The Salary Calculator

Emergency Budget Update

by Admin

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.

Tags: 20% VAT, April 2011, budget, coalition budget, Economy, election, emergency budget, HMRC, income tax, June 2010 budget, national insurance, Pay As You Earn, personal allowance, tax rates, The Salary Calculator, VAT

Coalition pledges to affect tax

by Admin

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!

Tags: April 2011, budget, Economy, election, HMRC, income tax, national insurance, Pay As You Earn, pension, Pensions, personal allowance, recession, recovery, tax rates, The Salary Calculator

Election come down

by Admin

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.

Tags: Economy, election, euro, Foreign Currency, foreign exchange rates, holiday, holiday money, income tax, national insurance, Pay As You Earn, pension, Pensions, personal allowance, pound, recession, recovery, tax rates, The Salary Calculator, unemployment

General Election nears

by Admin

With a General Election later this week, it’s time to find out about each of the parties and consider who would best represent you in Westminster. It’s the closest election in many years so it’s very important that we make the effort to have our say in the decision of who will govern us. The economy has been a key election topic for most of us this time around, and each of the parties have a different way of tackling the problems we face. Yes, we have come out of recession but the recovery is not yet complete – the actions of the next government will determine how we go forward from here.

In the Election Comparison Calculator I’ve tried to help show what would happen to your take home pay should we have a change of government. All the details of the calculations performed are underneath the results, explaining what the key differences between the parties are. Of course, your take home pay is not the only thing at stake – all the major parties have put details in their manifestos of how they will make other changes affecting not only your money but other aspects of your life as well.

Over at the BBC they have created a useful election tool called Where they stand. This allows you choose a topic and three parties to compare, and a summary of each party’s manifesto is displayed. You can see at a glance what the major differences are between the parties on the issues you believe are important – be it the Economy, Civil Liberties, Health or Education (amongst others).

Your vote can make a difference, this year more than ever before, so I encourage you to read up about the parties standing in your constituency and vote for who you think would best represent you. See you at the polling station!

Tags: Economy, election, income tax, national insurance, Pay As You Earn, pension, Pensions, personal allowance, tax rates, The Salary Calculator

Election Comparison Calculator launched!

by Admin

With a general election now called for 6th May, the major parties have started campaigning and promoting their policies. All have policies related to taxation, and The Salary Calculator has tried to show you what their different policies may mean to you.

The Election Comparison Calculator aims to help you see the differences between the major parties’ policies on personal income. Using the information available, the calculator estimates how their policies would affect your take home pay. As described on the Election Comparison Calculator page itself, not all the details are available at the moment, and probably won’t be until the next government holds its first budget. However, the details they have provided allow the calculator to estimate what those changes would mean to you.

All the details used to create the calculator are available underneath the results. As explained in that description, the calculator considers PAYE changes – each party also has other economic policies which may affect you in other ways, such as stamp duty or inheritance tax. Some assumptions have had to be made – if you can help provide more detailed information then please contact us. So why not try the Election Comparison Calculator and see what you learn?

Tags: 50% tax, April 2010, Economy, election, income tax, national insurance, National Insurance, Pay As You Earn, pension, Pensions, personal allowance, recovery, tax rates, The Salary Calculator