allowed to discriminate between low-income pensioners
(who tend to vote) and other low-income adults (who do not vote as
often) and children (who cannot)?

Andy Pandy

2010-11-22 19:58:42 UTC

Post by Henry