You can pay higher rate tax at 41% and 13.5 NI if you live in Scotland. Higher rate of 41% at £43k. Still paying 13.5 NI until £50k.
I changed jobs 3 months ago. My tax code, tax from the last remnant of the old job + the new one (changing mid month) is a total cluster. What it's going to end up with is having to do a tax return mid year and then see whether I owe them or they owe me. Bleedin hard to plan as it is opaque. I'm fortunate enough that we won't be going hungry. But the effects of the Covid mus-management (never mind £37bln wasted, more like £500bln) and the conveniently masked Brexit cost has to be taxed back. Which Richie and his Mrs won't be paying more for will they. No. Lower and middle incomes to fund it.
I always find it amusing when people say they pay the higher tax rate, aye fair enough mate, but lets have a look at the effective rate over your whole wage, you aren't really paying that much.
The whole Uk tax system is actually quite linear in that sense. You need to be earning above 170k before you are hitting an effective 40% tax rate. If you are sitting in the 50k, you are about a 27% effective rate.
This is for Scotland(England won't be far off, the linear rise will be similar) and I've used the 12.5k threshold for the full year (couldn't be doing with melting my brain with that 3 month weirdness they are doing)
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That chart makes my skin itch.
So, over £200 down on the family income this month
I appear to be £30 down... I expect we'll cope.
But you don’t pay 50% tax above £150k
They certainly don't but they pay more than under 150K. Anyway the point is the person claiming they paid more than half their bonus in tax is either lying or if telling the truth they need to contact HMRC as they have been over taxed.
Okay I got my bonus before the NI change earlier this year but after deductions it was 57% of gross.
That chart demonstrates the NI thing well. I wonder what the 15K line looks like (that's pretty much the £300 per week example which was raised yesterday)
But look at the 20K and even 30K, they might be getting on for national average wage (is that actually mean, mode or median) - but these are not rich people or families. A £10K increase from 20-30 and you lose £1300 of it to NI
A 10K increase above 50K and you lose £350 of it. £110-120K - yep, £350 of that extra £10K goes to NI and the NHS.
That simply can't be right. Higher earners need to shoulder more of the burden, when in a rich western nation lower earners are queuing at foodbanks.
That simply can’t be right. Higher earners need to shoulder more of the burden, when in a rich western nation lower earners are queuing at foodbanks.
That's exceptionally hard to argue with... but can you really see anyone putting that in place ?
I mean, even hitting people at over £200k a year with an extra 1% would have to make a MASSIVE difference wouldn't it... But i just can't see a government doing that.
'a' government, or this Government. Who's been excused paying a fair share? The wealthy, and well off pensioners. Who's likely to vote for them next time.....
Been done to some extent. From 2007 to 2019 the top 1% of earners share of income tax increased from 24% to 30%.
42% of adults paid no income tax.
To my mind jiggling tax rates isn't the answer.
Things like if we are to have a BBC it should be paid from tax not a flat rate licence fee.
If the govt wants to subdidise wind or solar energy they should be a govt expenditure from tax not added on to bills
Those two changes would make 42% non tax payers and other around £500 a year better off.
FWIW @kerley @jam-bo @thegeneralist i don't pay a single penny in UK income tax, or NI, i haven't for near enough 2 decades. So no, i don't earn over £100k. No way near.
Bonuses get taxed at well over 50% here.
Good luck once you’ve spoken to them, I live in constant state of owing tax as I paid too little or getting refunds as I paid too much (a £700 refund last year). I’m PAYE so not exactly a challenge to work out FFS, I have no other incomes and I’m not employing an accountant to game the system for me, so how it’s so constantly wrong I have no idea.
It's because you're paying high(er) rates of income tax, but maybe by not much so the 'system' isn't 100% sure how to properly through the year - only knowing at the end how much you're actually due to pay.
That graphic of gross to net is missing a lot of elements that most folk have.
Student loan deduction for example, someone earning £35k will be near enough £80 pcm (earn £50k and it's nearer £200), and never paid off - so it's a tax.
