Featured post

BENEFITS FOR WIDOWS AND CHILDREN SLASHED

New widows and their children will get thousands of pounds less benefit from April as the Government reorganises the way they are paid. ...

Monday, 24 September 2012

BEST LEARN YOUR PLACE

UPDATE 4 MARCH 2015
Andrew Mitchell agrees to pay PC Rowland £80,000 in damages for falsely accusing him of lying. Mitchell will also have to pay some or all of Rowland's costs which are still to be determined. More here.

UPDATE 27 NOVEMBER 2014
Mr Justice Mitting ruled in the High Court today 27 November 2014 that Andrew Mitchell did use the word 'pleb' and that the account of what he said by PC Toby Rowland was substantially true. 

"I am satisfied at least on the balance of probabilities that Mr Mitchell did speak the words alleged or something so close to them as to amount to the same including the politically toxic word pleb."

Mitchell was suing The Sun newspaper for a September 2012 report in which it alleged he said to police who would not let him ride his bicycle through the vehicle gate 

 "Best you learn your fucking place - you don't run this fucking country - you're fucking plebs."

PC Toby Rowland was present at the time and wrote the words in his notebook. He counter-sued when Mitchell effectively called him a liar who had made the words up. Although Mitchell admitted to using the word 'fucking' he denied using the word 'pleb'. 

But the judge said PC Rowland "was not the sort of man who would have had the wit, imagination or inclination to invent on the spur of the moment an account of what a senior politician had said to him in temper".

Full judgment 

UPDATE 10 JANUARY 2014
PC Keith Wallis admitted he lied when he gave an account of Andrew Mitchell's confrontation with police at Downing Steet. He was not present. He pleaded guilty in court to misconduct in public office and will be sentenced later.

UPDATE 16 OCTOBER 2013
Evidence is growing that the police fitted up Andrew Mitchell after the incident with his bicycle at Downing Street more than a year ago. Deciding between two competing accounts by a politician and a police officer is always difficult. But clearly the recording of the meeting between Mitchell and the Police Federation three days after the event shows the officers' account of it given immediately afterwards to the press was not correct. When they gave it they did not know Mitchell was recording it. The Independent Police Complaints Commission has criticised the three officers concerned and the lack of disciplinary proceedings against them http://www.bbc.co.uk/news/uk-24536328

UPDATE
At the end of March 2013 Andrew Mitchell issued libel proceedings against the Sun newspaper for its story about these events.
___________________________________

It is the first clause in the newly published verbatim rant of Chief Whip the Rt Hon Andrew Mitchell MP which I find the most offensive. To a police officer doing their job and following the security rules they had been told to follow – ‘Best you learn your f------ place’. Oh dear.

The real damage of this whole episode is, of course, the class one. We rule, you are ruled, oozes from every word. And not because we are elected, just because of who we are. Few things could be more damaging to the present Government.

Of course, Mr Mitchell (as he likes to be addressed) is correct that the police ‘don’t run the f------- Government’, and we would all fight (I hope) to keep it so, even avowed pacifists like me. But, appointed by us and given rules on security to keep our elected members safe, the police officer at that barrier did have the right to tell him which gate he was allowed to use. However annoying those petty rules may be, politicians of all people should follow them. If they want the rules changed then they have the power to make that happen.

And as for ‘you’re all f------- plebs’, that is a word that will haunt Mr Mitchell as long as he is in politics. Because it fits precisely the tone of the rant. In Rome ‘plebeians’ meant the mass of the people as opposed to the patrician class who ruled them. Back to ‘learn your place’. Sorry, ‘learn your fucking place’. I don’t wish to misquote the Rt Hon Andrew Mitchell MP.

Before the apparently full account by the officer was published in The Daily Telegraph dated 25 September, Mr Mitchell said "I am very clear about what I said and what I didn't say and I want to make it absolutely clear that I did not use the words that have been attributed to me." He also apologised again.

The Daily Telegraph account http://goo.gl/J2sV1

FREE ENERGY SAVING

As it gets colder million of us worry about heating bills for the coming winter. But governments and the energy companies have money to get rid of to help us save energy. Some of these schemes offer free insulation for every householder regardless of their income or circumstances.

You should apply soon - some schemes close at the end of September. The deals may not be repeated next year.

One quick way to find out what you can get is to call the Energy Saving Trust on 0300 123 1234. It will tell you what help is available locally as well as details of the schemes for everyone run by energy companies as well as the schemes in England, Scotland, Wales and Northern Ireland run by national governments and assemblies. The service is free and impartial. More at www.energysavingtrust.org.uk

Energy companies
In Great Britain the big six energy companies all have schemes that provide insulation free. They normally cover loft and cavity wall insulation in suitable homes. The average saving on fuel bills is reckoned to be £175 a year for loft insulation and £135 a year for cavity wall insulation. These are standard industry average figures and your own experience may be different.

