The Very Meh Humza Yousaf Thread.

[vikingTON]

3 hours ago, lichtgilphead said:

Not having a crystal ball, I don't know what the tax rate will be on my pension.

At today's rates, however, I would expect the tax rates to be based on the following figures after taking into account any allowances I'm entitled to. I would expect to pay a top rate of 21%

Is an anticipated top rate of 21% higher or lower than your rate of income tax on earnings? 

[vikingTON]

1 hour ago, Billy Jean King said:

I've just read about 4 pages where I think I'm right in saying that the claim is people paying into AVC schemes are tax avoiders. What next ISA savers are tax avoiders ?

AVCs have been around for years and if available to an employee who can afford the salary sacrifice are a no brainer given the benefits.

It's a tax break designed by governments to incentivise general savings for retirement in the working age population.  Whether those incentives are too generous at the higher end of the income distribution is entirely open to debate.

The relevant point here is the link between the Fraser of Allander analysis of an income tax rise and the pension adjustments described. @lichtgilphead explains how he can legitimately reduce his current tax burden through increased pension contributions - just spare us the bullshit that this will merely be taxed later: not at the same rate it won't, so it's a tax reduction method. Which is what many higher earners will do to mitigate the impact of income tax increases alone and so drastically reduce the revenue yielded by the SG. 

Unless and until that system is reformed, then most reasonably financially literate individuals will use the same tax breaks to reduce their personal tax payment, making the policy less efficient than it seems on paper. 

[lichtgilphead]

18 minutes ago, virginton said:

Is an anticipated top rate of 21% higher or lower than your rate of income tax on earnings? 

Badly phrased, my friend. If I was taking full advantage of the AVC scheme, my top tax rate would be 21%.

But yes, I pay some tax at the higher 42% rate due to my own inefficiencies & the recent local government pay increase

[vikingTON]

2 hours ago, Soapy FFC said:

But we weren't taking about the whole pension, we were on about additional payments that could be made without paying tax. Put £1000 away in a pension for 20 or 30 years in an investment that has an above inflation return, and you will end up with more than you started in real terms, and hence will probably pay more tax on that part of the pension.

Well no you probably won't, because the income tax on pensions involves much higher *real* tax threshold than a working age person who is earning a full wage and paying all outgoings and easily squirreling away £1,000 extra in pension contributions in your scenario.

That's not a criticism of the system, but to pretend that because your £1000 saving yielded more money you will pay more tax on it too is a wilful - or moronic - misrepresentation of reality. So long as the benefit is drawn out over a long period of time, you pay less in tax. That's the whole fucking point of the exercise.

[vikingTON]

11 minutes ago, lichtgilphead said:

Badly phrased, my friend. If I was taking full advantage of the AVC scheme, my top tax rate would be 21%.

But yes, I pay some tax at the higher 42% rate due to my own inefficiencies & the recent local government pay increase

But taking full advantage of such a scheme is unrealistic for the vast majority of working age adults, who have a whole stack of outgoings to pay for (mortgage, transport, raising horrid sprogs etc.) It's a theoretical equivalence that only those with generational wealth can actually exploit throughout their career. For everyone else AVC is an obvious tax break, with an anticipated yield over the long term. Of course, some people are unfortunate enough to never see the benefit of that decision, but it's not some revenue neutral choice. It's not even meant to be that.

Edited December 16, 2023 by vikingTON

[lichtgilphead]

I see what you're saying, but neither Mrs Gilp nor myself have any significant generational wealth.

The kids left home years ago & are making their own way, the mortgage is paid  & I have no other debt. We have 2 decent salaries coming in, so I should be able to pay enough AVC's to take my yearly salary down to below the higher rate tax band,

Being financially prudent doesn't make me a f*cking Tory, no matter what @Left Back thinks. 

[vikingTON]

You're not taking full advantage of the scheme though. For any working age person who has significant outgoings, they're not going to be able to maximize AVC for a good 15-20 years - even if they're in stable and relatively well-paid employment throughout. Whereas if they reach your position, it acts as a tax-efficient, pension top up for folk who are finding their fixed costs to be dwindling overall. 

So the real effect is that pension savings for relatively high earners will always be a net tax benefit compared to *not contributing* disposable income and just having HMRC lop more of it off at source. In no credible scenario will extra pension saving produce the same tax return to the SG or any other authority. Assuming a standard pensionable age and life expectancy, you'd have to max out the scheme for most of your working life for the government to stand a chance of getting enough from higher income taxes in retirement from an increased pot to account for 'efficient' income tax management. 

That's literally the entire point of the savings incentive. 

Edited December 16, 2023 by vikingTON

[Aufc]

You can’t tax your way out of a deficit. 

[vikingTON]

1 hour ago, Aufc said:

You can’t tax your way out of a deficit. 

lol wut

Are you holding a seance with Ayn Rand's decrepit ghost this morning? 

[strichener]

12 hours ago, Soapy FFC said:

But we weren't taking about the whole pension, we were on about additional payments that could be made without paying tax. Put £1000 away in a pension for 20 or 30 years in an investment that has an above inflation return, and you will end up with more than you started in real terms, and hence will probably pay more tax on that part of the pension.

Only if you ignore the 42% tax relief on the contributions and the 25% tax free withdrawal.

Someone with 20 years of working life making a contribution this year would have to see their pension fall by over 60% before they would be worse off.

Of course the other benefit is that your pension can, in most cases, be kept outside of inheritance tax.

As someone who contributes over 30% of salary to my pension both to reduce my tax bill and take advantage of the current pension allowances, I am not sure why others can't just admit that they are doing the same.  Even with this contribution, I still pay more tax on my remaining income (to the tune of many £1000s) than my southern cousins.  If the tax burden increases this discrepancy then I will definitely be considering where my tax residency will be.

