TAX THRESHOLD RAID?

What is better – a bird in the hand or two in a bush?

Well, that rather depends from whose perspective you’re looking at it and in the case of the Chancellor, she’s eyeing up the two in the bush like a drooling hyena. Of course I don't mean real birds but tax thresholds.

Following this morning’s surprise U turn on the proposed income tax hike, desperate revenue raising measures are now needed to a) fill the mythical black hole and b) calm the stock markets.

There may have been a collective sigh of relief at the prospect of no direct income tax increase. Hand on heart, the Government can say it hasn’t broken its election manifesto pledges but what we can’t see are the fingers crossed behind their backs. There’s still time to break the pledge big time by effecting a pincer movement on tax in the form of indirect stealth increases.

On the one hand, pushing out the freeze on income tax thresholds for another few years will drag a lot of fish into the fiscal tax net including pensioners who rely solely on the state pension for their income. Whilst not directly increasing income tax rates, it is still a tax increase nonetheless for those who previously obtained money for nothing ie no or low productivity in the workplace.

Be careful what you wish for as the second scenario of lowering the income tax threshold will hurt more than paying an extra 2p in the pound. Let me elaborate further with a couple of examples:

Let’s say we have someone who earns a gross annual salary of £20,000. If the threshold for 20% income tax remains the same at £12,570 then tax would only be paid on the difference as follows:

Current tax rate and tax threshold 

You would only pay tax on £7,430 (total income minus threshold amount) which at a rate of 20% is approx. £1,486 per annum

Now let’s look at what happens to your tax bill if the income tax rate is increased by 2p from 20% to 22% but the threshold remains frozen at £12,570:

Tax up but threshold unchanged

With an increased tax rate, this person is now paying £149 more in income tax than if the rate had remained at 20%.

However, rewind the clock to the first example. The Treasury has decided to lower the income tax threshold by £1,000 to £11,570 leaving the income tax rate unchanged at 20%. What happens now?

Tax rate unchanged but threshold lowered

As you can see, lowering the threshold has increased the amount of tax payable because the chunk of money on which tax is calculated is larger. This person is now paying £200 more in income tax than if the rates or thresholds had stayed unchanged. The difference between paying 2p more in tax or having a lower threshold means you’ll be £51 worse off.

So, if I ask the same question again – which would be better, having a slight increase in the rate of taxation or having a lower income tax threshold then what’s your answer going to be?

My third scenario also means that if the threshold were reduced by £1,000 from next April, then the Treasury would benefit earlier from the effects of fiscal drag on the recent increase to the state pension as at £12,548 this would now push ALL retirees firmly into tax territory in 2026. As well as pushing all pensioners into the tax net, any low paid or part time workers could also be swept along by the tax tide making it pointless to work at all.

Having got a taste for it, there would be nothing to stop future Chancellors lowering the personal tax threshold figure again and again until it eventually disappears in a puff of smoke.  Perhaps this is their heinous master plan after all.

Even a small tweaking of the tax threshold may have a larger negative impact on your income than raising the basic rate of taxation so before you break out the champagne and canapes then I say again be very careful what you wish for. We may have escaped the income tax frying pan only to find an inferno beneath it!

LIZ FRANKS

Right, so I paid my £95 to a private health provider to get some quality time with an Orthopaedic doctor who just happens to be one the of local NHS consultants in the matter of foot or other limb associated problems.

After a lot of poking, prodding and painful pulling about of my little tootsies, he came to the conclusion that my foot trauma was not necessarily Arthur related but more likely to be caused by yet another unwelcome visitor called Liz Franks.

According to Dr Google, a Lisfranc injury can be a sprain, fracture or dislocation affecting the joints or ligaments midfoot in the general area of arch/toes. Precisely where I get excruciating pain on putting any weight evenly across my feet when walking. Called Lisfranc after a Napoleonic surgeon who no doubt amputated many a good foot from those afflicted by this condition.

To further investigate, I’d need to shell out £300 per foot for MRI scans – the cost of a Ryanair flight to sunnier climes or a small inflatable dinghy. Blimey! I might have found enough loose change down the back of the sofa for an initial consultation but £600 is one step beyond my limited means.

Not put off by my elevated eyebrows, the good doctor recommended getting an NHS referral via my GP to circumvent my financial necessity which as we all know translates into ‘it’ll be some time before we meet again’.

If I'm lucky, I may get passed over to Dr AI who at the speed of light may also be able to review all my other aches and pains as a holistic whole rather than piecemeal thus returning a more accurate diagnosis.  Had I identified as a horse then it would no doubt be a case of take her out into a field and shoot her but fortunately I'm feeling sleepy dormouse today so phew!

And so, dear readers, as I navigate the wonders of our surgery’s new online appointment system to request the suggested referral, I can only hope my foot hasn’t dropped off before I get to see the Orthopaedic chappie again.

ARTHUR RITIS

A while back I posted about the arrival of that most unwelcome guest Mutton Jeff but now it seems his long-lost cousin Arthur Ritis may have turned up on my doorstep.

