Tax Fairness Question

Reviving this as he's crossed the 100k income threshold so is losing personal allowance now. Wants reimbursed for the marginal 60%. Tried unsuccessfully to nip this in the bud last time, definitely need to do so now. Urgh, family politics...
 
Demon said:
If B and C are happy with it, then why bother arguing over it?

As mentioned above, B and C need to be the ones advocating for equal shares, clearly its unequal, but the golden rule is never get in the way of family matters it never ends well..

If I was B or C, I'd at least ask for the student loan being paid as well, and possibly just verbally tell them you are now a super high rate earner on 50% tax and wish it all back.
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B and C aren't particularly happy, but at the same time get anxious around confrontation. The thing is, personal allowance, student loan, child benefit could all be considered. There are so many variables if we go down this rabbit hole. My logic is:

A earns £100k salaried and business provides a further £15k. Business drives 15/115k = 13% of their tax burden. Tax on £115k is £36.4k. Business has driven £4.7k of their tax bill.

B/C earn £45k salaried and business provides a further £15k. Business drives 15/60 = 25% of their tax burden. Tax on £60k is £11.4k. Business has driven £2.9k of their tax bill. (Current process would pay 20% x 15k = £3k, essentially about right.)

The marginal tax is absolutely not the fault of the business. Current ask of A is for the business to provide £9k (60% (40% plus personal allowance unwind) x £15k). Even the £4.7k is generous, instead being a purist the business should pay salary to each owner of £3k and then the tax bill is your own responsibility. A needs to top up their tax return by £6k.
 
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None of the above, all have equal contribution to the business capital, it's just a nuance of A being an accountant so sets out the tax calculation for their annual returns. The business then funds the payment of the marginal tax liability.
 
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Response has been, to paraphrase:

"It's not fair that I have to pay 60% tax".
"I have built the business for B and C". - Ignoring that seed capital came from parents and they have all jumped in to do any work that is needed to maintain/manage the properties and equally took on debt to finance it.
"Don't worry about my tax". - Nice of A to recognise that it is their tax and not B and Cs tax.
 
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That's been my point, it is not an equitable split of profit as by subsidising taxation the weighting is already skewed.

On the second point, no, they don't. A may feel they deserve more due to outdated cultural primogeniture possibly, but not for any tangible additional effort, but there are other issues around that topic. Specifically inheritance leaving as much to A as B and C combined, but that's a whole other story lol. That makes the argument about "unfair" paying 60% tax even more laughable.
 
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