Government ‘not afraid of tax rises’ – Britons urged to act now ahead of changes

The increase in National Insurance (NI) of 1.25 percent will also include people working past state pension age, who did not previously have to contribute. The Government have also collected more Inheritance Tax (IHT) receipts compared to last year.

New data from HMRC showed that Inheritance Tax receipts for April to September 2021 were £3.1billion – £700million higher than the same period a year earlier.

In percentage terms, HMRC receipts were higher from IHT by 29 percent compared to the period April to September 2020.

IHT receipts were higher in October 2020, November 2020, and March to August 2021, which is expected to be due to higher volumes of wealth transfers that took place during the COVID-19 pandemic. However, HMRC has not yet confirmed this.

There were lower receipts in April and May 2020, which was due to a temporary issue where HMRC were unable to accept cheques for payment of IHT due to COVID-19.

READ MORE: Dad ordered to repay all Universal Credit he received during COVID-19

That includes those working past state pension age, which has drawn the ire of many older workers, who had not previously had to pay NI, but could now be paying hundreds of pounds a year.

National Insurance tax helps pay for services such as the NHS, maternity, sick and bereavement pay, and also the state pension. It is paid by people who are earning, but traditionally people have not had to pay it after reaching the state retirement age.

By hiking the rate of National Insurance, Mr Johnson has broken a 2019 manifesto pledge, when he claimed NI would not be increased. The Prime Minister has said that this is necessary due to the continuing financial fallout of the COVID-19 pandemic.

The new rates will come into effect from April 2022, and from 2023 will be shown separately on workers’ payslips as a ‘Health and Social Care Levy’. Until then, it will show as a National Insurance increase.

One of the aims of the increase to National Insurance is to help clear the backlog which has built up in the NHS because of the pandemic. This has resulted in waiting lists being at all-time highs, into the millions.

On the National Insurance hike and what it signifies for future tax changes, Ms Rosenbloom said:

“Prime minister Boris Johnson’s recent announcement introducing a new health and social care levy, which broke a manifesto commitment, demonstrates that the Government is not afraid of tax rises.

“Whether any reforms to taxes are announced next week or at a later date, the outlook as to how individuals and businesses will be taxed in the coming years is far from certain.

“There have been a number of reports published by the likes of the Office of Tax Simplification as well as an All-Party Parliamentary Group on how IHT could be reformed, which present the Chancellor with plenty of possible options for change.

“Areas of focus in the studies have included the rules on lifetime gifts, the exemptions, and the CGT-free uplift on death.

“Given the uncertain outlook for taxes, I’d encourage people to start thinking about their tax planning sooner rather than later and make the most of current allowances before any changes are introduced.

“Investing tax-efficiently and considering options such as gifting could ensure that more of your assets are passed on to family members or charitable causes.”

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More