Tax in UK

SpeedFreak said:
Bands are a joke. I'm just stacking my pension to take the pain away.
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Exactly this, I am one of the lucky ones and every salary increase the pension contributions go up so it doesnt end up in *unts lets pay the Tory party mates fund.

The Bands are a joke as mentioned before, the entire system needs a overhaul I would even go as far to say get rid of PAYE and everyone does their own taxes. But you know whichever government implements that will mess it up and it will be rigged for the rich again.
 
BennoUK said:
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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Yub, it's a life decision at the end of the day. I've been offer contract work under IR35 but have always refused as I didn't want the hassle of setting up a LTD company and doing my own NI and Taxes... turn down job offers in Dubai where is tax free but the UK government still expects you to declaire your earnings and pay NI.

a few of my mates only work 6 months a year by choice, but one of my mates wants to get as much as he can as fast as he can then take semi retirement early. I'm at the same mind set, work hard until I pay of my house by then I should have enough pension, stocks/shares, cash in the bank to get a noddy job somewhere to keep the job center off my back till I retire.
 
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BennoUK said:
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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That's exactly what I'd do.

If I do manage to get into contracting and do hit that salary (possible if I can) then I'd be cutting down work hours where possible to stay under that.

Unless you're blowing past it towarda 150k for no more work hours you're hugely into diminishing returns.

There's no reward to work another day if it's pushing you into that threshold
 
Richie said:
Not sure why. As long as you accept that you may not qualify for full state pension due to potentially not paying enough qualifying years, why would they want you to pay NI?
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I think this was before they changed the rules, I already have gaps in my NI payment... I was also in the middle of buying my first house in the uk too and the turn over time the company wanted was a month. If I was still living at home with my parents rather than renting a place and had a load of furniture, stuff and car to sort out..
 
SpeedFreak said:
Bands are a joke. I'm just stacking my pension to take the pain away.
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Bands themselves are perfectly fine, but we could do with a lot more of them so the transitions are a lot smoother. E.g
every few K they could increase by 2%. Then you don't see these big issues when you suddenly have an increase in salary or a bonus is paid
 
D.P. said:
Bands themselves are perfectly fine, but we could do with a lot more of them so the transitions are a lot smoother. E.g
every few K they could increase by 2%. Then you don't see these big issues when you suddenly have an increase in salary or a bonus is paid
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I agree with you but you realise that introducing more bands has been adopted in a certain UK country and certain parts of the media and public are in meltdown over it?
 
The big problems come from two particular points around 50k and 100k. At both thresholds you lose access to child care free hours or childcare accounts entirely (lose a 20% government bonus) with an additional loss of personal allowance at 100.

Both points give high tax rates for money earned in these bands in the best scenarios. In the worst scenarios (mostly with kids), you can be financially worse off from the higher tax and loss of childcare support. Overall the cliff edges on government support are the cause of this situation. I can’t see anything changing for these tax points in the future as there is no political will or sympathy for people earning over 100k. It just doesn’t make sense that you earn an extra £1000 when on 100k and get to keep £380, but the same earnings at 160k and you keep £530.
 
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Richie said:
I agree with you but you realise that introducing more bands has been adopted in a certain UK country and certain parts of the media and public are in meltdown over it?
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Those aren't just more bands though. It's more tax at all Points.

Introducing more bands could benefit for some parts and be detrimental in others

Let's say you introduced a 30pcband from 40-60
In 40-50 you'd be worse Off.
In 50-60 you'd be better Off.

But it would alievate the "no point going for that 5k promotion to 55k because it comes with more work thing.
 
Not sure 100k is a top salary in the UK considering the economic turbulence.

I can't actually find a robust salary list which details best salaries in UK as a comparison as to what is seen as good salary now or with everything added in (e.g. bonus)
 
Gammawolf said:
It means you would earn more than 95% of everyone else in the UK, so yes its probably a good thing for you.
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Not exactly. As the link itself states this only covers people who specifically pay income tax. The actual wealthy don't earn PAYE incomes, they get dividends, capital gains and other forms of distributions from trusts etc which do not create an income tax liability and therefore are excluded. Those with family wealth, the land/business owner class, etc are all excluded from these figures. It would be more accurate to say someone on £100k earn more than 95% of the rest of the working class population. Still decent, but not the top 5% of the UK.

It would be more fair comparison to look into wealth, and to be in the top 5% in terms of wealth you need about £2 million in assets. You will not get there on a £100k income, not in several lifetimes.
 
I would love a bit of UK taxation compared to what I have now.

1Up to €11,693 0%
2€11,693 – €19,134 20%
3€19,134 – €32,075 30%
4€32,075 – €62,080 41%
5€62,080 – €93,120. 48%
6€93,120 – €1,000,00050%
7Over €1,000,000 55%
 
HACO said:
Not exactly. As the link itself states this only covers people who specifically pay income tax. The actual wealthy don't earn PAYE incomes, they get dividends, capital gains and other forms of distributions from trusts etc which do not create an income tax liability and therefore are excluded. Those with family wealth, the land/business owner class, etc are all excluded from these figures. It would be more accurate to say someone on £100k earn more than 95% of the rest of the working class population. Still decent, but not the top 5% of the UK.

It would be more fair comparison to look into wealth, and to be in the top 5% in terms of wealth you need about £2 million in assets. You will not get there on a £100k income, not in several lifetimes.
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I'm aware, but the answer was aimed at a binary question of is it good or bad. The small difference in that doesn't really change the answer.
That £2m you refer to is household wealth though, I think its entirely feasible to reach £2m in assets as a household on £100k, with a partner on a modest £40k. Given it includes assets like private pensions etc.
 
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Lopéz said:
I would love a bit of UK taxation compared to what I have now.

1Up to €11,693 0%
2€11,693 – €19,134 20%
3€19,134 – €32,075 30%
4€32,075 – €62,080 41%
5€62,080 – €93,120. 48%
6€93,120 – €1,000,00050%
7Over €1,000,000 55%
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Thats a lot!
Expensive country too right?
 
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