Latest news with #TanmanjeetSinghDhesi
Daily Record
12 hours ago
- Business
- Daily Record
New call to scrap National Insurance deductions for working people aged over 60
National Contributions are no longer taken from wages when someone reaches State Pension age. Income tax rises for Scots in April - how the changes affect you A new online petition is calling on the UK Government to scrap National Insurance contribution deductions for workers over the age of 60. People automatically stop seeing NICs deducted from payslips when they reach State Pension age, which is currently 66, but set to rise to 67 over 2026 and 2028. However, petition creator Mike Haynes argues making workers over 60 exempt from paying National Insurance would 'make it easier financially for older people to survive'. He added: 'We are calling for this as many over-60s are struggling to survive due to what we believe has been incompetent government spending over the past 30 years.' The 'exempt workers over 60 from National Insurance payments' petition has been posted on the UK Government's Petitions Parliament website. At 10,000 signatures of support, it would be entitled to a written response from the UK Government, most-likely The Treasury. At 100,000 signatures, it would be considered by the Petitions Committee for debate in Parliament - you can read it in full here. Understanding National Insurance The Chartered Institute of Taxation explains National Insurance is a tax on earnings paid by both employees from their wages and by employers (on top of the wages they pay out), as well as by the self-employed (from their trading profits). Technically National Insurance is a social security contribution rather than a tax, but really, it's a compulsory payment taken from you by the Government, a lot like a tax. Most people stop paying National Insurance contributions after reaching State Pension age. However, you only pay Income Tax if your taxable income - including your private pension and State Pension - is more than your tax-free allowances (the amount of income you're allowed before you pay tax). This has been frozen at £12,570 since the 2021/22 financial year, but will rise with inflation on April 6, 2028. Even if you're still working, when you reach State Pension age you usually stop paying National Insurance contributions. If you continue to pay them, you can claim back any National Insurance if you have overpaid. Calls to unfreeze Personal Allowance An online petition calling for the personal tax allowance to rise from £12,570 to £20,000 to help people on a low income 'get off benefits and allow pensioners a decent income' was debated last month by MPs in Parliament after more than 271,800 people across the UK have shown their support for the proposal. An update from the UK Government, related to the potential impact of increasing the Personal Allowance to £20,000, looks set to crush any hopes people may have of seeing the income threshold freeze lifted before the planned rise with inflation in April 2028. In a written response to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray said the UK Government 'has no plans to increase the Personal Allowance to £20,000'. Mr Murray said: 'The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. 'The Government has no plans to increase the Personal Allowance to £20,000.' He went on to explain how increasing the Personal Allowance to £20,000 would 'come at a significant fiscal cost of many billions of pounds per annum' adding this would 'reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on'. The Treasury Minister continued: 'It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible. 'The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.'
Daily Mirror
08-05-2025
- Business
- Daily Mirror
Income tax update due next week after calls to increase Personal Allowance to £20,000
A petition calling on the UK Government to increase the Personal Allowance to £20,000 has attracted more than 248,000 signatures across the UK and is set to be debated in Parliament on Monday, May 12 An online petition urging for the personal tax allowance to be raised from £12,570 to £20,000 in order to assist low-income individuals "get off benefits and allow pensioners a decent income" is set to be debated by MPs in Parliament next week. This comes after the proposal garnered support from over 248,400 people across the UK. However, a recent update from the UK Government regarding the potential impact of increasing the Personal Allowance to £20,000 seems to quash any hopes of seeing the income threshold freeze lifted before the planned rise with inflation in April 2028, reports the Daily Record. In a written response to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray stated that the UK Government "has no plans to increase the Personal Allowance to £20,000". Mr Murray said: "The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. The Government has no plans to increase the Personal Allowance to £20,000." He further explained that raising the Personal Allowance to £20,000 would "come at a significant fiscal cost of many billions of pounds per annum". He added that this would "reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on". The Treasury Minister said, "It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible. The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way." Upcoming debates could signal changes in the wind for taxpayers, as Westminster Hall braces for a fiery session on Monday, May 12. MPs will champion their constituents' calls for a hike to the Personal Allowance, with proceedings drawing to a close with a Treasury Minister making the case for persisting with the current freeze until the conclusion of the 2027/28 financial year. Alan David Frost, the mind behind the petition, is calling it downright wrong to tax pensioners on their State Pension when it exceeds the personal allowance threshold. He's convinced that bumping up the allowance would pump more money into the economy. The 'raise the income tax personal allowance from £12570 to £20000' petition clearly outlines the benefactors: "We think this would help low earners to get off benefits and allow pensioners a decent income. We think it is abhorrent to tax pensioners on their State Pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth." The Treasury, responding to a petition's proposals on February 20, echoed Mr Murray's sentiment. It stated: "The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds." Furthermore, it was made clear that there are no intentions by the UK Government to raise the Personal Allowance to £20,000. The full response is available to read on the petitions-parliament website. State Pension payments 2025/26 Weekly State Pension payments increased on April 7, however, people will not see an immediate increase as the contributory benefit is paid in arrears. Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 To check your own future State Pension payments, use the online forecasting tool on here. In terms of taxation, individuals receiving the full New State Pension will generally be exempt from income tax. However, older residents garnering additional funds through employment or personal retirement plans may have a tax liability. Typically, tax for most is deducted automatically via PAYE on employment income or on private pensions. Those not paying tax automatically should expect a tax bill from HMRC the subsequent summer, due for payment by January of the following year. There's been a fair amount of conjecture about the number of pensioners who will be taxed before the Personal Allowance freeze ends. However, it's worth noting that out of the 13 million State Pensioners in the UK, around 8.51 million (65%) already pay some tax in retirement, so this isn't a new phenomenon. With auto-enrolment in the workplace now in its 13th year, more individuals are set to benefit from increased income in retirement and will likely pay tax - typically deducted from their private pension. It's crucial to understand that any tax paid in retirement is based on the amount of income earned above the threshold - not the total additional income. For instance, if someone has a total annual income of £13,000, they will pay tax on £430 - the amount above the £12,570 threshold. Those affected would then have to pay HMRC 19 per cent of their income above the threshold, which is the starter rate of tax in Scotland (20% in England).
Daily Record
06-05-2025
- Business
- Daily Record
New income tax update on calls to increase Personal Allowance to £20,000 due next week
More than 248,400 people have signed an online petition calling for an increase to the £12,570 Personal Allowance. Income tax rises for Scots in April - how the changes affect you An online petition calling for the personal tax allowance to rise from £12,570 to £20,000 to help people on a low income 'get off benefits and allow pensioners a decent income' is to be debated by MPs in Parliament next week after more than 248,400 people across the UK showed support for the proposal. However, a new update from the UK Government, related to the potential impact of increasing the Personal Allowance to £20,000, looks set to dash any hopes people may have of seeing the income threshold freeze lifted before the planned rise with inflation in April 2028. In a written response to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray said that the UK Government 'has no plans to increase the Personal Allowance to £20,000'. Mr Murray said: 'The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. 'The Government has no plans to increase the Personal Allowance to £20,000.' He went on to explain how increasing the Personal Allowance to £20,000 would 'come at a significant fiscal cost of many billions of pounds per annum' adding that this would 'reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on'. The Treasury Minister continued: 'It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible. 'The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.' The debate in Westminster Hall on Monday, May 12 will allow MPs to argue on behalf of their constituents for an increase to the Personal Allowance. The debate will conclude with a Treasury Minister responding to the proposal, giving the UK Government's reasons for maintaining the freeze until the end of the 2027/28 financil year. Online petition Petition creator Alan David Frost argues it is 'abhorrent to tax pensioners on their State Pension when it is over the personal allowance' threshold and says the increase would 'inject more cash into the economy'. The 'raise the income tax personal allowance from £12570 to £20000' petition states: 'We think this would help low earners to get off benefits and allow pensioners a decent income. 'We think it is abhorrent to tax pensioners on their State Pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth.' Responding to the proposals in the petition on February 20, the Treasury gave a similar response to Mr Murray. The Department said: "The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds." It also went on to say that the UK Government has no plans to increase the Personal Allowance to £20,000. State Pension payments 2025/26 Weekly State Pension payments increased on April 7, however, people will not see an immediate increase as the contributory benefit is paid in arrears. Full New State Pension Weekly payment: £230.25 Four-weekly payment: £921 Annual amount: £11,973 Full Basic State Pension Weekly payment: £176.45 Four-weekly payment: £705.80 Annual amount: £9,175 To check your own future State Pension payments, use the online forecasting tool on here. State Pension and tax The most important thing to be aware of is that someone on the full New State Pension will not pay income tax, but older people with additional income through employment, private or workplace pensions, might need to pay tax. For most people, this would be paid automatically through PAYE on employment and tax on private pensions. Anyone who doesn't pay tax automatically pays tax through deductions, would receive a tax bill from HMRC the following summer to be paid by January in the next year. There has been a fair bit of speculation on the number of pensioners who will pay tax before the Personal Allowance freeze ends, but currently of the 13 million State Pensioners across the UK, some 8.51 (65%) already pay some tax in retirement, so this isn't something new. And with auto-enrolment in the workplace - now in its 13th year - more people will benefit from increased income in retirement and will probably pay tax - which will typically be deducted from their private pension. It's important to understand any tax to be paid in retirement is based on the amount of income earned above the threshold - not the total additional income. For example, if someone has a total annual income of £13,000, they will pay tax on £430 - which is the amount above the £12,570 threshold. Those affected would then have to pay HMRC 19 per cent of their income above the threshold, which is the starter rate of tax in Scotland (20% in England).