So at £50k, the 28% tax becomes 32% tax.
and I’m not employing an accountant to game the system for me
It could be worth it, 4 years ago I was recommended a £100 service from an accountant to sort out hmrcs mess for me and she found me a decent credit in excess of what it cost with PAYE back on the straight and narrow.
Oh, and FWIW, over here personal allowance is only about 120 quid a month, and our supertax bracket (at ~52%) starts at about £42k.
Bonuses are apparently taxed at 57% On the entire value.
I personally still have less total deductions than in the UK. So that's nice.
Been done to some extent. From 2007 to 2019 the top 1% of earners share of income tax increased from 24% to 30%.
actually, the rate increased steadily through the noughties and then has substantially levelled off since 2010.
https://fullfact.org/economy/do-top-1-earners-pay-28-tax-burden/
Can't think why it would change in 2010?
mert, you can see the confusion. A thread discussing UK tax and NI and you start whining about tax on your bonus when you don't even live in UK!
I always find it better to come from the angle of what a person is taking rather than what they are giving. i.e. someone taking £100K versus someone taking £10K.
It stops the why should I pay more tax question as people tend to think about why they are taking/receiving so much more than the £10K person.
That simply can’t be right. Higher earners need to shoulder more of the burden, when in a rich western nation lower earners are queuing at foodbanks.
Here we go again!
I'm going to put my head above the parapet on this one. I am very, very well paid. But it does get quite annoying when statements like this get made. In the last tax year I paid just over 43% of my income in direct taxation (Income tax plus NI). That's the average by the way NOT the marginal. Also living in Scotland the marginal rate my bonus was taxed (Income plus NI) at was 48% so not that far off half. To be clear I do not begrudge paying taxes, I'm not on the poverty line, and no the cost of living won't really impact me but what share of income should people like me be expected to pay?
gonefishin, i guess the question is, could you live with less, i presume possibly. could someone on minimum wage/benifits live with less, probably not?
Does anyone else feel like this is the start of a new way of living. Climate change will drive energy scarcity, which will drive people to extremes and cause more wars and conflicts, which will make the energy crisis worse. inflation and living costs rise. At some point everyone will hurt, its just a case of when?
or is this all a bit too much doom and gloom, and pessimism?
gonefishin, i guess the question is, could you live with less, i presume possibly.
I'll let you know in year as I'll be earning less.
This was a response to the rather glib statement that always rolls around that "high earners should pay more" when many don't necessarily realise that they (we) already pay quite a lot. Personally the changes I would make are
Treat capital gains as income and tax them accordingly.
Combine NI & income tax into one thing (that simplifies things and treats dividends a real income)
Make the sale of you personal home liable for CGT (well income tax if you do the first one) the same as any other asset. After all that is where most of the wealth in the UK is "stored"
Make inheritance tax payable by the recipient as income in the year it is received.
Those are ideas that would actually tax the wealthy not just those on high incomes.
I don't think continually squeezing PAYE is the answer. I actually don't understand why those at the top of companies need to earn so many multiples more than the workers either, most, from my experience aren't any more bright or harder working. I would like to see a much fairer distribution of salaries not tax....
And we really need to go after the waste in the system, the back handers, the excess company profits. Make our money go further, not just raise more to throw on the flames of ineffiency
We are fortunate, I moved roles specifically because of the cost of living crisis, and had a small increment, missus had a decent payrise. Overall we are about £40 pcm better off. But then we get smashed by an increase in utility bills of £150 (and likely to increase) and all the other cost of living increases. I guess we are £250pcm worse off. We are lucky that we can tighten the belt and have dropped some DD's to cover some of the shortfall
I don't think we will have energy scarcity. I think the Government's have relied on Fossil Fuels for so long, the switch to renewables has just not been as swift as they should have been.
Take Nuclear - 4 years ago Wylfa Power station on Anglesey should have had a new build, but due to costs sod all has happened. Maybe now they can start to build new reactors on already functioning nuclear sites. Its just a matter of cost and a willingness from Government to pull their finger out and invest. The sites are there, the tech is available and the support infrastructure is already in place.
