Learnt something - thanks.
Tax - Wheres the incentive to earn more
- Thread starter ProStreet
- Start date
Fortunately you can reduce your tax liability by dumping more into a pension via salary sacrifice.
You're only deferring your tax liability to when you retire.
Not at an effective 60% though, and this tax you speak of is not limited to those earning 6 figures.
Or direct contribution and then self assessment.
Not got a lot to say on your situation personally OP but the interest rate on these new style (not so new now I guess) student loans is absolutely ******* absurd. Let's create a situation where people are being charged 3x what the old system cost AND dramatically increase the interest rate. Fantastic idea. What utter ******* moron dreamt that one up. I've bought frivolous things like cars with much lower interest rate loans ffs.
Glad my loans were plan 1 is all I can say - they dropped really quickly without any additional input from me once I started earning about what you do.
Glad my loans were plan 1 is all I can say - they dropped really quickly without any additional input from me once I started earning about what you do.
If that is the case then why doesn't OP take a lower interest loan and reprofile the debt?
Soldato
Because then they would have an enormous unsecured loan that has to be paid no matter what. Plus, might not be easy getting a 30 year personal loan.If that is the case then why doesn't OP take a lower interest loan and reprofile the debt?
Old pensions were also amazing value. The maths behind them were total garbage but the people who got in did well out of them.
Complaining about how the new finances are worse than the old finances on the basis of "I'm paying more" is leaving out most of the picture isn't it.
Soldato
PAYE gets screwed always. There is really no middle incentives in that space to earn more. You have to get to that 250k+ earnings for it to matter less really, but even then it's not "attractive" as it's so much harder as a PAYE to use anything to streamline tax.
Become director of your own company, pay yourself minimum wage for 30yrs, don't pay it off
Become director of your own company, pay yourself minimum wage for 30yrs, don't pay it off
There is never a reason financially to not want to earn more. You can't be worse off from suddenly getting a pay rise. You only pay tax on the amount over each threshold and you can always offset things as discussed already.
With reference to the child benefit thing that's a whole different argument and an unfair and stupid system. I say this on the basis that 2 x household earners can make £49,999 each totalling just under 100k household income and get the full allowance, and yet someone earns 60k as a single earner, they get zero child benefit allowance for their household.
You are on the housing ladder, have a salary of 70k and a BTL house and come on here complaining of the amount of tax you owe? Do you understand how that makes some people feel that read comments like that who are in a rent trap with low salaries struggling to keep their jobs?
With reference to the child benefit thing that's a whole different argument and an unfair and stupid system. I say this on the basis that 2 x household earners can make £49,999 each totalling just under 100k household income and get the full allowance, and yet someone earns 60k as a single earner, they get zero child benefit allowance for their household.
You are on the housing ladder, have a salary of 70k and a BTL house and come on here complaining of the amount of tax you owe? Do you understand how that makes some people feel that read comments like that who are in a rent trap with low salaries struggling to keep their jobs?
Soldato
Over here your tax is lower based on your dependents; so 3 kids is the magic number for tax efficiency. I have three lol saying that the brackets are very similar to the UK:
- Up to €10,084: 0%
- €10,085–€25,710: 11%
- €25,711–€73,516: 30%
- €73,517–€158,222: 41%
- €158,223+: 45%
Sounds like the higher interest rate is justified then.
Well renting is not all that bad.
Tenants get security, flexibility and don't have to worry about anything. Ive been a landlord for 12 months and trust me, it's a nightmare and not worth it. You don't make any money. You take the risk of tenants not paying. Flats have gone down in value (ive lost about £50k of value on the flat, and that was before my tenants flooded it, and guess who has to pay....).
I'm very good to my tenants by the way, probably too good. I respond to them immediately, always on hand to come over and fix something if needed.. (the oven broke on a Sunday, I ordered the part and came on bank holiday Monday to sort it etc etc). But it's just completely messed up how the government treat landlords, especially during the pandemic. Most landlords c70% only have one additional property btw, it's not like we're millionaires.
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Pensions and student loans are not comparable though. Companies being unable to fund their pension schemes has nothing to do with (politically/ideologically motivated) austerity imposed upon the nation in the wake of the GFC resulting in increased tuition fees. Many other wealthy countries, including Scotland, manage to provide free or very cheap tuition and it seems to be working out well for them.
Soldato
In a commercial sense perhaps.
But loading people with a significant extra tax burden the likes of which the highest earners managed to get removed (the 50% top rate was apparently too much to stomach) for pursuing an education made almost essential by decades of job spec creep, is pretty reprehensible in a social sense imo.
Not for the OP. He's in the top 3 or 4% of earners 5 years out of uni. He's fine.
But for those on £30k-£40k (average pay for those with a degree) paying it for the entire time period they might be looking to start a family.... It's not on.
Now I have no desire to be a landlord because of the other points that you raise but - surely the main point isn't to make money? It's to gain an extremely valuable asset while largely paying for it with someone else's money?
If you're expecting to get the house paid off and have an ongoing income from it then you might be expecting* too much.
* By which I don't mean that is impossible. But just it's better considered a bonus than an expectation.
it's a similar story with your wage complaint. You're complaining that you don't get to take home as much of your extra earnings as you would like - by comparing to people who do get to take a higher percentage specifically because they earn a massive amount less than you.
Basically everything you're complaining about is a direct symptom of you being extremely well off. I don't think you realise how lucky you are.
Yes I realise I may be coming across in a bad light..
The only reason why I am a landlord is because I couldn't sell my flat during the pandemic, and was going mad stuck in a flat, so my partner and I bought a house together. Yes I know most people can't afford to buy at all.
I know I earn more than most. I did work hard to get where I am and even missed 5 years of secondary school in the process (through no fault of my own).
Maybe i should feel better about my position but I don't seem to think like that.. I always want more for myself.
I can't agree with the idea that Scotlands finances are in any way sound or a model to follow.
Scotland has the most spent per citizen in the whole union and spends £15B more than Scotland collects in taxes.
And in glorious hypocrisy the SNP shot down a £191M package from the UK government to support Scottish universities suffering recent financial problems because it doesn't suit the Scottish independence image.
Scotland isn't capable of paying its own bills and the SNP is full of **** about how they'd fix the deficit with independence.
Shoving the entire burden of higher education on those who succeed has its downsides but someone has to balance the books eventually and it's not going to be the poor.
Soldato
The real philosophical dichotomy of those that get called 'successful' is that they are anything but.
Absolute slaves to 'achievement' or 'wealth' or just plain 'greed' (see Gecko), they general fail to really self-actualize in the sense of appreciating genuine happiness, which is surely the real 'success'.
Total sociopaths