British Gas, EDF, Scottish Power, and SSE will insulate any home in Great Britain free - you don't have to be a customer of theirs and there are no conditions about your circumstances or income. Of course, your home has to be suitable - not all are. If you already have loft insulation that may not be a barrier to getting it upgraded to modern standards. The current standard is 370mm about 11 inches but the joists in the loft will be smaller often six inches. So storing things on the joists may be difficult in future.

Low income customers may also get up to £300 as a bonus - amounts differ and the cash will be paid in vouchers to spend in High Street shops. British Gas will also pay for any scaffolding if that is needed and give elderly customers up to £150 to pay someone to clear the loft.

Remember these four schemes are for everyone NOT just customers of these firms and regardless of income or personal circumstances. They are running out of time so call today.

British Gas 0800 980 8177
EDF 0800 096 9000
Scottish Power 0845 601 7836
SSE 0800 072 7201

You may find cheaper numbers by using www.saynoto0870.com

E.On has a similar scheme but just for its own customers.
nPower will only insulate the homes of its own customers who have a low income and also get certain benefits related to age, children, or disability.

Smaller energy suppliers and those in Northern Ireland may not have similar schemes. But it is worth asking.

The big power companies offer the deals because they have a legal obligation to achieve reductions in the amount of energy we use - it is called the Carbon Emission Reduction Target (CERT). They have to meet these targets by the end of 2012. They are all trying to do as much as they can to hit them in time.

These deals may never be repeated as CERT has ended and arrangements are different next year.

Government schemes
Warm Front (England) 0800 316 2805
NEST (Wales) 0808 808 2244
Energy Assistance (Scotland) 0800 512 012
Warm Homes (Northern Ireland) 0800 988 0559

All four offer help with insulation and with heating systems – such as boilers or inefficient fires – but to qualify you must be on a low income, normally you have to be claiming a means-tested benefit as well as being over pension age OR have young children OR be disabled.

Call to find out more. If you are calling from a mobile you may find cheaper numbers on www.saynoto0870.com

Other schemes
As well as the major energy companies Tesco is offering a free-to-all insulation scheme. 0800 321 3456 www.tescohomeefficiency.com/free-insulation

Many local councils are also offering energy advice and insulation schemes. The Energy Saving Trust on 0300 123 1234 can give you more information about those in your area.

Beware of anyone who cold calls you at the door offering free insulation or energy saving work. Never trust them. Always say you will call whoever they claim to represent and look the number up yourself in the phone book or on the internet or check with the Energy Saving Trust.

People in mobile homes, tenants, and those in older properties may find they cannot get help. But the Energy Saving Trust can let you know what is available.

WARNING
Qualifying conditions may change. There may be application deadlines and claims after the deadline may be refused. Some end on 30 September 2012. Apply as soon as you can.


Wednesday, 19 September 2012

UNIVERSAL CREDIT - 83% TAX RATE FOR SOME

UPDATE 9 MARCH 2017
In his Spring Budget, 8 March 2017, Phillip Hammond confirmed that the tapered loss of this benefit was a tax. He confirmed the reduction in the taper rate by saying "the Universal Credit taper rate will be reduced in April from 65% to 63%, cutting tax for 3 million families on low incomes."

UPDATE 24 NOVEMBER 2016
In his Autumn Statement on 23 November 2016 Chancellor Philip Hammond announced that the taper rate for Universal Credit would be reduced from 65% to 63% from April 2017. That will make very little difference to the figures in this blogpost paper. In the final calculation it allows claimants to keep 80p of every pound earned rather than 81p. The calculation is shown at the end of this blogpost. It will be fully updated in April 2017.

UPDATED 11 APRIL 2016
The latest council tax support details have been published and are incorporated in the blogpost.

Householders who get the new means-tested benefit called Universal Credit could keep just 19p of every pound extra they earn – an effective tax rate of 81%. In some parts of England it could be more - losing 82p to 83p in every pound that is earned, leaving them with 18p to as little as 17p for every extra pound they earn. Those losses are similar to many under the present system and could undermine the work incentives which the new system is designed to create. And for graduates on incomes above £17,495 but low enough to get Universal Credit, the deductions would be more, adding about 2.5 percentage points to those figures. Worst case would be earn £1 keep 14.5p.

Universal credit
Universal Credit is being rolled out from October 2013 to replace six means-tested benefits and tax credits. It is paid to people on low incomes who cannot work, are looking for work, or work on very low pay.

