More Evidence Of Low Wages

[Snugglybear]

From the Beeb

http://www.bbc.co.uk/news/business-29587711

Income tax is likely to fall short of the government's target for this financial year despite record employment, the Office for Budget Responsibility (OBR) has warned.

The UK budgetary watchdog said many new jobs were low paid or created through low-paid self-employment.

OBR chairman Robert Chote told the BBC fewer revenues were coming in for each new pound earned.

The first £10,000 earned a year is free from income tax.

Figures from HM Revenue & Customs show that of the growing number of people who work for themselves, 35% earn less than £10,000 a year.

More at link

[Bill D'arblay]

From the Beeb

http://www.bbc.co.uk/news/business-29587711

More at link

The story makes it clear that they realise that this is due to more and more low paid jobs and 'self-employment' under £10k.

However, just like the nonsense and clichéd terms like 'Cold Snap', 'Pension Pot' and 'Housing Ladder' they keep referring to 'record high employment'.

Are they just stupid, lazy or both?

[durhamborn]

Like we have been saying for two years on here.

Go on dole,get sanctioned,workfare,abused,and treat like dirt.

Go self employed.Get tax credits,fill in form once a year.Work if you want to or not,but with the tax credit clawback starting around £6400 a year make sure you earn less than that.

The say 35% of the self employed earn less than the tax free allowance up from 20%.Id bet there is a big bump around £5k to keep under tax credits means test.

People know there is no point working unless you have a really good job.Far better go self employed and get tax credits.

For other people without children who might have paid off their mortgage etc and have a bit of income from investments better to only work up to £10k tax allowance and enjoy more free time.

People know there is little reward for hard work in the UK now.Might as well have more free time.

Not to worry.IDS said Universal Credit will sort things out and people will go to work for 40 hours for an extra £10,

[19 year mortgage 8itch]

Like we have been saying for two years on here.

Go on dole,get sanctioned,workfare,abused,and treat like dirt.

Go self employed.Get tax credits,fill in form once a year.Work if you want to or not,but with the tax credit clawback starting around £6400 a year make sure you earn less than that.

The say 35% of the self employed earn less than the tax free allowance up from 20%.Id bet there is a big bump around £5k to keep under tax credits means test.

People know there is no point working unless you have a really good job.Far better go self employed and get tax credits.

For other people without children who might have paid off their mortgage etc and have a bit of income from investments better to only work up to £10k tax allowance and enjoy more free time.

People know there is little reward for hard work in the UK now.Might as well have more free time.

Not to worry.IDS said Universal Credit will sort things out and people will go to work for 40 hours for an extra £10,

Mr DB,

Are self employment tax credits given on an individual assessment or a household/family assessment?

Can you take that route additional to a part time job earning approx £5,000 pa?

[Snugglybear]

Mr DB,

Are self employment tax credits given on an individual assessment or a household/family assessment?

Can you take that route additional to a part time job earning approx £5,000 pa?

Working tax credits are calculated on the basis of household income.

[durhamborn]

They are worked out on a household if a couple or individual if living with parents/none partner etc.

The self employed route simply means you get full tax credits as long as you keep earnings below £6400 a year.

So a family with 2 children,1 down as ADHD would get £300 a week tax credits,full housing benefit,be able to keep all of any earnings up to around £100 a week and never have to sign on ever.

Not 1 of the run of the mill jobs near me pay anywhere near that.Around half that amount of income on a full time 40 hour week.

Edited October 13, 2014 by durhamborn

[Snugglybear]

They are worked out on a household if a couple or individual if living with parents/none partner etc.

The self employed route simply means you get full tax credits as long as you keep earnings below £6400 a year.

So a family with 2 children,1 down as ADHD would get £300 a week tax credits,full housing benefit,be able to keep all of any earnings up to around £100 a week and never have to sign on ever.

Not 1 of the run of the mill jobs near me pay anywhere near that.Around half on a full time 40 hour week.

'Course they'd only get that if one was ADHD* and until the youngest kid hits 18. After that, they're on their own.

*their chances are not good - approximately 2.4% to 3% of children have ADHD

[19 year mortgage 8itch]

They are worked out on a household if a couple or individual if living with parents/none partner etc.

The self employed route simply means you get full tax credits as long as you keep earnings below £6400 a year.

So a family with 2 children,1 down as ADHD would get £300 a week tax credits,full housing benefit,be able to keep all of any earnings up to around £100 a week and never have to sign on ever.

Not 1 of the run of the mill jobs near me pay anywhere near that.Around half that amount of income on a full time 40 hour week.

"Separation" is an option but the losing the part time job, an awkward 10ish hours a week is not.

Neither are the kids mental.

[durhamborn]

'Course they'd only get that if one was ADHD* and until the youngest kid hits 18. After that, they're on their own.

*their chances are not good - approximately 2.4% to 3% of children have ADHD

Agree Snugglybear.Its a trap,but a trap many fall into.Thats why tax credits were/are a disaster.They hide the fact wages are falling in real terms.Many people find their income falling off a cliff in their mid 40s due to loss of tax credits.It is the reason income tax is going down while employment (self employment mainly) goes up.

[interestrateripoff]

Bugger didn't see this.

Although isn't this what everyone on here is expecting high paid jobs being replaced by low paid ones?

The low paid recovery to sustain ever increasing house prices.

[Damik]

The story makes it clear that they realise that this is due to more and more low paid jobs and 'self-employment' under £10k.

However, just like the nonsense and clichéd terms like 'Cold Snap', 'Pension Pot' and 'Housing Ladder' they keep referring to 'record high employment'.

