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Tax On Savings

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Guest mattsta1964

I've been discussing the 2008 elections with some Americans and they seem shocked that we in the UK are taxed on our savings.

This is something I really struggle with.

You pay your income tax and your NI contributions and then you are taxed again on your savings.

Am I alone in thinking this is an utterly repellant situation?

There's a lot of discussion about how and where to invest our money to reduce our tax burden but nobody has really protested about the whole concept of taxing money that has already been taxed as income

How can it be right that we are taxed on our savings? How can we have allowed the fekkers to get away with it? The mind boggles

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Guest Shedfish

this year was the first time ever that i hit the 40% bracket while having savings. my tax take this year has left me feeling violated - i regard this as nothing less than theft, and it's completely changed my outlook. i've always paid my dues.. from here on in though, i will find any way to avoid further theft

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this year was the first time ever that i hit the 40% bracket while having savings. my tax take this year has left me feeling violated - i regard this as nothing less than theft, and it's completely changed my outlook. i've always paid my dues.. from here on in though, i will find any way to avoid further theft

Cheat lie and steal wherever possible - because that`s what the government does to you :(

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this year was the first time ever that i hit the 40% bracket while having savings. my tax take this year has left me feeling violated - i regard this as nothing less than theft, and it's completely changed my outlook. i've always paid my dues.. from here on in though, i will find any way to avoid further theft

If you manage to save so much money that your "extra 20%" tax donations equal £2000 or more in a given year, you're required to make payments "on account", i.e. in advance of the end of the tax year.

Nice.

Edited by AvidFan

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Guest mattsta1964
this year was the first time ever that i hit the 40% bracket while having savings. my tax take this year has left me feeling violated - i regard this as nothing less than theft, and it's completely changed my outlook. i've always paid my dues.. from here on in though, i will find any way to avoid further theft

This has happened to me too and as a contractor, it hurts even more because as I approach the end of the tax year, I get hit with a horrendous tax take

Theft is the right description! I'm not rich for fekks sake. People like you and me shouldn't be paying tax at the higher rate

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If you're in the 40% tax bracket, index linked savings certs, which are tax free, are a much better bet. RPI + the basic first year return of an additional 1.1% means you're on for 5.6% tax free - more than a lot of the ISAs out there.

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Guest Charlie The Tramp

The cleverest move all Governments have done is to tax savings at source. I know a guy who claims the tax back on his savings every year and does not get interest from HRC for borrowing his money for 12 months.

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I put a fair amount in a CITRA account and everything was going well until this year. I'm used to them "resetting" my tax code to remove the allowance my CITRA deposit buys me, but this year, they'd actually abolished the tax allowance "code" they use for this type of relief.

Consequently, every time I phoned them to make sure my tax code was adjusted upwards, they always said they'd done it, but their computer system later threw it out. It was only after I pushed and pushed my local tax office was it that they agreed to add the allowance as "general expenses". Otherwise I'd have been running without an uprated tax code and reclaiming after the end of the tax year, which obviously reduces the gain from having such an account...

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I put a fair amount in a CITRA account and everything was going well until this year. I'm used to them "resetting" my tax code to remove the allowance my CITRA deposit buys me, but this year, they'd actually abolished the tax allowance "code" they use for this type of relief.

Consequently, every time I phoned them to make sure my tax code was adjusted upwards, they always said they'd done it, but their computer system later threw it out. It was only after I pushed and pushed my local tax office was it that they agreed to add the allowance as "general expenses". Otherwise I'd have been running without an uprated tax code and reclaiming after the end of the tax year, which obviously reduces the gain from having such an account...

What the f//k are you talking about.

[Moderator warning: This is your second insult in as many minutes on your first evening of posting, you will not be warned again.]

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Taxation is pragmatic rather than moral.

Consider a few cases:

person A inherits a million quid, puts it in the bank and lives off the 50k pa it earns

person B does the same, except he saved the million quid out of earnings

person C works a regular job that pays 50k pa.