This was a response to the rather glib statement that always rolls around that “high earners should pay more” when many don’t necessarily realise that they (we) already pay quite a lot. Personally the changes I would make are
I don't get that either, here have a proportionally bigger penalty for doing better than average.
To be clear I do not begrudge paying taxes, I’m not on the poverty line, and no the cost of living won’t really impact me but what share of income should people like me be expected to pay?
Do you want a direct suggestion? Then how about 50%?
Less direct? If more money needs to be collected in tax, I'd rather you paid a bit more than someone struggling to feed their family, for the reasons you've outlined yourself. You're doing okay, others are struggling for the basics of life.
here have a proportionally bigger penalty for doing better than average.
So, if more tax needs raising on earners (not sure it does, but hey), you'd rather the additional "penalty" be born more by those doing "worse than average"?!? Don't view direct taxation as if it is a "fine", but more about raising funds based on ability to pay, or about redistribution to help deal with the fact that some people are paid far more than others due to different kinds of work being valued (in money terms) very differently.
kelvin
Full Member
here have a proportionally bigger penalty for doing better than average.So, if more tax needs raising on earners (not sure it does, but hey), you’d rather the additional “penalty” be increased for those doing “worse than average”?!?
No, where did I say that? The table up there clearly demonstrates that the more you earn the more (%) deductions you pay, so why should it therefore be loaded further at the top end?
If you take the average wage (full and part time) from 2021 as being just over £25k you'll hand over approximately 15.8% of your hard earned or around £3950 pa / £330 pcm.
So if you earn a big fat £100k per year, 4 times the national average, you'll give up £36000 pa or £3k pcm in deductions or 36% of your earnings, which unless you're absolutely shite at maths you can see is around 9 times more actual GBP for earing 4 times more. So why therefore should higher earners be subject to even more deductions?
Until we have a Govt that doesn't deliberately pi55 away my taxes, whether through incompetence and/or fraud I'm not willing to pay any more.
Also, after the 2019 GE I don't GAS anymore about paying more for the less fortunate.
Far too many of those folk decided to vote for a policy that makes my life harder, more expensive and with less options/freedoms - so **** 'em.
Note, I have never in my life voted Tory, UKIP, NF or even LibDem, and never will - previously 100% Labour and since living in Scotland, SNP.
how about rather than squeezing a few more quid out of higher rate tax payers, we look at why someone paid 'the living wage' still has to claim benefits to survive while the likes of tesco and amazon post record profits and pay **** all in tax.
how about rather than squeezing a few more quid out of higher rate tax payers, we look at why someone paid ‘the living wage’ still has to claim benefits to survive while the likes of tesco and amazon post record profits and pay **** all in tax.
Get out of here, that makes way too much sense 😀
so why should it therefore be loaded further at the top end
Because if more tax needs raising from earners (I'm not convinced it does), those further at the top end can afford it and still have a comfortable life.
while the likes of tesco and amazon post record profits and pay **** all in tax
A very good point. Shifting the tax burden from companies to people has been the pattern for years now. But we still need to accept that when raising tax from people, there is a choice to be made... you can base it on ability to pay, or worry about the "fairness" of the well off being asked to contribute far more than those struggling, and people being asked to pay even more proportional at the "top end" than those in the middle.
I don’t think continually squeezing PAYE is the answer.
I agree, and I think gonefishin has some good points.
I mean, going by the chart above, he earns in one year almost what I have earned in my entire adult life so far, and I'm 42. So maybe putting PAYE back up to, say, 2011 levels wouldn't hurt too much.
But the tax system here is opaque, full of loopholes, and very much favours the ultra-wealthy, who somehow contrive to have no 'income' and yet astonishing amounts of wealth. But as long as our parliamentary houses are full of people who literally grew up in castles, we'll never tackle that elephant in the room.
tesco and amazon post record profits and pay **** all in tax.
and this!
