Will the UK make changes to the tax system at the £100k threshold in the 2025 tax year (by April 2025)?
The spirit of this question is around if people in this 'trap' pay a higher marginal rate than those above it and/or are made worse off than earning less by falling into it. I will resolve ambiguous outcomes in-line with that intent (clarify before betting).
The two themes (childcare, tax free allowance) will be assessed and resolved independently.
Childcare
This refers to the free hours of childcare parents receive. Currently this is removed entirely at £100k. A change of either making this a universal benefit or tapering the cut-off would mean this resolves Yes, else No.
A move to a household assessment rather than individual income would still resolve No if it shares the same cliff-edge characteristics.
Tax free allowance
The tax free allowance is removed between £100k-125k creating a marginal income tax rate of 60% (+ other taxes on earnings), great than the rate on higher incomes.
Any change that removes this discontinuity such that the marginal rate at this band is lower than all higher incomes would resolve Yes. (e.g. such that the marginal rate at £115k is less that the marginal rate at £140k).
If the taper were removed but £100k-£125k were taxed at 50% dropping to 45% at 125 this will resolve No.
Changes that resolve No:
Minor changes to thresholds (e.g. £100k move to £104k due to inflation).
Resolves N/A:
Significant changes (e.g. scrapping of these taxes / benefits or large structural changes) that make it hard to resolve in the spirit of the market.
Context
https://twitter.com/DanNeidle/status/1705970650127454538
I will not bet in this market.
1,000
3.00@mattyb My mistake I changed the question type without making the captions clearer- multiple answers could be chosen.
I wanted to be able to capture people's views on one factor without weighing in on the other if they wanted, but then I felt None/Both might also be helpful.