Daily Record
21-04-2025
- Business
- Daily Record
Calls to increase tax-free Personal Allowance to £20,000 set for debate next month
More than 246,700 people have signed an online petition calling for and increase to the £12,570 Personal Allowance. An online petition calling for the personal tax allowance to rise from £12,570 to £20,000 to help people on a low income 'get off benefits and allow pensioners a decent income' is to be debated by MPs in Parliament next month after more than 246,700 people across the UK have shown their support for the proposal. However, a new update from the UK Government, related to the potential impact of increasing the Personal Allowance to £20,000, looks set to dash any hopes people may have of seeing the income threshold freeze lifted before the planned rise with inflation in April 2028. In a written response to Labour MP Tanmanjeet Singh Dhesi, Treasury Minister James Murray said that the UK Government 'has no plans to increase the Personal Allowance to £20,000'. Mr Murray said: 'The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds. 'The Government has no plans to increase the Personal Allowance to £20,000.' He went on to explain how increasing the Personal Allowance to £20,000 would 'come at a significant fiscal cost of many billions of pounds per annum' adding that this would 'reduce tax receipts substantially, decreasing funds available for the UK's hospitals, schools, and other essential public services that we all rely on'. The Treasury Minister continued: 'It would also undermine the work the Chancellor has done to restore fiscal responsibility and economic stability, which are critical to getting our economy growing and keeping taxes, inflation, and mortgages as low as possible. 'The Government keeps all taxes under review as part of the policy making process. The Chancellor will announce any changes to the tax system at fiscal events in the usual way.' Online petition Petition creator Alan David Frost argues it is 'abhorrent to tax pensioners on their State Pension when it is over the personal allowance' threshold and says the increase would 'inject more cash into the economy'. The 'raise the income tax personal allowance from £12570 to £20000' petition states: 'We think this would help low earners to get off benefits and allow pensioners a decent income. 'We think it is abhorrent to tax pensioners on their State Pension when it is over the personal allowance. We also think raising the personal allowance would lift many low earners out of benefits and inject more cash into the economy creating growth.' Responding to the proposals in the petition on February 20, the Treasury gave a similar response to Mr Murray. The Department said: "The Government is committed to keeping taxes for working people as low as possible while ensuring fiscal responsibility and so, at our first Budget, we decided not to extend the freeze on personal tax thresholds." It also went on to say that the UK Government has no plans to increase the Personal Allowance to £20,000. The parliamentary debate is set to take place on May 12. State Pension payments 2025/26 Weekly State Pension payments increased on April 7, however, people will not see an immediate increase as the contributory benefit is paid in arrears. Full New State Pension Weekly payment: £230.25 (from £221.20) Four-weekly payment: £921 (from £884.80) Annual amount: £11,973 (from £11,502) Full Basic State Pension Weekly payment: £176.45 (from £169.50) Four-weekly payment: £705.80 (from £678) Annual amount: £9,175 (from £8,814) To check your own future State Pension payments, use the online forecasting tool on here. State Pension and tax The most important thing to be aware of is that someone on the full New State Pension will not pay income tax, but older people with additional income through employment, private or workplace pensions, might need to pay tax. For most people, this would be paid automatically through PAYE on employment and tax on private pensions. Anyone who doesn't pay tax automatically pays tax through deductions, would receive a tax bill from HMRC the following summer to be paid by January in the next year. There has been a fair bit of speculation on the number of pensioners who will pay tax before the Personal Allowance freeze ends, but currently of the 13 million State Pensioners across the UK, nearly 8m (62%) already pay some tax in retirement, so this isn't something new. And with auto-enrolment in the workplace - now in its 13th year - more people will benefit from increased income in retirement and will probably pay tax - which will typically be deducted from their private pension. It's important to understand any tax to be paid in retirement is based on the amount of income earned above the threshold - not the total additional income. For example, if someone has a total annual income of £13,000, they will pay tax on £430 - which is the amount above the £12,570 threshold. Those affected would then have to pay HMRC 19 per cent of their income above the threshold, which is the starter rate of tax in Scotland (20% in England).