The SNP have made this an issue as we have greater taxation and falling standards of service across the country.  I am fed up hearing that the solution is to tax more when we are projected to be paying the highest %age of GDP as tax than at any point since the second world war.

[Dunning1874]

10 hours ago, orfc said:

Some SNP human shield was on reporting scotland earlier trying to defend Humza's plan by pointing out nearly half of Scotland pays less tax than they would in England

They, and their pet BBC Reporting Scotland presenter, however yet again failed to point out that the difference the 19% tax band spanning about £2200 makes can only ever make you better off to the tune of £22 and some new pence in a year - less than 50p a week

 

 

I do love the breakdown of taxation into weekly totals to show that the lower rate doesn't achieve anything, when the same people complain about rises at higher rates being a barrier to aspiration which will cause capital flight etc.

That argument asks us to believe that 40p a week will make no difference to someone on minimum wage scraping by, while at the same time losing £2.88 a week is going to being an insurmountable financial obstacle for someone well within the top 5% for income in the country earning £80K.

[Aufc]

2 hours ago, virginton said:

lol wut

Are you holding a seance with Ayn Rand's decrepit ghost this morning? 

So raising less than £100m to try cover a £1.5bn deficit works?

[Dunning1874]

8 minutes ago, orfc said:

It does make no difference, you'd make more keeping an idle eye out for loose change on the pavement. Finding a quid rolling on the floor of the bus is more than a fortnights worth of SNP tax progressiveness. Absolutely a PR stunt

Ps think you've slipped a decimal point in the other figure, anyone paying the full range of the new tax band would be paying an extra 3% on about £50k, that's nearer £30 a week 

If you were on £120K a week then yes, that would be £25.96 a week extra, but as I said I was basing it on earning £80K.

Considering that earning £120K a year would put you comfortably in the top 3% of earners in the UK, I'm all for a substantial increase in their taxation.

[Blue Brazil Forever]

1 hour ago, Dunning1874 said:

If you were on £120K a week then yes, that would be £25.96 a week extra, but as I said I was basing it on earning £80K.

Considering that earning £120K a year would put you comfortably in the top 3% of earners in the UK, I'm all for a substantial increase in their taxation.

Why ? envious maybe ?

[strichener]

6 hours ago, Dunning1874 said:

If you were on £120K a week then yes, that would be £25.96 a week extra, but as I said I was basing it on earning £80K.

Considering that earning £120K a year would put you comfortably in the top 3% of earners in the UK, I'm all for a substantial increase in their taxation.

Your sums are still wrong.  £80k in UK = £55,459 take home.  £80k in Scotland = £53242 take home.  This equates to £2200 per year which is substantially more than £2.88 per week.

[Trogdor]

12 hours ago, strichener said:

Your sums are still wrong.  £80k in UK = £55,459 take home.  £80k in Scotland = £53242 take home.  This equates to £2200 per year which is substantially more than £2.88 per week.

I was about to post similar. It's £2,206 more in tax at £80k which is £42.42 per week (Dunning's sum is out by a factor of 15!)

The Chartered Institute of Tax cover this, there is a handy table at the foot of this link showing the comparable figures. It isn't disinformation, although a lot is thrown about regarding the effect of the Scottish income tax (on both sides of the argument).

https://www.tax.org.uk/poll-suggests-growing-confusion-over-scottish-taxes

Or Martin Lewis's website is another source. You can compare and contrast tax levels by using the 'I live in Scotland' checkbox. 

https://www.moneysavingexpert.com/tax-calculator/

Edited December 17, 2023 by Trogdor
Added MSE

[Leith Green]

If my son went to uni in England, fees are £9250 pa.

Even on a 3 year degree, thats £27750 - do a masters and its £37000 - more than it costs me for him going to Glasgow Uni.

But, but £2200 more in tax.....................

 

[Dunning1874]

Fair play, going back to the drawing board/basic school level arithmetic to check how I made such a colossal c**t of those sums.

Edit: Ah yes I see what I've done, I was only calculating the difference in how taxation would increase if a 45% band at 75K is introduced relative to what someone on £80K is paying in Scotland now, not factoring in the existing difference with the 42% rate which obviously adds up to paying considerably more compared to someone on the same wage elsewhere in the UK.

Edited December 17, 2023 by Dunning1874

[Inanimate Carbon Rod]

On 14/12/2023 at 14:02, O'Kelly Isley III said:

On that very point I've just read on the BBC website that Police Scotland is proposing to close circa 25 police stations across Scotland.  On that list is Dumbarton, Alexandria and Greenock, so unless this is just some wild exercise in sabre-rattling, then it is just, well, wild. And I think Possilpark and Saracen may be in there too

Looking at that list you cant help but notice that SNP cuts are now going to result in Police Stations being closed in the places in Scotland most ravaged by poverty. The buildings have been neglected by cuts for the last ten years, places which with a modest amount of capital investment could be modernised and saved. Lots of spin from people who dont really appreciate things like shutting Greenock means the nearest custody suite is now Govan, means far more time off the street after an arrest, meaning even less police on the streets of Inverclyde etc. From personal experience even just having the building in an area manned 24hrs is effective, vulnerable people able to be safeguarded, distinctly remember someone coming to one of these offices to be closed because his mum was in cardiac arrest and the station was beside his house, she got the help she needed quickly, the proposals shut that office. 

Humza Yousaf can find Scottish taxpayers money to send to countries with a space program but there’s no chance he’ll spend it keeping Scotland safe. 

[vikingTON]

On 16/12/2023 at 11:37, Aufc said:

So raising less than £100m to try cover a £1.5bn deficit works?

That's not the point that you originally claimed.