Not really. The number of people earning 100k is a small %.
Are you saying the majority of them are struggling to make ends meet?
Tax in UK
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Are you saying the majority of them are struggling to make ends meet?
Soldato
I think this is the kicker. The tax levels themselves aren't that high compared to many countries, but the sense of "value" that the tax payer gets is incredibly small and deteriorating all the time.
Soldato
I don't think we need to be on the brink of poverty to expect a fair portion of our earnings to actually end up in our bank account at the end of the month. This is what gets me with these conversations; people pick a figure in their head and decide anything above that isn't really deserved or needed - there's no thought given to why someone might earn above that threshold. As with most conversations held online, there's absolutely no room allocated for nuance.
Nothing to add, I just found it amusing that those 2 posts followed right after one another
The post following mine absolutely nails it - tax avoidance is definitely the issue and it's something I've never considered previously. However, with the way things are going, if I can't beat them then I might as well join them. As I said, I would literally have 10's of thousands extra in my pocket at the end of the year. It's obvious why people do it - I'd go as far as to say that I'm now being heavily encouraged to do it.
Caporegime
This is the big issue. All we are seeing is tax rises and then being told that local councils are insolvent, service X, Y and Z are being cut because of budget, that service Y has had a real world cut of 25% over the past 10 years but is being asked to do 20% more work.
We're seeing the tax burden increase every year whilst the things that it pays for are steadily getting worse while we watch mega-corporations posting record breaking multi-billion pound profits every quarter.
They resurfaced our road the other day and they just did the strip down the middle. No doubt as a cost cutting measure. Its already breaking up at the edge unsurprisingly and its only been about a month.
I think most people are happy to pay taxes when they see the benefits of them but all we see right now are decreasing value and increasing demands.
Fair. I think I understand what he's on about now, he's on about the effective tax on earnings between £100,000 and £125,140. If you combine the increase in the higher rate in Scotland with the loss of personal allowance the effective rate of income tax on those earnings is increasing from 63% to 67.5% (at the very limit of £125,140).
Edit: Which means his maths aren't wrong...
Well, other than adding loan repayments
Student loan repayments for all intents and purposes act like a tax, until it's paid off (which doesn't happen for majority of people). The net effect on your payslips is the same. As I said earlier, the maths and the example I gave earlier were correct and is also mirrored in other publications:
Scotland pioneers the 84.5 per cent tax rate
You can say one thing about Jim Callaghan’s Labour government of the 1970s. It certainly kept migration under control. Over the course of his government, Britain saw net migration of around minus 65,000. That had quite a lot to do with a top tax rate of 83 per cent. Whether Scotland’s new tax...
www.spectator.co.uk
We pay way too much income tax in the UK for the services that we receive. People pay a lot of taxes in Scandinavia but they get much better services.
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Student loan repayments for all intents and purposes act like a tax, until it's paid off (which doesn't happen for majority of people). The net effect on your payslips is the same. As I said earlier, the maths and the example I gave earlier were correct and is also mirrored in other publications:
Scotland pioneers the 84.5 per cent tax rate
You can say one thing about Jim Callaghan’s Labour government of the 1970s. It certainly kept migration under control. Over the course of his government, Britain saw net migration of around minus 65,000. That had quite a lot to do with a top tax rate of 83 per cent. Whether Scotland’s new tax...
If you're earning 100k plus you'll pay it off!
If you consistently earn that much, yes. Most people who get trapped by these rates don't consistently earn that much.
Do they not?
But then isn't tax worked out over the year? So if you're yo-yoing it balances out?
No I meant more like one year you maybe get £105k (one-off bonus, big commission, etc) and then not other years. And then due to how you lose personal allowance with other deductions (student loans, etc) you see very little of that £5k. These are the kinds of people we're taxing into oblivion.
Obviously if someone consistently earns £200k then this isn't as much of an issue, their marginal rate is 47% (in England, a bit more in Scotland).
Soldato
I agree, but the issue is taxes down the line are not sufficient. By all means lower income tax, but then we should be taxing the accrued wealth that arises further down the line as a result of the increased available income being invested etc.
And there should be earnings limits I think - at some point an individual doesn't need that much and there would be more distributed benefits of ensuring that extra is spread out over everyone.
Soldato
Communism?
I paid my student loan off with automatic payments about 5 years after I graduated. My student loan balance was less than £20K though.
You're welcome to move to one of those countries if you can qualify for immigration. I certainly think that my standard of living is much better now than when I lived in (a nice part of) the UK.
It all depends on your loan balance and your income level. I paid my student loan off in a handful of years while earning a fraction of 100K.
That's not tenable in any free market economy. There will always be someone earning more than someone else, and there will always be ways round those sorts of rules, which politicians would no doubt use themselves, such as being a non-dom for tax purposes, being paid via a company or trust, etc.