Are they just stupid, lazy or both?

Plus working tax credits ....

[Snugglybear]

The Torygraph, BTW, is reporting this with the subheading "Black whole in Britain's public finances is likely to widen as tax take fails to pick up despite falling unemployment".

[Errol]

Exactly the same thing is happening in the US.

Middle-range/good jobs slowly disappearing, and being replaced by low paid, part-time jobs.

Still, all of this is a clear sign of recovery so nothing to worry about.

Edited October 13, 2014 by Errol

[shindigger]

Im self employed with stash above any threshold. Not worked (or claimed anything) since Feb.

Everywhere i look online, i see that Tax Credits are means tested.

Yet people on here assert the opposite.

Can anyone comment?

Thanks.

Edit

I should add that as per my earlier comment, based on previous earnings i do think the gubmint will owe me a fair chunk back in te coming months. Is that the mechanism by which i get "paid". Im guessing any rebate would and should be in addition to this credit business.

I'm, happily, fairly naive when it comes to the beno...

Edited October 13, 2014 by shindigger

[durhamborn]

Tax credits are means tested on income/earnings NOT on assets/ capital.I know someone whos ex husband gave her £3 million when he sold his business last year and shes getting tax credits.She is down as a self employed beauty technician and does a few hours in her friends salon,mainly for the gossip.

Under Universal Credit this will change as capital counts.However thats very unlikely to ever come in.Amazing isnt it that someone working 40 hours a week at around £7.50 is paying tax to give to someone with a £350k house paid for,£3million in the bank and an ex husband who sold a business for £17 million.

[shindigger]

Thanks for that but i've just been through the turn2 us calculator and am getting nowt.

Tell a lie, £4.92 council tax rebate.

I then input same details, but with zero stash, and it spat our £67.00

Don't get it. It appears very much means tested as far as i can see.

http://www.turn2us.org.uk/benefits_search.aspx

Edited October 13, 2014 by shindigger

[jammin35]

Tax credits are means tested on income/earnings NOT on assets/ capital.I know someone whos ex husband gave her £3 million when he sold his business last year and shes getting tax credits.She is down as a self employed beauty technician and does a few hours in her friends salon,mainly for the gossip.

Under Universal Credit this will change as capital counts.However thats very unlikely to ever come in.Amazing isnt it that someone working 40 hours a week at around £7.50 is paying tax to give to someone with a £350k house paid for,£3million in the bank and an ex husband who sold a business for £17 million.

I think your friend may be lying.

Once you have £16k in capital, the amount you get drops off rapidly.

Source: my ex wife, who has now pissed the proceeds of the sale of the ex family home up the wall, and is living the life of luxury by virtue of the fact that the £1500 she gets in maintenance from me has no effect on the tax credits, housing benefit and council tax benefit that she and jobless boyfriend get.

[Liquid Goldfish]

I think your friend may be lying.

Once you have £16k in capital, the amount you get drops off rapidly.

Source: my ex wife, who has now pissed the proceeds of the sale of the ex family home up the wall, and is living the life of luxury by virtue of the fact that the £1500 she gets in maintenance from me has no effect on the tax credits, housing benefit and council tax benefit that she and jobless boyfriend get.

Tax Credits are not affected by capital

Other benefits like JSA, IS and ESA are though.

Although tax credits are means-tested, they have no capital limit. This means there is no amount of savings that will automatically stop you being able to claim tax credits. Income from capital/savings can however be taken into account so as to reduce the amount of your award.

[durhamborn]

Tax credits are NOT means tested on capital.They are means tested on income.If the income goes above £6400 a year they start to be means tested away.So the income from capital counts but not the capital.Income Support etc are means tested as is Housing Benefit etc.That is where the £16k rule works.That is one of the big changes in Universal Credit.It uses the same capital rules as Income Support etc so UC will be means tested away on income and/or capital.Tax credits are not.The only things that matter are claimed hours of work and income.Not capital.

There are many millionaires claiming tax credits.

[shindigger]

Just been through the HMRC calculator. It doesn't actually ask for a capital figure. So now agree that its clearly not means testing any assets.

Helps if you use the right website rather than a 3rd party one. Which i think was assessing me for Income Support.

It seems that my last years profit after tax, is too high to be paid anything in this tax year.

Even though i've not worked, or had any other dosh coming in since Feb.

If i drop the figure to £10k profit for the same period, (Apr 13/14) it dishes out £600 odd quid.

I have to pay about £3k in tax based on last year this coming Jan, so hope this will balance up as the next 18 months plays out.

Am i missing something?

[Snugglybear]

And in today's news, a headline from the Grauniad

http://www.theguardian.com/business/2014/oct/14/shopping-levels-fall-british-retail-consortium

The weakest underlying performance by high street and online stores since the depth of the 2008-09 recession provided fresh evidence on Tuesday of a slowdown in the economy.

An unusually warm September, the continued weakness of spending in supermarkets and a dip in the rapid growth of internet sales meant spending dropped sharply last month, the British Retail Consortium said.

In its monthly health check conducted jointly with KPMG, the BRC said total sales were 0.8% lower in September 2014 than in the same month a year earlier. The year-on-year drop in consumer spending was the most pronounced since December 2008, apart from months affected by the timing of Easter.

More at the link, including everybody casting about for reasons.

They could perhaps try "lots and lots of people have falling incomes (in both real and nominal terms) and rising unavoidable costs, meaning they have less money to go shopping.

It's hardly rocket science.