Shorter Reads

Johnson proposes £3,000 tax cut for higher earners

1 minute read

Published 10 June 2019

Authors

Share

Key information

Johnson’s announcement of his proposed tax cut is certainly grabbing the headlines but it is worth pausing to reflect on the ways it might impact professional advisors and their clients.

Journalists quick out of the gates this morning have estimated that raising the threshold at which 40% income tax is paid from £50,000 to £80,000 will save an individual earning £80,000 per year around £3,000. Indeed, for pensioners the cut could be even more beneficial, with estimated savings of up to £6,000 due to the fact that pensioners will not be liable for the increase in National Insurance which is feted to accompany the cut to help pay for it.

With more take-home pay in their pockets, tax payers may feel less inclined to take advantage of tax mitigation opportunities such as Gift Aid or maximising their pension contributions.

One can be confident that Mr Johnson and his team have rigorously focus-grouped the proposed plan, but it is worth noting that the tax cut is not being achieved by lowering the income tax rates, which Mr Johnson’s rival for the Conservative leadership Dominic Raab suggested only last month, but instead raising the threshold at which higher rate income tax is paid.

https://www.bbc.co.uk/news/uk-politics-48577579

Related latest updates
PREV NEXT

Arrow Back to Insights

Shorter Reads

Johnson proposes £3,000 tax cut for higher earners

Published 10 June 2019

Associated sectors / services

Authors

Johnson’s announcement of his proposed tax cut is certainly grabbing the headlines but it is worth pausing to reflect on the ways it might impact professional advisors and their clients.

Journalists quick out of the gates this morning have estimated that raising the threshold at which 40% income tax is paid from £50,000 to £80,000 will save an individual earning £80,000 per year around £3,000. Indeed, for pensioners the cut could be even more beneficial, with estimated savings of up to £6,000 due to the fact that pensioners will not be liable for the increase in National Insurance which is feted to accompany the cut to help pay for it.

With more take-home pay in their pockets, tax payers may feel less inclined to take advantage of tax mitigation opportunities such as Gift Aid or maximising their pension contributions.

One can be confident that Mr Johnson and his team have rigorously focus-grouped the proposed plan, but it is worth noting that the tax cut is not being achieved by lowering the income tax rates, which Mr Johnson’s rival for the Conservative leadership Dominic Raab suggested only last month, but instead raising the threshold at which higher rate income tax is paid.

https://www.bbc.co.uk/news/uk-politics-48577579

Associated sectors / services

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up
    ExpandNeed some help?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.



      Business Close
      Private Wealth Close
      Hot Topics Close