Why should person C pay tax when A and B don't and when C is the only one doing any work? As for any difference between A and B, who's to say that A's parent's didn't pay tax on the money, or that the death duties didn't represent a reasonable final settlement? Let's face it, tax--the forcible confiscation of wealth--cannot possibly be fair.

Luckily, the saver/investor can always choose tax-free or tax-efficient instruments and investments. The worker has fewer options.

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I've been discussing the 2008 elections with some Americans and they seem shocked that we in the UK are taxed on our savings.

This is something I really struggle with.

You pay your income tax and your NI contributions and then you are taxed again on your savings.

Am I alone in thinking this is an utterly repellant situation?

There's a lot of discussion about how and where to invest our money to reduce our tax burden but nobody has really protested about the whole concept of taxing money that has already been taxed as income

How can it be right that we are taxed on our savings? How can we have allowed the fekkers to get away with it? The mind boggles

This is a very good question !!

Maybe store your wealth in a format that is not taxable or outside the country...?

Its could also be time for everyone to start looking at forms of income that are non taxable or off shore as its only going to get worse. The nanny state will start to loose more and more power as the global economy goes information based (cyber). Taxes will rise as the government will need to raise more money as less people pay tax into the fascists coffers because they are earning outside the boundaries of the country they live in. Hence why more and more stealth taxes are being created such as rubbish tax, green taxes...

And what better person to tax you than Gordon 'ugly disgusting creature' Brown.

well said mattsa, what right do they have to tax on money thats already been taxed ? NONE !!!

Edited by debtfree

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you only pay tax on savings interest so to say you have already paid tax on it isn't true

not sure what the problem is - the big problem is the tax breaks btls get

I think the problem was the missunderstanding of tax on savings vis tax on interest on savings, however, me and the missus have a bank account in Greece and they did indeed want to tax the amount in the account at a given point once yearly at the rate of 10%, unless you could provide proof that you were a resident of another country. Something to do with Greeks being great tax dodgers and non Greeks possibly money laundering, apparently.

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I've been in the 40% bracket for the last 4 years, through PAYE, and not once has the inland revenue asked me to self-assess or checked my income from savings. Do they just not bother when your tax is straight forward? Then again, I haven't claimed the extra relief on pension contributions, so it's probably swings and roundabouts.

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I've always thought that the government should only tax savings on the section that makes above inflation (as measured by some meaningful statistics). It's totally underhand that you get taxed on 6% savings when inflation is genuinely running at well above this.

Buckers

That would help concentrate the Government's mind on reducing inflation!

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I've been discussing the 2008 elections with some Americans and they seem shocked that we in the UK are taxed on our savings.

This is something I really struggle with.

You pay your income tax and your NI contributions and then you are taxed again on your savings.

Am I alone in thinking this is an utterly repellant situation?

There's a lot of discussion about how and where to invest our money to reduce our tax burden but nobody has really protested about the whole concept of taxing money that has already been taxed as income

How can it be right that we are taxed on our savings? How can we have allowed the fekkers to get away with it? The mind boggles

Why does this tax, in particular, concern you so much?

It's always been a myth that once you've paid income tax on your earnings you don't pay any more tax. This is nothing new - it's always been so. Most of your purchases have an element of tax - what about car fuel, heating fuel, furniture and fittings for your house. You could even say that your supermarket purchases have an element of tax because the companies are paying corporation tax etc out of your money.

In any case, any sensible person will have taken advantage of the generous tax allowances available to the average investor. If you're into investment in a really big way, you can afford the advice needed to continue avoiding tax.

"How can we have allowed the fekkers to get away with it?" By not coming up with adequate and effective arguments to convince our fellow electors that the taxes you loathe should be stopped. If you feel that strongly about it, go out there and try. Most people dislike one tax or another - all you've got to do is convince people that this particular tax is somehow less justifiable than all the others. Good luck! You'll need it.

p

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