It is supposed to let people keep more of what they earn and thus boost incentives both to return to work and to earn more once in work. For every £1 extra earned the credit will be reduced by 65p allowing the claimant to keep 35p. This so called ‘withdrawal rate’ of 65p in the pound is said to be much lower than rates under the present system and allowing them to keep 35p of what they earn is seen as an incentive to work. The Government says that is a big improvement on the current system where a combination of different rules and tapers can lead to individuals losing more than more than 90p in the pound if they pay tax and their means-tested benefits are cut. 

However, that figure of 65p withdrawal rate is only accurate for people who earn less than £155 a week and are not householders.

Taxpayers
Universal Credit is worked out after tax and National Insurance have been deducted. In 2016/17 anyone earning more than £155 a week will pay National Insurance and once they earn £212 a week income tax begins. Someone paying National Insurance will lose 12p in the pound before their Universal Credit is worked out. The total loss from NI and reduction in Universal Credit is 69p from each £1 they earn. So they keep 31p. If they pay income tax as well they lose just over 76p of each pound and keep just under 24p. Those figures were originally confirmed by Pensions Minister Steve Webb in Parliament in 2012. (Hansard, House of Commons, 11 September 2012, col.196).

But that is only part of the picture.

Householders
Universal Credit, despite its name, does not replace all means-tested benefits. It does not include the means-tested reduction in council tax which used to be called Council Tax Benefit but since 1 April 2013 has been replaced by a very similar scheme called Council Tax Support which is operated by local councils. Like all means-tested benefits Council Tax Support is withdrawn as income rises. The standard taper is 20p for each £1 rise in net income (after tax, NI and Universal Credit). In other words for each extra pound of net income help with council tax is reduced by 20p. The result is that for each £1 earned a total of 81p disappears in tax, NI, reduced Universal Credit, and reduced Council Tax Support. The calculation is at the foot of this blogpost.

Localism
In some areas of England and Wales the reduction for every £1 of income earned may be even higher. As part of the transfer to local councils the Government has cut the money it currently pays towards help with council tax. From 1 April 2013 councils get 90% of the money they got to pay Council Tax Benefit. The Government has already said that out of that reduced budget they will have to pay exactly the same benefit to anyone over pension age. Nearly half of all Council Tax Benefit recipients are pensioners so the other half – working age people who can claim Universal Credit – will bear the whole of the funding cut. That will mean a reduction for them of between 19% and 33% according to the Institute for Fiscal Studies (www.ifs.org.uk/comms/comm123.pdf chapter 5). 

Councils have now published the details of their schemes for the fourth year of local council tax support. In 2016/17 the great majority are keeping the taper at 20%. But 18 have a higher taper. Five - Brent, Doncaster, Harrow, North Kesteven, and Trafford - have raised it to 30%; another 11 to 25%, and one each to 23% and 21%. Only three (Brentwood, Mid Sussex, and Wiltshire) have cut it to 15%. See http://counciltaxsupport.org/schemes/ 

In areas which raise the Council Tax Support taper to 25% householders on Universal Credit who pay tax will find that 82p of each pound earned disappears in deductions. In areas with a 30% taper they will lose 83p and keep just 17p for each extra pound earned in income tax, National Insurance, reduced Universal Credit and reduced Council Tax Support. In the three areas where the taper is 15% people will lose 80% of each extra pound. Students on plan 1 or plan 2 who pay in effect an extra 9% tax lose 85.5p in the extra pound keeping just 14.5p. 

Conclusion
Losing more than 80% of each extra pound you earn is hardly an incentive to work or to work harder.

You can read the 11 September 2013 parliamentary debate on Universal Credit here

CALCULATION OF TOTAL DEDUCTIONS FOR A TAXPAYER HOUSEHOLDER
FOR EACH £1 OF EXTRA INCOME WITH 20% COUNCIL TAX TAPER

EARNS EXTRA£1.00
Tax20%-£0.20
NI12%-£0.12
Net after tax£0.68
UC reduction65%-£0.44
Net after UC£0.24
CTS reduction20%-£0.05
NET GAIN£0.19
Effective 'tax'81%

CALCULATION OF TOTAL DEDUCTIONS FOR A TAXPAYER HOUSEHOLDER
FOR EACH £1 OF EXTRA INCOME WITH 20% COUNCIL TAX TAPER SHOWING EFFECT OF 63% UC TAPER FROM APRIL 2017



EARNS EXTRA
£1.00
Tax
20%
-£0.20
NI
12%
-£0.12
Net after tax
£0.68
UC reduction
63%
-£0.43
Net after UC
£0.25
CTS reduction
20%
-£0.05
NET GAIN
£0.20
Effective 'tax'
80%

9 March 2017
Version 2.6