The Framers Forum

New tax year (09/10). The good and the bad

The 2009/10 tax year began on Monday, and it's all change. Bizarrely though, this year’s Budget is after the start of the tax year, so changes then may be backdated (last year's figures in brackets).

The boosts to income ...

Personal allowance UP! Every man, woman and child can now earn £6,475 (£6,035) before paying income tax. For those aged 65-74, it’s £9,490 (£9,030), and for over-75s, £9,640 (£9,180).


Basic rate tax threshold UP. You now pay 20% tax on the first £37,400 (£34,800) over the personal allowance, meaning under 65s hit the higher 40% rate at £43,875 (£40,835).


National insurance start point UP. You now need to earn £110 per week (£105), before paying for NI, usually 11%.


State pension UP. It's £95.25 (£90.70) a week for a single person. (Not long now Keith)!


Pension credit UP. The minimum guaranteed income's now £130 for single pensioners (£124.05), and £198.45 for couples (£189.35). See the State Pension guide.


New Health in Pregnancy Grant. All pregnant women will get a non-means-tested £190 in their 25th week. More in the Pregnancy Grant discussion.


Inheritance tax threshold UP. You can leave £325,000 (£312,000) tax-free. See the Inheritance Tax guide.


And the hits ...

Fiscal drag. This isn’t Alistair Darling in women’s clothes, it’s when increased allowances aren’t as generous as they seem. If wages and/or inflation increase by more than the allowances, effectively the government gets more tax revenue anyway, and the real value of the increase is less.


National insurance upper earnings UP. You will pay 11% NI on earnings up to £43,888 a year (£40,040) and 1% above that.


ISA limits. No change. Yet again, the amount savable tax-free hasn’t increased with inflation or earnings. See the Top Cash ISAs guide.


Child Tax Credit family element. No change. Many families get this, and the freeze at £545 is an effective cut. Yet the means-tested element has increased to £2,235. See the Benefits Check-Up guide.

Reading that just adds insult to injury for what the Irish government has done over here. In essence, pretty much the opposite.

Can't remember all the details, but some of the changes are as follows:-

They have increased income taxes through "levies" and are now taxing people who are probably already living at or below the poverty line.

They are removing mortgage interest relief from people who purchased their homes seven years ago, and plan to phase out MIRAS completely as soon as possible.

Capital gains tax is up.

Corporation tax, however, remains unchanged at 12½%. Spooky...

They are taking the 2% Christmas bonus away from the elderly and people on unemployment benefit. I'd imagine that that money would be typically used to pay for heating bills, not Christmas presents.

They have raised the cap for PRSI (National Insurance) contributions.

They have reduced child benefit.

"Middle income earners" will, as per usual, be hit hardest. On average, people in this income bracket will essentially be working an extra 4-5 weeks for the government every year. As usual, there seems to have been little done to improve the tax take from the super-rich.

Despite the fact that lobbyists for the retail sector (which currently provides employment for about 800,000 people) have been screaming for a cut in VAT rates, they have been left unchanged.

I think that what they have done stands a good chance of grinding retail business to a near complete halt, They have done nothing to protect jobs and businesses that are still there, and are doing frell all to create new jobs.

The only things they didn't hike up were alcohol and petrol. The only reason that they didn't is that they don't want to lose further VAT revenue to the UK as a result of the now rampant cross-border shopping. They whinged about the detrimental effect that the UK government's policies are having on Irish spending patterns and therefore VAT revenue. More spookiness...

They are bashing people over the head about competitiveness, and trying to con them that the economy can become more competitive in international markets by reducing wages. They have done NOTHING to help reduce the price of other overheads that business owners have to pay, particularly for electricity and telecommunications services.

They've announced funding for training for 24.000 people. Bit paltry when they're expecting unemployment over here to crest the 550K mark by the end of the year. There seems to be no plan for creating much in the way of jobs, or of supporting existing indigenous businesses Fat lot of good the training will be if there are no employers there to take them on when they've finished their courses.

