Tax in UK

[slinxy]

The three main taxes that the govement get's it's money is from income tax, national insurance and VAT.

Personally, I think everyone should pay a basic rate of income tax and national insurance to keep the basic services of this country running. Then setup VAT so it works correctly and that basic, middle and luxury items get's tax accordingly.

The governement says we could be the Singapore of Themes, maybe we should start with a have a tax system like the Singapore?

 

[Dirk Diggler]

The way I see it, 100k is a lot of money still.

If you earn that even as a single earner in a family your doing ok.

At this point anything over 100k should definitely be going into your pension (even more if your a two income household).

Then the tax brackets don’t matter. If you’re taking it as salary you have some serious money problems or like to spend spend spend.

You don't have the right to tell people how to spend their money, just as no-one has the right to tell you how to spend your money. These conversations always scratch at the scab of an awful envy in British culture.

Taxation is going to get out of control and it's not because people are spending their wages on things you don't approve of. When the tax take on higher earners fails to solve the problem, they'll raise the tax take on lower earners like you - and there will be plenty of people earning even less than you, who could lecture you about why you shouldn't be buying the things that they can't afford to buy.

 

[413x]

The three main taxes that the govement get's it's money is from income tax, national insurance and VAT.

Personally, I think everyone should pay a basic rate of income tax and national insurance to keep the basic services of this country running. Then setup VAT so it works correctly and that basic, middle and luxury items get's tax accordingly.

The governement says we could be the Singapore of Themes, maybe we should start with a have a tax system like the Singapore?

I think the bands are fairly good.

Tax free allowance has to be there. 13k or whatever it is shouldn't be taxed.
Its the 50k 40pc that should be adjusted.

More at 40-50 (or something)

Same at 100+

Probably should be a 80-100 band or. Something

 

[-Ad-]

You don't have the right to tell people how to spend their money, just as no-one has the right to tell you how to spend your money. These conversations always scratch at the scab of an awful envy in British culture.

Taxation is going to get out of control and it's not because people are spending their wages on things you don't approve of. When the tax take on higher earners fails to solve the problem, they'll raise the tax take on lower earners like you - and there will be plenty of people earning even less than you, who could lecture you about why you shouldn't be buying the things that they can't afford to buy.

Nice post.

The envy in British culture is awful, social media and the ability to hide behind a keyboard whilst spouting even more has amplified it further.

I'm happy to have left Scotland in spring 2022 we sold our house in a bidding war and achieved a great price (should have been more but the valuation screwed us for being the first uber renovated house in the area).

Since then house prices have dipped, interest rates have rocketed and now the 45 and 48% tax brackets have come in to screw those living in Scotland further.

Plus I now get an actual summer with a big visible warming globe sitting there in the sky

 

[413x]

You don't have the right to tell people how to spend their money, just as no-one has the right to tell you how to spend your money. These conversations always scratch at the scab of an awful envy in British culture.

Taxation is going to get out of control and it's not because people are spending their wages on things you don't approve of. When the tax take on higher earners fails to solve the problem, they'll raise the tax take on lower earners like you - and there will be plenty of people earning even less than you, who could lecture you about why you shouldn't be buying the things that they can't afford to buy.

I agree.

For example piling everything into pension.

I thought when I hit the 50k this is what I'd do. But I've had a long think and I'm not sure if it's right for me.

Having seen family pass away early and never knowing what's around the corner, and other family just sit on wealth, and also I'm not having kids, so no point dying wealthy... Should I really be putting that much into a pension?

Obviously I have a pension and max out my employer contribution... But as tempting as the tax saving is... Is it worth it?

I'm not sure.

 

[delta0]

Nice post.

The envy in British culture is awful, social media and the ability to hide behind a keyboard whilst spouting even more has amplified it further.

I'm happy to have left Scotland in spring 2022 we sold our house in a bidding war and achieved a great price (should have been more but the valuation screwed us for being the first uber renovated house in the area).

Since then house prices have dipped, interest rates have rocketed and now the 45 and 48% tax brackets have come in to screw those living in Scotland further.

Plus I now get an actual summer with a big visible warming globe sitting there in the sky

I must admit I have a tough time with the crabs in a bucket mentality in the UK. It really holds us back. I actually couldn’t live on £100k. Paying for a mortgage (£25k), nursery (£21k) and cost of living (£25k) means I need to earn at least £110k just to break even and that doesn’t include any pension contributions. My mortgage goes up next year and inflation will have pushed that cost of living up a bit and probably the nursery when that comes up in April. I look forward to the day of not having a mortgage!

 

[Martynt74]

I agree.

For example piling everything into pension.

I thought when I hit the 50k this is what I'd do. But I've had a long think and I'm not sure if it's right for me.

Having seen family pass away early and never knowing what's around the corner, and other family just sit on wealth, and also I'm not having kids, so no point dying wealthy... Should I really be putting that much into a pension?

