For the record IR35 can be interpreted in many ways and not all roles/positions are included by the definition.
Example - MOJ roles have differing levels some are in IR35 some are not.
So even a civil service organisation has the right to define whether IR35 applies or not.
Yep all those tax havens across the world where you meet ex-pat Brits, they are just there for the nice weather
So how about actually dealing with the problem, rather than trying to compete with them. A race to the bottom will never benefit the majority of society. Unfortunately the UK government has always been one of the blockers when international agreement has been sought to tackle tax havens, and now we see their plan.
So how about actually dealing with the problem, rather than trying to compete with them. A race to the bottom will never benefit the majority of society.
Well I thought this but didn't post it I I assumed I be accused of further arrogance. This of course implies what is being ignored here; there are higher tax bracket earners, then there are the filthy rich who exploit loopholes etc. We need to decide whom we are discussing vis a vis should bike buoy and ransos be contributing their additional 2019 earnings to the state, or actually we should be celebrating their success as middle of the road industrious workers that have faired well for themselves and going after the tax avoiding ex pats?
Allowing everyday people to earn more money then penalising them back to the national average for doing so is as you say, a race to the bottom of a society with no drive or ambition who is forced into financing the state even further.
@MSP I completely agree actually. The UK is complicit in support tax havens. However while they exist adding tax burden to the top 0.1% wont stop them moving to tax havens.
Allowing everyday people to earn more money then penalising them back to the national average for doing so is as you say, a race to the bottom of a society with no drive or ambition who is forced into financing the state even further.
In this budget we are told of the challenges to society, we have some choices to make. Public sector pay has been running at pay cuts for the last few years. Schools have been underfunded, the health service has been, we need to pay more for a basic level of services.
Out of all of those if you can honestly say giving a tax break to people is the top priority for a nation then that is up to you.
In this budget we managed to find a one off £50 for each secondary school pupil.
That should put in perspective the point where giving somebody on £50k a tax cut really. Of course you can vote and school pupils can't.
or actually we should be celebrating their success as middle of the road industrious workers
If you are a 40% tax payer you are not middle of the road. Someone posted a graph a week or so back. I was top 10% in UK I think and I'm under the 40% tax bracket...before and after budget.
Last time I looked it was some thing like
Top 1% pay 30% of all tax
~15% are higher rate tax payers and they pay ~36% of tax
~82% are basic rate tax payers and they pay ~33% of tax
remainder are mainly savers.
Instead of arguing about tax take maybe you guys could check out modern monetary theory.
Particularly Stephanie Kelton.
Government can spend before it taxes. Tax mainly to control inflation.
A sovereign country can't default and any talk of inflation or hyperinflation usually means your economy was already screwed.
One day a government will try and implement this instead of debating deficit as a restriction.
I can’t see many rich people fleeing Britain at present, can you? Seeing as post-Brexit London will effectively become the worlds biggest tax haven.
If you are seriously rich (millions a year not 100k) you have the means to move money and not pay tax.
it goes down to how you want you cities and workforce. There needs to be something to aspire to to motivate some people to work. This could be money, car, house, holidays, job satisfaction etc. Money is an enabler, if we were truly a global country we would have a flux of young professionals. In this magical world people do move between tax regimes. Trouble is with high tax you have trouble attracting overseas companies and talent.
people don’t move because by and large the UK is quite tolerant and generally alright lifestyle for the cash. Social services are not based on how much you have paid in and by and large you won’t be left to starve and die. It could always be better but that will always be the case.
The dynamic of salaries, recruitment and location focuses during and following Brexit will be interesting
In this budget we are told of the challenges to society, we have some choices to make. Public sector pay has been running at pay cuts for the last few years. Schools have been underfunded, the health service has been, we need to pay more for a basic level of services.
Out of all of those if you can honestly say giving a tax break to people is the top priority for a nation then that is up to you.
In this budget we managed to find a one off £50 for each secondary school pupil.
That should put in perspective the point where giving somebody on £50k a tax cut really. Of course you can vote and school pupils can’t.
That's fair but don't forget that those are not necessarily separate groups, people who work in the NHS can be on £50k and can have kids at school.
Often people assume that all higher rate earners are Phillip Green types who have lots of millions, dodge tax and spend all day on super yachts while their workers work 20 hour days for minimum wage on a zero hours contract.
It was discussed on the savings thread the other day but 1 person earning just over the higher rate threshold while their other half doesn't work is far worse off than both partners working on lower salaries.
It is far from simple.
That’s fair but don’t forget that those are not necessarily separate groups, people who work in the NHS can be on £50k and can have kids at school.
Yes they can, but that does not mean their contribution to taxation would be different.
Often people assume that all higher rate earners are Phillip Green types who have lots of millions, dodge tax and spend all day on super yachts while their workers work 20 hour days for minimum wage on a zero hours contract.
Not at all, just we have chosen to make a tax cut and reduce the amount collected.
It was discussed on the savings thread the other day but 1 person earning just over the higher rate threshold while their other half doesn’t work is far worse off than both partners working on lower salaries.
