UK Budget – National Insurance

09 12 2009 Mr Darling raises National Insurance in pre-Budget report although the point at which National Insurance starts will be raised so that no-one earning less than £20,000 will pay it. 10 12 2009 Mr Darling wanted to impose a VAT rise above 17.5% in his pre-budget report to raise extra revenue but was persuaded by Mr Brown to opt for an increase in National Insurance instead, Government sources disclosed today. A 1% rise in national insurance raises a total of £4.48bn in a full year whereas a 1% rise in VAT by contrast raises slightly more at £4.8bn.

 

The HM Revenue & Customs (HMRC) handle National Insurance Contributions which are credited into National Insurance accounts which then become payable by those claiming benefits like Incapacity Benefit or a long term benefit such as Basic State Pension.    

 

Opinion: The abolition of the 10p tax rate caused quite a stir for Mr Brown in his final budget as chancellor in 2007 yet now the issue seemingly is simply one of which % number to raise, VAT or NI, to offset huge debt. Given that the Election Horses be lining-up soon for the same old tiring race to swop saddles fields of carrots are needed to concentrate minds as to a particular winner. Although Mr Darling proposes that those earning less than £20,000 be free of paying NI (carrots) is the Gov to automatically credits their NI accounts such that they retain entitlement to a Basic State Pension or are they later to discover, after an election, that the Banks / Financial Institutions will be knocking at their doors selling them top-up Pensions and Insurance packages?.

New Labour, having out-sourced much of everything, has sat back in observance of spiraling profits and increasing dividends while rubbing its hands together as to the toil of others paid bonuses, while it collected a “cut” through taxation – all while prices rose through competition. Now that that tide of wealth has been “washed away” the Gov itself now needs to become actively involved once again as those left on the seabed come back into focus. On the matter of National Insurance and Pensioners in the Feb of 2009 it was announced that some £5,000,000,000 went unclaimed by pensioners following which some 4 months later, Civil Servants awarded themselves some £<?xml:namespace prefix = st1 />26,000,000 in bonuses. Some 4 months later still, it’s announced that 1,500,000 pensioners are paying too much tax due to computer processing errors that require computer systems to be upgraded to improve accuracy. New Labour proposes a “Digital Britain” having compromised millions of taxpayers personal data through Gov Departmental loss yet how strange that come election time how numbers somehow tend to take on a different meaning as to importance.  

 

News Titles:

10 02 2009 £5bn pensioner benefits 'unclaimed'.

17 06 2009 Civil servants paid £26m in bonuses.

14 07 2009 Elderly to take out care insurance – proposal

23 10 2009 HM Revenue and Customs upgrade computer systems to pay pensioners.

 

Old News

10 02 2009 £5bn pensioner benefits 'unclaimed'.Pensioners are failing to claim up to £5 billion of benefits they are entitled to every year, a charity has said. The charity is calling on the Government to automatically pay benefits to those who are entitled to them, rather than forcing people to go through the "convoluted claims process". It said 80% of older people thought the Government should pay their benefits to them without them having to submit a claim. Each year up to £1.51 billion in council tax benefit and £770 million in housing benefit goes unclaimed, with people also missing out on £2.81 billion of Pension Credit. A further 350,000 older people are also not claiming housing benefit.

 

17 06 2009 Civil servants paid £26m in bonuses.Senior civil servants were awarded "bonuses" totalling £26 million last year, it has been reported. Lib Dem treasury spokesman Lord Oakeshott, who compiled the figures from answers to parliamentary questions, said that he was "amazed" at the scale of the awards. Lord Oakeshott said: "Top civil servants get a very good salary averaging £1,500 a week and an excellent index-linked pension. Why do they need £200 a week extra just to get out of bed in the morning - more than many pensioners?"

 

14 07 2009 Elderly to take out care insurance – proposal. Older people in England could be asked to take out insurance to pay for long-term care in their old age. Under the present English system anyone with a home or savings of £23,500 or more is not given state funding for a care home, or help from social services. This means that thousands of pensioners each year have to sell their homes or use their savings to fund their long-term care, which critics say is unfair and unsustainable.

 

23 10 2009 HM Revenue and Customs upgrades computer systems to pay pensioners. 1.5m pensioners 'pay too much tax'. The NAO said errors occurred because the tax situation for pensioners was often more complicated than for the rest of the population and HM Revenue and Customs struggled to cope. A spokesman for HM Revenue and Customs said "During the last few months we have significantly upgraded our computer systems to improve accuracy and deliver a better serviceto older taxpayers. Some 1.5 million older people over-paid income tax due to processing errors, while about 3.2 million were failing to take up their allowance entitlements, the watchdog found.

 

10 12 2009 Mr Darling wanted to impose a VAT rise above 17.5% in his pre-budget report to raise extra revenue but was persuaded by Mr Brown to opt for an increase in National Insurance instead, Government sources disclosed today. A 1% rise in national insurance raises a total of £4.48bn in a full year whereas a 1% rise in VAT by contrast raises slightly more at £4.8bn.

 

Other related News

 

04 06 2008 Chancellor faces 10p tax grilling. Chancellor Darling to face a grilling from a senior House of Commons committee over his effort to offset the impact on some of Britain's poorest households of the decision to abolish the 10p starting rate of income tax. He bought off the rebels with a surprise "mini-budget" on May 13, which delivered a £120 boost to 22 million families through changes in tax thresholds, but still left some 1.1 million low-income taxpayers worse off. Labour lost in the Crewe and Nantwich by-election the following week giving a safe seat to the Conservatives. The abolition of the 10p rate was first announced in Gordon Brown's final Budget as Chancellor in 2007.