Obviously I have a pension and max out my employer contribution... But as tempting as the tax saving is... Is it worth it?

I'm not sure.

I agree, having money tied away to the age of 67 (55 with a lump sum) just isn't very appealing. I'd like to see a better tax top up on medium term savings plans. Like reclaim half your tax bracket locking it away in a 10yr ISA for example. Still encourages long term thinking but being a little more accessible.

 

[Dirk Diggler]

Nice post.

The envy in British culture is awful, social media and the ability to hide behind a keyboard whilst spouting even more has amplified it further.

I'm happy to have left Scotland in spring 2022 we sold our house in a bidding war and achieved a great price (should have been more but the valuation screwed us for being the first uber renovated house in the area).

Since then house prices have dipped, interest rates have rocketed and now the 45 and 48% tax brackets have come in to screw those living in Scotland further.

Plus I now get an actual summer with a big visible warming globe sitting there in the sky

Historically, I've been quite happy to pay extra tax because I could understand that (no offence intended to English residents) I would be horrified to relocate down south and massively downgrade my quality of living in the process - essentially, I could appreciate what I was paying for. However, the tax burden is now spiraling due to the Tory mismanagement of everything in general but COVID in particular. The Michelle Mone situation just epitomises the issues we're having to pay for.

The only way I can counter the tax increase is to pay more into my pension, but I'm already paying 20% of my earnings into there - I don't want to plough any more than that in and then risk another Tory disaster like Liz Truss when it comes to cashing it in.

In reality, I have Ltd Company options that I can explore and I'll end up with much more money in my pocket.

 

[jeffk]

The main issue is the amount of people and international companies finding ways to avoid paying their fair share of tax. There’s a whole class of people out there who take out of the system but don’t feel any duty to give anything back. Sadly, a lot of these people are ministers, peers and other people with influence so there’s little desire from the current government to do anything about it.

I earn decent money and I don’t mind paying a decent amount of tax. I’d just like a level playing field. We all pay more tax and have worse public services because of these tax dodgers.

 

[413x]

I agree, having money tied away to the age of 67 (55 with a lump sum) just isn't very appealing. I'd like to see a better tax top up on medium term savings plans. Like reclaim half your tax bracket locking it away in a 10yr ISA for example. Still encourages long term thinking but being a little more accessible.

And who knows.. What if they decided to remove that cash in option (25 percent?)

That would royally screw me.

I really don't like so much control being out of my Control.



Besides all that.. I feel lucky. Especially as this wage is very new to me. And I haven't increased my base costs. Still driving a banger car. No intent to increase my. Mortgage debt at all.

But yeah a 10 year isa with (let's say) half tax relief would be something I'd jump on.

 

[jeffk]

However, the tax burden is now spiraling due to the Tory mismanagement of everything in general but COVID in particular. The Michelle Mone situation just epitomises the issues we're having to pay for.

All the headlines are about her and her husband profiteering during a time of national crisis. Less is said about them then funnelling those profits into a trust to avoid paying tax. It’s a double-whammy to the tax-payer: take money out, don’t put anything back in.

But, as she said, everyone she knew was doing it.

 

[413x]

Historically, I've been quite happy to pay extra tax because I could understand that (no offence intended to English residents) I would be horrified to relocate down south and massively downgrade my quality of living in the process - essentially, I could appreciate what I was paying for. However, the tax burden is now spiraling due to the Tory mismanagement of everything in general but COVID in particular. The Michelle Mone situation just epitomises the issues we're having to pay for.

The only way I can counter the tax increase is to pay more into my pension, but I'm already paying 20% of my earnings into there - I don't want to plough any more than that in and then risk another Tory disaster like Liz Truss when it comes to cashing it in.

In reality, I have Ltd Company options that I can explore and I'll end up with much more money in my pocket.

Its bitter.
The corruption is a bitter thing to swallow.

We must here about a tiny fraction of the corruption. I can imagine tax wouldn't have to go up much at all if corruption was eliminated.

If we got a good deal for our tax paying more wouldn't be so bad. But when you're paying scum bags I can see why people resist it.

 

[Richie]

That's the problem at hand. We either end up like the US which is awful or we get a universal health service that is incompetently run, to the point where it can't deliver a full coverage of service.

In a country that's being slated due to its very recent budget, which includes a more varying and progressive tax regime (Scotland), they have avoided any industrial action in the NHS and its better funded. It may have it's own issues (any large organisation will never be perfect), but there isn't a doctor's walkout over the festive period for example.

For sure - it's why wages grow exponentially too IMHO. To make it worth while you need to be clearing the £125k PA reduction comfortably (i.e. a base of at least 125k) and then you anticipate similar bonus levels (~5% to 20%) which puts you substantially over your previous base. There isn't much if any incremental growth post £100k. Just big wallops or go home.

Exactly. I doubt any company will promote someone that's on, say £110k, to a position with a raise that is swallowed up by tax etc i.e. it would be a sufficiently large increase so that the NETT pay yo get would make it feel worth it.