That they are, but it is also in many cases a luxury to be able to do that.
I agree it's far from simple but, people have to make choices.
Last time I looked it was some thing like
Top 1% pay 30% of all tax
Last time I saw a stat like that it was a crock of shit that only counted income tax as "tax".
Last time I looked the poor paid about the same percentage-wise as the rich in tax. It might have been a little more or a little less, depends how you slice it.
Last time I looked it was some thing like
Top 1% pay 30% of all tax
Last time I saw a stat like that it was a crock of shit that only counted income tax as “tax”.
Last time I looked the poor paid about the same percentage-wise as the rich in tax. It might have been a little more or a little less, depends how you slice it.
Got sauce for that?
Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
Not only is there no evidence for this assertion (read; threat) made by the wealthiest in society when tax is discussed, there is strong empirical evidence that it doesn’t happen. The stark fact is that you could tax at 100% above say 200k income and those individuals would still have a fantastically privileged lifestyle in their chosen country, with their family, friends, society, privileges etc. An income of many magnitudes greater, but NOT in their chosen country would not have the same quality. These people are VERY comfortable and VERY settled. This doesn’t mean they won’t employ exceedly clever accountants to fiddle their way out of paying the tax though, which is largely what happens already.
5lab I like ketchup with my crock of shit!
The fact that the more people earn the more income tax in total they pay is an irrelevance. This is always going to be the case and nothing is ever going to change it under any shade of government
How much people pay as a proportion of income (income tax, NI, VAT) etc is much more important.
How much people pay as a proportion of income (income,NI, VAT) etc is much more relevant.
Yep VAT and Council Tax is generally considered regressive.
Access to savings and tax free pensions also help those on higher incomes much more.
But still the poor should just get better jobs and then it would all be fine.
We don’t want facts!
We want speculation!!
🤣
A while back @ransos denied that the higher paid ended up paying a higher percentage of tax. I put some numbers into the calculator on moneysaving expert.
Earn £20,000 in 2018/2019 and you'll take home £16,983 - a rate of 15.085%
Earn £50,000 in 2018/2019 and you'll take home £37,019 - 26%
Earn £100,000 in 2018/2019 and you'll take home £66,019 - 34%
Earn £125,000 in 2018/2019 and you'll take home £75,776 - 39%
Earn £150,000 in 2018/2019 and you'll take home £90,276 - 40%
Which seems fairly clear. For some context, a household needs to be earning about £40k before they pay more in tax than they can receive in benefits, and earning over £162k puts you in the top 1% of income tax payers.
I'm also a bit surprised that no-one has yet complained about the 60% tax rate between £100k and £122k, which is the highest tax rate in Europe.
A while back @ransos denied that the higher paid ended up paying a higher percentage of tax. I put some numbers into the calculator on moneysaving expert.
Just add in VAT, Council tax, take off the savings for pensions and ISA's that having more disposable income gives you etc.
You are only looking at a single form of taxation rather than the tax burden.
Tonyg also posted the facts of income tax take which shows the burden of tax on low income increasing and that on high income falling.
Yep VAT and Council Tax is generally considered regressive.
doesn't VAT depend on how much of your income you spend? ie spend 50% of your income (whatever that income is) and your VAT is 10% of your income?
Thus if you spend more on luxuries (which attract 20% tax) than staples (which are generally vat-free or reduced-vat) then you'll be paying a progressive tax?
I’m also a bit surprised that no-one has yet complained about the 60% tax rate between £100k and £122k, which is the highest tax rate in Europe.
Suprised ?
Folks don’t know that rate even exists.
Your figures are pretty accurate, but the table doesn’t extend enough to capture all.
’m also a bit surprised that no-one has yet complained about the 60% tax rate between £100k and £122k, which is the highest tax rate in Europe.
have I missed something?
doesn’t VAT depend on how much of your income you spend?
Rich and poor people still need to eat, be clothed and heat their homes. I don’t accept that as a simple number poor people generate more VAT revenue. Rich people probably spend more overall due to them having more disposable.
the burden on the person is different as a proportion of income which is why i is considered regressive but you can’t do a salary check in Sainsbury’s... You could off course just eliminate cash and issue people with vouchers for food, housing etc. then it could be equalled
Rich and poor people still need to eat, be clothed and heat their homes. I don’t accept that as a simple number poor people generate more VAT revenue.
No one is suggesting that. The point is that it is a higher proportion of their income. Regressive taxation.
A regressive tax takes a higher percentage of earnings from lower-income people than those with higher incomes. Most regressive taxes aren't income taxes. They take a larger proportion from low-income people because they have less money left over after the tax.
Sauce; https://www.thebalance.com/regressive-tax-definition-history-effective-rate-4155620
The 60% between £100K and £122.3K is not correct. What happens is people progressively lose their zero tax break on their first £11.8K earned when they earn over £100K and lose it all by £122.3K. Hence Income tax and NI above £122.3K is total 52% and 57% over £150K (additional rate).
Although the Danes will tell you that they all pay more tax!
