Tax in UK

Scuzi · 9 Jul 2023 at 12:41

Assuming 6% pension contributions and no other tax complications.

[FnG]magnolia · 9 Jul 2023 at 12:44

Cool cool but not Australia (visibly confused).

throwaway4372 · 9 Jul 2023 at 12:44

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.

Well, 20% income tax + 12% national insurance, so I'd start the discussion at 32%. I think somewhere in the 32-37% range is what the final figure would be. Of course there's dividend income to consider, and evasion. It was quite thoroughly investigated a while back, bit outdated now and I don't agree with all of it, but you can see that here [pdf].

Dirk Diggler · 9 Jul 2023 at 12:48

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.

The above is only true if you continue with the system of allowing people to earn while paying no tax or a fraction of the rate they would under PAYE.

aspiring · 9 Jul 2023 at 12:55

Jokester said:
What do you mean guaranteed? They would be protected by financial regulations - they are still your funds even if managed by a company. Markets need to drop a huge amount to wipe out the value of that investment by 60%!

Well the investments could go down significantly compared to what you put in?

413x · 9 Jul 2023 at 13:07

The only thing I think needs changing is a bit of an increase in tax free allowance as the lower paid are really struggling.

And better taxes on "wealth".

I think the ISA allowance is fine.

I think PAYE is pretty good as is.

Hagar · 9 Jul 2023 at 13:14

Dirk Diggler said:
It kind of doesn't, IMO.

Tax should be a flat rate regardless of income, and set around 22%. And when I say flat rate I mean everyone, not just those on PAYE. Because if you think that everyone earning over £100k in this country is paying the currently unfair rates then you're missing the elephant in the room. The PAYE earners aren't contributing to a system that's fair for all, they're subsidising the non-PAYE earners who are paying next to nothing.

Once we sort that out, we can get started on the corporations that are paying next to nothing. But we won't do that, because we're a nation of idiots; we'll keep sniping at each other instead because that's the English way.

...and me on 25k gross would pay 5k income tax well exceeding today's where I pay 20% on everything above 12.5k or about half. I believe low income workers (not including myself) would find it prohibitive however I expect you will be proposing a Gordon Brown type redistribution as well.

adidan · 9 Jul 2023 at 13:19

Dirk Diggler said:
Pfft, like you can afford a violin.

Only a tiny one

Jokester · 9 Jul 2023 at 13:22

aspiring said:
Well the investments could go down significantly compared to what you put in?

Well yeah, but if the markets went down by more than 60% and then didn't recover in any meaningful sense within a couple of years, you're going to have a lot more to worry abouth than losing a bit of cash!

platinum87 · 9 Jul 2023 at 13:25

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.

Because the communists outnumber us, all with hands out mouths open and drooling, wanting things for free, but covering that up by spouting ideology.

peterwalkley · 9 Jul 2023 at 13:30

According to this website: https://www.uktaxcalculators.co.uk/world/tax/compare/united-kingdom/against/australia/ at £100K you end up paying slightly more tax in Oz vs the UK.

The property price part of it really depends on the move: both countries have huge variation depending on location.

Dirk Diggler · 9 Jul 2023 at 13:35

Hagar said:
...and me on 25k gross would pay 5k income tax well exceeding today's where I pay 20% on everything above 12.5k or about half. I believe low income workers (not including myself) would find it prohibitive however I expect you will be proposing a Gordon Brown type redistribution as well.

Well, if it makes you unhappy then it must be working, right?

sigma · 9 Jul 2023 at 13:53

adidan said:
Only a tiny one

World's smallest won't be cheap though!

dave28 · 9 Jul 2023 at 14:32

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?

Australia as in where 20 out of the top 25 most deadly snakes in the world live and heat that can make you collapse.

I would rather pay more tax.

413x · 9 Jul 2023 at 14:34

dave28 said:
Australia as in where 20 out of the top 25 most deadly snakes in the world live and heat that can make you collapse.

I would rather pay more tax.

Australia has a better standard of living (I believe), better healthcare, better weather if you earn a good amount.

MichaelAwkward · 9 Jul 2023 at 15:20

413x said:
Australia has a better standard of living (I believe), better healthcare, better weather if you earn a good amount.

Better weather is subjective - I'd take the UK over most countries in the world tbqfh when it comes to weather. We love to moan about it but it's actually the best in the world most of the time. Not too hot, not too cold, not too wet, not too windy, no snow.

Climate change is going to make parts of Australia even more uninhabitable than they already are.

Freefaller · 9 Jul 2023 at 15:22

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.

This 100k isn't really that much. For a single person, sure, but for a family person with a couple of kids, it's amazing how little you're left with. We should just have a flat tax rate for everyone.

Once you get to 100k you just increase your pension contributions and so on to try and keep underneath it - or if you're earning over 125k you have no more personal allowance... At that point in time you can possible start asking for shares/dividends etc... but it's daft to think that people don't try and minimise their tax liabilities (legally) - they do that because the system penalises people who earn well.

"andy" · 9 Jul 2023 at 16:19

Our tax system isn't too bad compared to other countries. It's the awful use of the money by those in charge that I have problems with but that's another thread

Main thing I would try and change (no idea how) is the taxation of overtime or second jobs. At a time where some industries are struggling with labour/skills shortages it seems madness to punish those who trying to fill the gaps.

aspiring · 9 Jul 2023 at 16:26

Freefaller said:
This 100k isn't really that much. For a single person, sure, but for a family person with a couple of kids, it's amazing how little you're left with. We should just have a flat tax rate for everyone.

Once you get to 100k you just increase your pension contributions and so on to try and keep underneath it - or if you're earning over 125k you have no more personal allowance... At that point in time you can possible start asking for shares/dividends etc... but it's daft to think that people don't try and minimise their tax liabilities (legally) - they do that because the system penalises people who earn well.

100k isn't that much?

You got to be joking.

Its 6 figures

Freefaller · 9 Jul 2023 at 16:27

aspiring said:
100k isn't that much?

You got to be joking.

Its 6 figures

And? does that magically make you rich? As Jokster said you effectively get taxed at 60% as soon as you go over 100k. Which is why I suggested we need a flatter tax structure.