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Student loan repayments for all intents and purposes act like a tax, until it's paid off (which doesn't happen for majority of people). The net effect on your payslips is the same. As I said earlier, the maths and the example I gave earlier were correct and is also mirrored in other publications:
Scotland pioneers the 84.5 per cent tax rate
You can say one thing about Jim Callaghan’s Labour government of the 1970s. It certainly kept migration under control. Over the course of his government, Britain saw net migration of around minus 65,000. That had quite a lot to do with a top tax rate of 83 per cent. Whether Scotland’s new tax...
We pay way too much income tax in the UK for the services that we receive. People pay a lot of taxes in Scandinavia but they get much better services.
I don't think it's reasonable to consider student loan repayments as a tax. It's debt from taking a loan to pay an independent institution (a University) for further education. When I went to Uni it opened my eyes up to the fact they operate like a business, and that's what they are at the end of the day. Whether it's right or wrong, further education isn't provided to us by the state and therefore paying for it can't be considered a tax. It's kind of a mute point anyway as even the 67.5% figure is mind blowing, which is why I thought there was no way you'd worked that out correctly. Add 2% NI and it's 69.5% and then when you actually spend that money you're paying another 20% VAT on everything you buy, in some cases potentially a lot more (petrol, booze, fags etc.). If you're in that bracket it would be madness to do anything but pile it into a pension or some other tax relief.
So for every £100 you earn in that bracket, £69.50 goes straight to HMRC. Best case you spend the £30.50 your left with and HMRC get another £6.10 in VAT @ 20%. So they end up with at least £75.60 of every £100 i.e. 75.6%. I agree with you that's far too high and even though I don't earn that kind of income I consider it totally unfair to those that do. Like you said, it's not like we have amazing public services to show for it, extremely poor roads and infrastructure, broken healthcare system, can't get a dentist appointment, and the list goes on.
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This reminded me of a colleague, who retired around 2 years ago. He had been maxing out his AVCs for years, got his 'gold plated' final salary pension, which included a nice £100k+ lump sum.
2 weeks after his retirement he had a heart attack and literally dropped dead...
Soldato
Can I be brutally honest? Anyone earning a straight cash over 100k a year and doesn’t have methods of of playing less taxes deserves to be ripped off by taxes! Yeah, they maybe earning a lot more than that and with all their schemes setup; may drop them down to that amount, in which case… respect.. and isn’t it right to pay your share?
companies that offer employees that amount will offer legitimate schemes to help with the taxes..
golden handcuffs of SIPs and SAYEs, so that they can get the cash back later as and get charged diverted or capital gains rates rather than income tax rates..
SIPPs, to claim the taxes back later..
car lease schemes, company car/phone usage, medical care for the family, cycle to work, holidays paybacks, life insurance, work insurance, dental care, gym membership… I have pages of schemes to join at work, to reduce my taxable income.. some by law have taxable benefits amounts, but they are normally lower than the amount you would be taxed and had to pay for the scheme privately.. obviously, only sign up for the ones that you will use.
it’s different if you need all the pay in cash to survive, but people on 100k+ don’t just wake up one morning and find themselves on that amount… their main issue isn’t taxes but lifestyle creep but if that’s how they want to spend their money, the tax is the additional fee for that lifestyle.
with being on that amount of money, it’s worth spending some of it on a financial advisor or accountant to help “manage” the cash flow.
companies that offer employees that amount will offer legitimate schemes to help with the taxes..
golden handcuffs of SIPs and SAYEs, so that they can get the cash back later as and get charged diverted or capital gains rates rather than income tax rates..
SIPPs, to claim the taxes back later..
car lease schemes, company car/phone usage, medical care for the family, cycle to work, holidays paybacks, life insurance, work insurance, dental care, gym membership… I have pages of schemes to join at work, to reduce my taxable income.. some by law have taxable benefits amounts, but they are normally lower than the amount you would be taxed and had to pay for the scheme privately.. obviously, only sign up for the ones that you will use.
it’s different if you need all the pay in cash to survive, but people on 100k+ don’t just wake up one morning and find themselves on that amount… their main issue isn’t taxes but lifestyle creep but if that’s how they want to spend their money, the tax is the additional fee for that lifestyle.
with being on that amount of money, it’s worth spending some of it on a financial advisor or accountant to help “manage” the cash flow.
Soldato
Bands are a joke. I'm just stacking my pension to take the pain away.
Quite grim to see.This reminded me of a colleague, who retired around 2 years ago. He had been maxing out his AVCs for years, got his 'gold plated' final salary pension, which included a nice £100k+ lump sum.
2 weeks after his retirement he had a heart attack and literally dropped dead...
This wasn't quite that bad. But the waste of time the previous years just seem so the more apparent now.
So sad really
I’m a contractor (inside IR35), made a smidge under £100k last year, but got a 8% rate increase this year. I just intend to work less this year to come in under £100k still (life’s for living and I don’t spend much, drive an old second hand Mazda 3 etc) - not great for productivity which the U.K. has stalled at nationally for the last 15 years but that’s the behaviour this freaky tax band creates.
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