I'm sure someone smarter than me has done the maths, but if you took into account the tax credits paid to low paid workers, would it actual end up that the goverment is subsidising Amazon to operate in the UK?
The "do away with tax credits" idea is great, 'till the result is people starving and freezing. Just chase these companies for a proper share of tax, and make them pay a proper living wage to everyone that does work for them. If that works, then the need for tax credits wanes. It doesn't work the other way around... removing tax credits will not magically force companies to pay higher wages (or however they pay for work) and contribute more in taxes.
i wasn't suggested that we did away with tax credits, more that the existence of tax credits in the first place demonstrates how ****ed up the system is.
whether i pay 40% or 45% is chicken feed compared to what the corporates are getting away with.
would it actual end up that the goverment is subsidising Amazon to operate in the UK?
Oh, massively, in several ways. Not just by paying people **** all.
Taxing "earners" more doesn't really work very well though, you need to tax the non-earners, people who just sit there and watch their wealth grow, and corporations who avoid tax and underpay workers.
theotherjonv
Full Member
That chart demonstrates the NI thing well. I wonder what the 15K line looks like (that’s pretty much the £300 per week example which was raised yesterday)
10 to 50k in 1k increments if any use to you.. for Scotland mind.
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As I say, I've not included the 3 month at the lower 9.8k threshold(so there might be a little more to pay in NI over the year), as I'm not sure how that'll work tbh. Tax is calculated over a full year, so most people won't even be by the 9.8k threshold in the first 3 months.
I'm actually curious about that myself, as I'm self employed, and obviously I just calculate tax at the end of the year. So confused as to how that calculation will work in practice tbh.
So confused as to how that calculation will work in practice tbh.
Same here. I have no idea.
This was a response to the rather glib statement that always rolls around that “high earners should pay more” when many don’t necessarily realise that they (we) already pay quite a lot.
I don’t get that either, here have a proportionally bigger penalty for doing better than average.
Wow, just wow. The combination of stupidity and selfishness on show here is quite staggering.
Words (almost) fail me...
kelvin
Full Member
So confused as to how that calculation will work in practice tbh.Same here. I have no idea.
Not sure if they will calculate it or not, but 12.5% of 12571 - 9881 = £336 so might be worth just keeping that extra by just in case. (guess you could divide that 336 by 4 if you are feeling it tight mind you and just keep an extra £84 by for those 3 months, but who knows how they'll calculate it, so could get stung).
Just seems a bit mental not to apply the threshold rise in April.
Wow, just wow. The combination of stupidity and selfishness on show here is quite staggering.
Was it just that part of my post that offended you? What about the next bit where I suggested some changes? Do they count as selfish too?
Here’s another reality check. If you increased the tax take from the top 1% of earners (that’s everyone over £120k) by 10k you would only increase the UK tax take by about 1% and that won’t make much difference at all.
mean, even hitting people at over £200k a year with an extra 1% would have to make a MASSIVE difference wouldn’t it… But i just can’t see a government doing that.
In absulote terms probably next to nothing. There simply aren’t enough individuals to which it would apply.
weeksy
Full Member
I mean, even hitting people at over £200k a year with an extra 1% would have to make a MASSIVE difference wouldn’t it… But i just can’t see a government doing that.
They actually have done that, the upper rate for NI, over 50k, has gone from 2% to 3.25%.
tbh I don't really have a great issue with the way this tax rise has been done, if they have to do it, they have done it in the right way imo.
I'm a billion miles away from being a tory btw. 😆 Feels kinda SNPish in it's tone tbh.
Was it just that part of my post that offended you? What about the next bit where I suggested some changes? Do they count as selfish too?
I thought your other suggestions were pretty good. My comment was limited to the discussion around whether it's 'fair' that high earners pay a higher rate of tax than low earners.
For once we were having a half sensible conversation then thegeneralist gets nasty and personal. Remember that thread Mark put up a month or so ago. You may not agree with the sentiment of the comments but making moral judgements just makes the discussion toxic. Please play the argument not the man.