For some time now I’ve been plagued by intermittent foot ache. These inexplicable aches and pains are not muscular in origin but deep down in the bone, largely in the joints below the big toe or across the top of the in-step.

It’s often said that people can forecast changes in the weather from the twinges in their feet. Maybe there’s some truth in this because it seems that when cold or damp are in the air, my feet telegraph their arrival with a medical morse code of their own.

By chance, I injured my right foot back in March resulting in an equally painful condition called PTTD - Posterior Tibial Tendon Dysfunction. This is a condition where the tibialis posterior tendon which supports the arch of the foot becomes inflamed and degenerates eventually leading to arch flattening and pain especially along the inner ankle.

At the time of my consultation with the physiotherapist at our local Musculoskeletal Clinic I raised the topic of bone pain and was advised thus:

The NHS no longer sends patients with suspected arthritis off for X-rays or blood tests because everyone suffers from one form or other of arthritis as they age largely due to wear and tear of joints. And in any case, even if you DID happen to have arthritis there’s no treatment other than to take painkillers then grin and bear it so hop it. Quite literally.

This ‘sorry no can do’ refrain is becoming the ever-increasing go to statement of the NHS. NO you can’t have a Covid jab. NO we can't give blokes a prostate screening test.  NO we can’t do anything about your dodgy neck or ropey feet. NO we can’t give you any of the latest medications for dementia etc. 

In fact, NO is probably the most widely used word in the medical profession today. It’s no wonder the younger generation are resorting to private practice because what else is there to do?

Now I don’t know about you but when someone says ‘NO’ to me without sufficient justification that’s like red rag to a bull and usually results in my charging off like a mad cow that’s been bitten by a tubercular badger (sorry Brian). Yep, I’ve followed the herd and booked a private consultation with an orthopaedic specialist for advice on how best to deal with Arthur.

Of course, what perhaps Two-Tier Health Kier or his crony Wes don’t realise is that eventually if everyone in the land resorts to private medicine it’s likely to result in NHS services having to close due to lack of patients. No point building new hospitals unless you’re going to lease them to the private sector because they’ll be empty.

I can’t even chant ‘people before profit’ in this post as the NHS should be a non-profit making organisation that is there to serve the nation but it all boils down to money – the lack of plus accusations that in the past the NHS has been guilty of over-diagnosis and over-medication of the population. Naturally, it’s knee jerked completely to the opposite extreme by not diagnosing or treating anything leaving everyone suffering in the meantime.

I may as well open up a boarding house for all those other unwelcome health visitors likely to darken my door in the coming years. Right, let's see who else might be coming to town. Ah, there’s Dee Menshia, Al Zeimer, Lee Kee Bladda, Kid Neeinfection, Kat Aracts, Nee Payne and her bro, Ken Hip.

With all of these lovely guests to look forward to, one thing's for sure at least I’ll never be lonely!

WAFFLE BOMB

There’s a new kind of dessert in town called a Waffle Bomb that’s not to be trifled with.

Waffle Bomb - guaranteed to make you feel sick

A Waffle Bomb is one of those puddings whose appearance trumps substance. Having been concocted for the greater good of the nation, it’s not sugar coated, lacks chocolate, whippy cream or sprinkles and is in fact devoid of any palatable ingredients. In short, you’d be better off eating your own leg rather than this piece of puff.

Which is what we’ll all be doing after the 26th November if Rachel from Accounts goes ahead with her hinted income tax rise. The tabloids are already suggesting 2p in the pound more on rates of income tax but don’t clarify if this will be across all tax bands or just the highest. Rumours suggest this increase may be offset by a 2p reduction in National Insurance contributions.

In essence, anyone not working (pensioners, landlords, etc) but with annual income of over £12,570 which these days is pretty much everyone will be forced to consume the Waffle Bomb but those paying NI can pass on dessert since their tax position will almost be netted out.

I can already foresee a mass exodus particularly of part time/semi-retired workers like myself who earn just above the personal allowance threshold preparing to leave employment in order to mitigate future tax bills. It just won’t be worth earning anything over £12,570 if you have to continually give more of it away to the Treasury. Cash in hand will be king. Growth and productivity will drop like a lead balloon.

I’m throwing out all of my old padded retro 80’s jackets because there appears to be a perception out there that those with the broadest shoulders are retired baby boomers. Shoulder pads are out! Clearly, Rach seems to think our ‘gold plated’ private pensions are there to solve all her economic woes forgetting how many long hours (and wage tax) most of us had to put in in order to reap the rewards in later years. I feel its double taxation however you look at it.

If the additional revenue raised was to be spent wisely fixing any number of the ‘broken’ systems faced by the UK, it would make the Waffle Bomb easier to swallow but when you read populist press articles about how much is being squandered on debt repayment, propping up ailing industries, compensation payments for national scandals, handouts to foreign countries (France & Rwanda), leasing Diego Garcia from Mauritius, net zero – the list is lengthy, costly and doesn’t sit well with those struggling to make ends meet.

I’ve never really had a sweet tooth so Waffle Bombs won’t be a menu choice and in the new year, I’ll certain be looking into how I can follow a ‘low tax’ dietary regime.