Tax in UK

aspiring

aspiring

aspiring

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Hampshire
My friend is moving to Australia as he says earning over 100k is a ridiculous benchmark for excessive taxation.

We got debating whether 100k should be the cut off considering is it actually a 'rich wage' as such when you have millionares earning 500k etc.

So question is should the tax be so excessive at 100k?
 
£100k+ is peculiar in the UK due to the winding down of the personal allowance - for every £2 over this you earn, you lose £1 of your personal allownce I think it is. Can't remember the exact figure, but the effective tax rate upto about £125k from £100k is 60% due to this.
 
Well, the higher rate (40%) bracket should be much higher (90k?) if it had moved with inflation.
And there's some 60% tax problem at £100k.
Pretty big issues IMO.

I have a fundamental issue with having different brackets at all. The concept of a progressive system is the more you earn the more you pay. This can be achieved with a single rate of income tax. Combine income tax and national insurance. That is "the more you earn the more you pay".

Our current system is "the more you earn the more you are punished for it". People whine about those on good salaries being well off and wanting more money off them - whilst at the same time telling their kids it's important to go to school and get educated so you can get a good job - literally punishing their own kids for doing what they're told.
 
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aspiring said:
My friend is moving to Australia as he says earning over 100k is a ridiculous benchmark for excessive taxation.

We got debating whether 100k should be the cut off considering is it actually a 'rich wage' as such when you have millionares earning 500k etc.

So question is should the tax be so excessive at 100k?
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I'm not sure what the comparison point to "millionaires earning 500k" is trying to make?

You have billionaires earning 100million+ each year... You earn more you pay more tax (at least that's supposed to be how it works). If he doesn't like that, he can either find a lower paid job to pay less tax (said no-one ever). Or go live somewhere he doesn't pay so much tax.
 
Semple said:
I'm not sure what the comparison point to "millionaires earning 500k" is trying to make?
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The point is that 100k doesn't mean you are rich. That's like the entry level salary for a single person to buy a flat in London. The point being that the UK shouldn't be taxing people a higher rate when they can only afford the basics. The 500k is just a made up number to illustrate an income which would be significantly more comfortable to live on.
 
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throwaway4372 said:
Well, the higher rate (40%) bracket should be much higher (90k?) if it had moved with inflation.
And there's some 60% tax problem at £100k.
Pretty big issues IMO.

I have a fundamental issue with having different brackets at all. The concept of a progressive system is the more you earn the more you pay. This can be achieved with a single rate of income tax. Combine income tax and national insurance. That is "the more you earn the more you pay".

Our current system is "the more you earn the more you are punished for it". People whine about those on good salaries being well off and wanting more money off them - whilst at the same time telling their kids it's important to go to school and get educated so you can get a good job - literally punishing their own kids for doing what they're told.
Click to expand...

A single rate would never work though. You either set it too high which would punish those on lower incomes, or you set it too low and those on big salaries are paying a pittance.

I.e. if you set it as 20% then those on 500k would only pay 100k in tax as opposed to the 210k they pay now.
 
throwaway4372 said:
The point is that 100k doesn't mean you are rich. That's like the entry level salary for a single person to buy a flat in London. The point being that the UK shouldn't be taxing people a higher rate when they can only afford the basics. The 500k is just a made up number to illustrate an income which would be significantly more comfortable to live on.
Click to expand...

So the issue is more to do with housing costs in London rather than level of taxation? If property in London was more affordable then there wouldn't be this issue of paying more tax at higher earnings.

Fwiw I do think the thresholds should have moved with inflation over the years, as it's now just a stealth tax.
 
Semple said:
A single rate would never work though. You either set it too high which would punish those on lower incomes, or you set it too low and those on big salaries are paying a pittance.

I.e. if you set it as 20% then those on 500k would only pay 100k in tax as opposed to the 210k they pay now.
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100k as per your example isn't pittance.

1/5 of everything you earn being taken is a lot of money, regardless of how much you earn.
 
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throwaway4372 said:
The point is that 100k doesn't mean you are rich. That's like the entry level salary for a single person to buy a flat in London. The point being that the UK shouldn't be taxing people a higher rate when they can only afford the basics. The 500k is just a made up number to illustrate an income which would be significantly more comfortable to live on.
Click to expand...
Chuk_Chuk said:
100k as per your example isn't pittance.

1/5 of everything you earn being taken is a lot of money, regardless of how much you earn.
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100k according to following arricle is 3 times average in London?

mymoneyyard.com

Is £100k a Good Salary in the UK? | My Money Yard

Overall, £100k is a good salary in London. London is the most expensive area in the UK and it is also where salaries are the highest. Six-figure salaries are
mymoneyyard.com mymoneyyard.com
 
Semple said:
I'm not sure what the comparison point to "millionaires earning 500k" is trying to make?

You have billionaires earning 100million+ each year... You earn more you pay more tax (at least that's supposed to be how it works). If he doesn't like that, he can either find a lower paid job to pay less tax (said no-one ever). Or go live somewhere he doesn't pay so much tax.
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The debate on this is around is 100k a large enough salary to be taking the 60% tax on instead of setting that at 300k for example
 
Meh, tax.

Just pay it, forget about it, don't get bitter about it.

Unless you are going to get into politics, campaign, win and get anywhere near enough power, you aren't going to change it.

Or just 'earn' enough to move into my favourite bracket of "**** you" money where you can practically do whatever you like and won't be payiong anything near 60%, or 20% for that matter.
 
100k is a lot to most people (it would be to me)

100k isn't so much in London if you're single

But earning 100k for a good chunk of your life.. You're going to do OK, London or not. You might not realise your wealth until later though
 
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aspiring said:
The debate on this is around is 100k a large enough salary to be taking the 60% tax on instead of setting that at 300k for example
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I'd say yes, but as per my previous comment, the thresholds should have moved with inflation, so now that'd be at like 150k.
 
The biggest problem right now is that inflation has pushed more of us into tax brackets that haven’t moved. I don’t even bother going for promotions anymore, there’s no point when so much is lost to the government.

As for 100k, it depends where you live. You’ll still live well, but in London most of that gets taken through higher costs.
 
413x said:
100k is a lot to most people (it would be to me)

100k isn't so much in London if you're single

But earning 100k for a good chunk of your life.. You're going to do OK, London or not. You might not realise your wealth until later though
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Why would you say 100k is not enough in London. The average wage in London is around 40k no?
 
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