IMO, the Irish government isn't making even the slightest pretence about caring about their electorate; certainly not how severely it is affecting people at a human level. There were callers on the phone to Lenihan (Minister for Finance) on a radio show this morning: some were close to tears. All their outpourings of how scared and anxious they were fell on deaf ears, and the only responses they got from the Minister were a mix of political spin and platitudes. Not one word of apology or empathy. Appalling.

However, when it comes to the banks and the property developers, the government plans to buy up toxic assets with an estimated book value of 80-90 billion. What with? Yes. You guessed. Taxpayers' money.

And they're promising more pain in future budgets.

This morning, two of the banks had their credit ratings downgraded, and their share price fell again.

Well done, the Irish "Gimme!" government! It appears that the treatment is going to be far worse than the disease. As a retail business owner in this country, I am very concerned that it may indeed kill the patient. IMO, the last thing this economy needs right now is fiscal chaemotherapy.

One of the radio show callers was a woman similar to myself. She left Ireland in the '70s to seek work elsewhere, but returned back in 1995 hoping to spend the rest of her years here. She told the minister she bitterly regretted that decision. I also rue the day I came back here.

I am a political thinker rather than a political activist, and certainly have no allegiances to any political party. But I really wish that the country would sack the current Fianna Fail / Green Party coalition. They are, in my opinion, a disgrace to the nation, and don't give a toss about the people who elected them (with the possible exception of wealthy property developers and bankers). And I don't think for one minute that I'm the only person on this island right now that feels this way.

gesso wrote:Fiscal drag. This isn’t Alistair Darling in women’s clothes,....

I was eating my lunch as i read this

having said that, if he shaved his legs and plucked those hilarious eyebrows......




lordy - do i need a long weekend...................

Moglet wrote:
I am a political thinker rather than a political activist, and certainly have no allegiances to any political party. But I really wish that the country would sack the current .................. Party . They are, in my opinion, a disgrace to the nation, and don't give a toss about the people who elected them (with the possible exception of wealthy property developers and bankers). And I don't think for one minute that I'm the only person on this island right now that feels this way.

Fill in the party of your own choice. I've thunk for long enough. Action is my next port of call to that island they call Democracyshirechesterland... dont look for it on google earth I just made it up!

framejunkie wrote: was eating my

eyebrows......




lordy - do i need a long weekend...................

you see how easy it is for people to twist what you say

what sort of weekend would that be then.?...um.?..um? c'mon tell all?

gesso wrote:you see how easy it is for people to twist what you say

what sort of weekend would that be then.?...um.?..um? c'mon tell all?

I'n not going to tell you Gesso - you'll only twist it into something perverse.

Oh, alright, if you must know I'm off to Devon for a friend of mine's 30th. You know the sort of thing - sleeping in a cottage, long walks on dartmoor with my friends, admiring the views and the cattle mooing at dusk. Then a bit of light mayhem in the evening. In short, it'll be just like Hackney

framejunkie wrote:if you must know I'm off to Devon...long walks on dartmoor.....

Anywhere near Bovey Tracey? If so, you're very welcome to pop-in and say hello.

Not your average framer wrote:Anywhere near Bovey Tracey? If so, you're very welcome to pop-in and say hello.

Ah! Turns out i've made a proper townie error, and we are staying near Exmoor, not Dartmoor. Same fing innit? just North of Tiverton, to be more accurate, so not a million miles from Bovey Tracey. If you are open on Saturday and its chucking it down i might drop by - we'll be in want of indoor activity. We could have wagers on how long it take my girlfriend to get bored to the point of violence while we do geek chat.

Thanks Darling.

You’re welcome, Sweetheart!

[Ah! Turns out i've made a proper townie error]

Well, yer gettin the lingo anyways...proper job

Ala "Blackadder" Bill