Random useful thoughts

In the last post I looked at how much of your pay check goes into national insurance and tax both in absolute value and percentage. In this post I look at how much it is possible to claim in tax credits and how this would have changed under the now scrapped cuts proposed in the summer. The tax credit system as a whole is pretty complicated and there are many rules and regulations about who can claim etc. There are also added complications when situations change during a year, for example due to change in earnings or birth of a child. I will not look at the complicated edge cases but rather some simple situations so that trends can be seen. I am also not in any way an expert in taxes, in fact I have spend the vast majority of my life in education and therefore not paying any tax. Furthermore even though I currently have a job and pay tax it is in Germany, so I have no first hand experience. This study is purely for curiosity's sake. To accurately calculate your own claim to tax c...

Since the UK general election in May there has been a lot of discussion about tax credits and whether the proposed cuts would make the poorest worse off. On one side the government says that the increase in minimum wage to the living wage  as well as an increase in the tax free allowance would make low earners better off, whereas the critics point to the fact that a £4.4 billion cut has to have a detrimental effect. The proposed cuts were passed in the conservative lead house of commons, but was blocked by the house of lords, where the government does not hold a majority. As a result the Chancellor of the Exchequer, George Osbourne, announced in the Spending Review that the proposed cuts would not go ahead. At the time there were a lot of figures being thrown around about who would be better and worse off, but mainly used by people with an allegiance to a particular group or political party. As I wasn't sure who to trust I decided to take a look at the numbers myself as a no...