You don't have the right to tell people how to spend their money, just as no-one has the right to tell you how to spend your money. These conversations always scratch at the scab of an awful envy in British culture.

Taxation is going to get out of control and it's not because people are spending their wages on things you don't approve of. When the tax take on higher earners fails to solve the problem, they'll raise the tax take on lower earners like you - and there will be plenty of people earning even less than you, who could lecture you about why you shouldn't be buying the things that they can't afford to buy.

I agree with the above however I also understand that £100k IS a good wedge of money and certainly takes you well away from the "heating or eating" decisions affecting others on far less.

I think the bands are fairly good.

Tax free allowance has to be there. 13k or whatever it is shouldn't be taxed.
Its the 50k 40pc that should be adjusted.

More at 40-50 (or something)

Same at 100+

Probably should be a 80-100 band or. Something

Not a popular decision apparently

 

[Richie]

In reality, I have Ltd Company options that I can explore and I'll end up with much more money in my pocket.

The main issue is the amount of people and international companies finding ways to avoid paying their fair share of tax.

Nothing to add, I just found it amusing that those 2 posts followed right after one another

 

[413x]

In a country that's being slated due to its very recent budget, which includes a more varying and progressive tax regime (Scotland), they have avoided any industrial action in the NHS and its better funded. It may have it's own issues (any large organisation will never be perfect), but there isn't a full scale walkout over the festive period for example.




Exactly. I doubt any company will promote someone that's on, say £110k, to a position with a raise that is swallowed up by tax etc i.e. it would be a sufficiently large increase so that the NETT pay yo get would make it feel worth it.



I agree with the above however I also understand that £100k IS a good wedge of money and certainly takes you well away from the "heating or eating" decisions affecting others on far less.




Not a popular decision apparently

Yeah it's easy to forget how good we have it vs the rest of the world.

2 people earning 80 between them
Or 1 person on 100


Should have no issues. Sure, it may not be all roses if you have a big mortgage.. But really.. You've no right to complain.

I can see the argument within the 100-125k band for sure. But again, you're into the huge pay + bonus territory jumps here for sure.


We sit in the 80k-90k split boundary and although can't have it all. I certainly wouldn't patronise and say "it's tough".
We could make it tough for ourselves.. But that would be a choice and take multiple of:

Expensive day to day life like eating out.
whacking the heating up to 25c 24/7.
Getting a tesla on PCP.
Blowing out the mortgage on a new house.
Adding kids to the mix.


But it need not be that way.

100k isn't as much as it seems.. But it's also far to easy to live to your means.

 

[Skynet5]

You don't have the right to tell people how to spend their money, just as no-one has the right to tell you how to spend your money. These conversations always scratch at the scab of an awful envy in British culture.

Taxation is going to get out of control and it's not because people are spending their wages on things you don't approve of. When the tax take on higher earners fails to solve the problem, they'll raise the tax take on lower earners like you - and there will be plenty of people earning even less than you, who could lecture you about why you shouldn't be buying the things that they can't afford to buy.

To be clear, I’m not telling anyone how to spend their money, nor being disapproving. Apologies if it came across that way, that certainly wasn’t my intent even if it was interpreted or written in such a way.

The taxation system is going to work for the majority. Those earning 125k and worried about the 60% rate and choose to pay it rather than pension it are very few and far between.

100k is plenty and for those that it isn’t is a small % of a small %.

 

[dlockers]

Exactly. I doubt any company will promote someone that's on, say £110k, to a position with a raise that is swallowed up by tax etc i.e. it would be a sufficiently large increase so that the NETT pay yo get would make it feel worth it.

Well also in terms of UK productivity dings - you gotta work really hard on the maths to not drop a day. Anything between £115-125k, you may be better off dropping to 4 days and living on the same effective take home but less pension/car/cycle2work gimmicks.

 

[dlockers]

100k is plenty and for those that it isn’t is a small % of a small %.

That is so riddled with assumptions its unreal lol.

 

[swillsy]

They should bin-off NI - it all goes into the same "pot" (which doesn't exist as we are in a lot of debt) and add it onto income tax/VAT. It makes no sense any more and would simplify it slightly. I don't understand why an employer would pay NI either tbh as surely employing people should be encouraged.

btw we pay silly tax in the UK for terrible service, I looked at my P60 today and this is the split currently.

22.8% Health - shocking service unless you're at risk of death
20.4% Welfare - can't claim anything if you are in 95% of jobs
11% pension - will be a joke amount when I retire in 30 years I imagine
10.5 % Education - fair and probably should be more
7.6% Debt interest -

 

[413x]

Well also in terms of UK productivity dings - you gotta work really hard on the maths to not drop a day. Anything between £115-125k, you may be better off dropping to 4 days and living on the same effective take home but less pension/car/cycle2work gimmicks.

Absolutely. Dropping a day is a dream for me. To keep between 50-60 but to do 4 days? Sign me up!