Council Tax

I think the problem is, for a basic tax payer, who doesn't own his/her own home is that a large slice of their income goes out in Rent, Council Tax, Energy and Utility costs.......which can leave them with basically no spare cash.

 

As is obvious, tax, pensions and state benefits (NHS, assistance etc.) are quite complicated.

If we all knew, at the age of 18, what we know now we would probably have arranged our finances, spending, savings much better - but we didn't!

There are not all that many on State Pension that earn above the free allowance even with some having paid Graduated Pensions (a type of top up you were allowed to make to the State Pension). As the State Pension is not taxed at source, any of you that have personal/private pensions will have the State Pension added to your total income and the total tax comes out of your personal/private pension. You cannot pay more than 20% on any increase unless you're a higher tax payer - it's just that the tax will be deducted by your personal/private pension company even if the increase is just the State Pension.

At the time of anyone paying into a private/personal or Graduated State pension they would have received an additional sum from the taxman equivalent to the tax they had paid on the earned income that they had used for that pension. (A bit oversimplified )

Those people that happened to be financial market savvy (just another term for informed gamblers ) could have done better with making their own arrangements that could have been changed as market forces and tax systems changed.

From a personal point of view:- I have the State pension and a small personal pension and pay virtually no tax because the total isn't high enough . On the up side, I was one of those gamblers and was able to do better with my savings than the government could do for me. This money has been, gradually, going into PEPs/ISA's (same thing, different years) so it's guaranteed not to attract any tax (not attracting much interest either ).

So I'm a low income (pension) person with some savings increased by 'lucky gambling' and live off the result of my 'gambling'. There's a finite limit to this result (savings) but we're making the most of it whilst we can. The 'gambling' included Mrs Shiney going to work for a bank because they gave cheap mortgages when mortgage levels were running between 8% and 15% (you need to create your own luck sometimes ). So, having no mortgage and being able to subsist on the minimal pensions we receive (topped up by Mrs Shiney's small company pension but no state pension) we use our savings mainly for holidays - which is what we had promised ourselves we would do when we spent 40+ years working over 60 hours a week.

The taxman isn't interested in us as we have no taxable income and I can't remember the last time I filled in a tax return . Yes I can - it was 17 years ago when I retired

As I can afford to live the way we do I refuse to take the free prescriptions from our local surgery and pay for them instead (only a slight way of paying back into the system - but it must help a tiny amount). I pay for private health so as to take some of the burden off the NHS and refused the Winter Fuel Allowance (wasn't allowed to do so in the early days ).

Tax may not seem fair but the country is struggling as it is and any reduction in tax would only make it worse. What really needs doing is making the system run more efficiently. Vote Shiney for Dictator! .

 

Good post shiney!

It's not always the govt screwing us:

1) The Personal Allowance is going up in April by £500 which means you you get to keep the whole 3% State Pension increase i.e. you will be better of by around £249.

2) If your income is over your Personal Allowance you will keep another £50 ish.

I know other's personal circumstances, pension amounts etc will vary considerably.

Like a lot of people I am working in the private sector and haven't had a pay rise in years - not even to keep up with inflation. It's tough times for many businesses at the moment. I'm not really complaining, as @silu says, compared to our parents and grandparents we are very well off.

 

Of course, it depends on when your parents and grandparents lived. My father went through both world wars and had a tough time. My grandfather, born in the 1850's, had a very tough time being brought up through the poverty of the East End.

We're very grateful to have had the opportunity to pull ourselves up by our bootstraps. All it took was hard work and determination - with none of the distractions that there are nowadays.

 

Apologies for having veered off topic . I have a habit of doing that but I'll blame it on my age .

Council tax bears no relationship to any other tax or benefit/pension and we shouldn't expect it to. It's simply another way of getting money to pay for all the services we need - or demand. For some people it seems perfectly fair as they are able to take advantage of what the Council tax offers and to others it's unfair because they are unable to take advantage of it.

For us, with no need to call upon almost all of the services that Council tax is supposed to provide, or not having them provided in our area, it would be much better for us to have a Poll Tax. Do we moan? No! Well, no more than I moan about everything else

 

Nothing ever comes down! That's economics for you

Percentages don't mean a thing as it depends on how they relate to each other - if they ever do.

I was talking with a financial advisor a few years ago, at a charity event, and he was saying that leaving your money in the bank at an interest of 3% meant you were losing the value of your savings if the cost of living was going up by 5%. He was saying that the money should be invested in unit trusts that would rise by more than 5%. This last bit was almost certainly correct but his argument re bank interest and inflation was a specious one. (@Zigs another candidate for word of the week? )

Percentages only work if they're directly related. He looked rather puzzled so I explained to him. I said that we could take an example that he might come across in his work. Let's assume he has a fairly rich client with savings if 500k, no mortgage and home expenses of 30k p.a. (those are the sort of clients financial advisors like ).

Using his percentages, his client's expenses go up by the cost of living (5%) so increase by 5% of 30k - which is £1,500 in the year.

His savings only go up by the bank interest of 3% so increase by 3% of 500k - which is £15,000. So, is the client really losing out? Duhh!!!

Of course, that's likely to be an unrealistic example because if the client has 500k he's likely to be spending more than 30k p.a. - but it shows that percentages don't mean much.

Sorry, folks! Maths, economics and silly arguments are a hobby of mine.

 

A slight deviation, with apologies.

I'm not a fan of the Poll which, to me, is a Medieval Tax where as soon as you're born you become a source of income to the State. Governments in the past have taxed anything they could , and still do, with the much quoted Window Tax as an example.
Tax is complicated for many reasons, both good and bad, and a Tax that is demanded of a person just because they're living in a family house would not, and did not, solve the financial problems of Councils and Governments as, in my case I ended up paying for for my Wife, and 3 daughters, so where's the sense or Justice in that. Instead of thinking of having a new all encompassing tax [we already have one called VAT]
Let's take it from another angle by reviewing the number of taxes, direct and indirect, we pay every day and the number of times we do it in that day. How many times do you buy something in the shops, on the Net, in the Garage, buying a ticket for the Bus, Train or Taxi, for a Plumber, Electrician etc , a meal in the Pub where you pay VAT on your Beer or Wine, even in the Coffee Shop. You pay tax on your Insurance Bills, your Funeral insurance, the cost of your Funeral. Hidden in several services you receive there is more than one tax, such as Energy where it is taxed several times along the supplier chain and we pay that accumulative sum finally in our Bills.
We also pay "Green" taxes in our energy bills which is a combination of taxes supposedly paid for ecological purpose financed by the Government i.e: [You],
I'm not anti tax by any means and I pay the full amount taxed on my income without taking any measures, legal or illegal, to lessen the amount but my point is do we need to introduce another all encompassing tax without questioning what happens to all the present taxes??. Every time you open your wallet or purse you pay tax so do we need the equivalent of another
Window Tax....i.e. tax it because it's there and breathing. Companies and wealthy individuals use expensive Lawyers to avoid any tax and the Government will basically turn a blind eye due to the pressures those companies and individuals exert.............leaving us to indirectly pay the shortfall.
Having said all that, Council Tax has been frozen since 2011 and the Council bills have not got any smaller so we have to pay our dues