So the rate on every pound earned between those numbers (the marginal rate) is 60%.
yes its a marginal rate rather than a tax rate since you are paying back the earlier tax break - it is the very definition of a first world problem......
Billy big baws (number 10) could perhaps pay the rest what they are worth and they'd be able to afford their own beer. Lets not pretend he didn't make his money on the backs of others.
It's indicative of a more general problem - the ridiculous complication of our tax system. NI should be abolished as it's regressive, and only really there to conceal the real rate of income tax. Have a sensible tax free allowance, and then a simple set of progressive tax bands. It would make HMRCs job a lot easier, and help employers and employees too.
The 60% between £100K and £122.3K is not correct. What happens is people progressively lose their zero tax break on their first £11.8K earned when they earn over £100K and lose it all by £122.3K. Hence Income tax and NI above £122.3K is total 52% and 57% over £150K (additional rate).
What are you talking about, no-one loses the tax free allowance.
The effective tax rate on (ie tax and NI combined) at 150k is about 40%. It actually scales up more or less linearly from 0 earnings.
Everyone earning over £100k loses part of the tax free allowance until at about £123k it is nil. It isn't well known, but neither is it hard to check before saying it doesn't happen. Makes the effective rate of tax on that bit of income 60%.
Yeah but you can just lob 10k tax free into your pension to make up for it.
I'll take your word on the mechanics of it, but as a percentage:
earnings - £123,000
take home - £74,759
effective tax rate - 39.3%.
No one is suggesting that. The point is that it is a higher proportion of their income. Regressive taxation.
There are are people saying that VAT etc should be included in the calculation for how much tax people are paying as an argument that rich people don’t pay considerably more than poor people.
if it is assumed that rich people pay at least as much VAT etc as a poorer person then they effectively cancel out and the income tax simplification is as valid a measure as any.
Whag we havebis by no means a perfect system but it is better than pay at point of service for health, schools etc.
Yeah but you can just lob 10k tax free into your pension to make up for it.
Mike, you seem to by under an illusion that everyone in the higher tax bracket has a load of disposable income to throw around as they please - thats twice you've suggested higher rate earners do so. You need to get a little bit real, and read through this thread and through other sources and have a think about real-life disposable income for people with kids, debt, living in more expensive areas etc.
Not everyone is sitting on £10k able to "lob" it around the place. It gets a little tiresome when you make such an inaccurate suggestion.
Yeah but you can just lob 10k tax free into your pension to make up for it.
Only by salary sacrifice pension, shoving it in a SIP wouldn't help as it's decided based on taxable income. Wouldn't you need to shove any thing over 100k into the pension to avoid it rather than just 10k. Plus assuming you were paying an average amount into your pension anyway, you'd start to hit the 40k limit before too long.
Okay, here's my tuppence worth.
I was surprised to find out I'm on £49k a year, I expect that will break the £50k barrier with the next pay rise. So, by the current and coming definitions I am a higher rate earner. Curveball; I'm in Scotland where I am taxed at higher rate above £43330. Oh noes! In reality that means I am ~£824 worse off, next year that will rise to £1334 (back of paper calculation ignoring pension).
So, with that, I propose I'm going to move. I mean, I'm higher earner so I MUST be able to afford it, right? How much could it cost to move just south of the border? I mean I'd need a job with similar salary to do it, move my family, find my wife another job and find an equivalent house at the same value. That can't be too difficult. That'll show them!
Or, back in reality, I could accept that I was never going to see that money anyway (you don't miss what you don't have), accept that it goes back into funding the services and infrastructure used by myself and the people around me and be grateful for the fact that I have what is, at the end of the day, a job requiring no more qualifications than the average 16 year old walks out of school with with security, a pension and a damn good wage. That's before we even get into regressive tax like VAT and non-means tested benefits such as child benefit, state pension and winter fuel allowance.
I'd just like to say, what an absolute shitbox of a thread this is.
Thanks for your contribution Northwind, you can leave any time you like.
No 5lab, I don't have a source for my claim that lower earners pay a similar proportion of their income as tax. It might not be quite right, and the error might be either way. Rick people may spend more on luxuries but they also save more, especially in pension schemes where they get their 40% back as comes up on this forum often enough.. But anyway the tax distribution is certainly nothing like as skewed as some people try to make it sound.
Thanks for your contribution Northwind, you can leave any time you like.
Don't you dare talk down to Northwind you double-glazing salesman.
It's also interesting the idea that all higher rate tax payers are paying for lower tax payers. Lets examine that.
UK Government spending was 802 billion in 2017.
There's 31million tax payers.
802million/31million = £25,870 per person.
So for people to be paying their way, you'd need to be earning around £80,000 to be paying that in tax.
Isn't that 31 million income tax payers? Not all the governments income comes from income tax - e.g. council tax, corp tax, etc. Everyone contributes in terms of VAT etc.
Total income tax receipts were 181 billion - so that's only 2.6k per income tax payer. The rest presumably comes from borrowing and other tax reciepts.
Don’t you dare talk down to Northwind you double-glazing salesman
Pmsl...
