election

New – Election Calculator 2017

With a General Election on the way, The Salary Calculator’s Election Calculator has been updated with the latest campaign proposals from the main parties. This allows you to see an estimate of how the different parties’ policies might affect you if they come to power. Right now, only the 3 parties Conservative, Labour and Liberal Democrats have produced their manifestos with details of their taxation plans. When other parties such as The Green Party and UKIP reveal their plans, the calculator will be updated.

As explained on the Election Calculator itself, this is a simplified version of The Salary Calculator, and some estimates and assumptions have had to be made. Also, of course, income tax and National Insurance are only some of the ways that governments can raise revenue, and other policy proposals may affect your financial situation. With that in mind, check out the 2017 Election Calculator.

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None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

General Election Salary Calculator

As you may have noticed, there’s a General Election next month and the parties are all out campaigning. Since a major campaign point this time is personal taxation, I thought it would be interesting to compare how the main parties’ policies would affect take-home pay. You can try out the Election Salary Calculator here. This is a simplified version of the normal Salary Calculator, but if you enter your salary and a few other optional extras, it will estimate the differences in deductions for the 5 main national parties.

This is just an estimate, and not all of the details are available yet – I will update the calculator with more information as the parties provide it. I hope you find it interesting! Details of the changes are described below the results table. The BBC has a very good article explaining the parties’ positions on taxation and other policy areas.

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Emergency Budget Update

The new Chancellor of the Exchequer gave the coalition government’s first Budget today, within 50 days of the election as promised. There were a great many changes, most of which will take place from April 2011, so I have added a new row to The Salary Calculator to give an indication of what the impact might be.

Unfortunately, a lot of the figures won’t be confirmed until towards the end of this year, so I have had to make some estimates based on what was described in the Emergency Budget report. For those who want to know, details of the figures I’ve used are below. For those who don’t – you can go straight to the “April 2011” row of the Salary Calculator for April 2011 values.

Another change announced in the Budget was an increase in standard VAT rate from 17.5% to 20% effective from 4th January 2011. The VAT Calculator has also been updated so you can see what a difference this will make to purchases.

The calculations for the April 2011 values in The Salary Calculator are based on the following assumptions. Under 65 personal allowance increased to £7,475, over 65 allowance increased to £9,940, over 75 allowance increased to £10,090. Threshold of 40% tax lowered to £35,000 from £37,400. National Insurance rates increase from 11% to 12% for basic and 1% to 2% for additional, as set out by the previous government’s budget. National Insurance basic rate threshold increased to £7,475, additional rate lowered to £42,875. All other values unchanged.

Edit (5th January 2011): The values above have been updated with the latest information from the Treasury and the April 2011 calculations have been updated in line with these. The Salary Calculator will be updated again with final values in early Spring 2011, following the budget update.

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Coalition pledges to affect tax

So we’ve got a new, coalition government and they have published the details of the agreements which were reached between the Conservative and Liberal Democrat parties. As you can see in the linked article, campaign pledges from both parties were included in the agreement, reflecting the compromises necessary.

They have promised that a new budget will be announced within 50 days, which will include changes to PAYE taking effect from April 2011. These changes will include increasing the income tax personal allowance to reduce taxes for low and middle earners (although not immediately the full increase to £10,000 the Lib Dems wanted), but the employee National Insurance threshold changes the Conservatives put in their manifesto will not be included. However Labour’s planned increase in employer National Insurance will not go ahead, pleasing Conservative supporters.

Full details will not be available until the promised emergency budget, but I promise to make available as soon as possible any relevant changes to The Salary Calculator!

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Election come down

So after all the hype and canvassing and the debates, the results are in – and it’s a hung Parliament, the first since 1974. What does that mean for your money? Well, first of all, the pound has fallen against other currencies – 4 cents against the dollar and 3 cents against the Euro – bad news if you were about to go on holiday!

Why is this? In short because the value of a currency is related to how confident investors are in a country’s economy. Historically, hung parliaments in Britain are unable to act as swiftly as majority governments, because consensus must be found by the members of coalition parties – who often disagree on certain principles. These delays in acting may hinder our recovery from the recession – so investors would rather not be holding on to the pound. Of course, if it does lead to a slow recovery (or even the “double dip” recession some analysts have been predicting), then this could continue to hit us in the wallet for months to come – with the effects of the recession continuing rather than abating.

Another area that was to be decided by this election was income tax and National Insurance. As I wrote previously, all the parties had set out in their manifestos their intended changes to the PAYE system. I put these all in the Election Comparison Calculator – which shows you want impact these differences would have on you. With no party yet in charge, it’s not clear what will happen about this – whose policies will be enacted? The Conservatives, who have the largest number of seats, said they would hold an emergency budget to implement some of their changes before next year. We’ll have to wait and see to find out what really happens.

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