[Closed] Since when did the HMRC lower the 40% Income Tax threshold to £34k?

It's the use of "rich" as a synonym of "income" in that calculator that's causing me problems, and I suspect you'd agree they're not the same things; you can be rich with no income and poor with a "relatively" high income.

They're not the same but there's often a fairly large correlation between the two. And as above, I'm fairly sure these things are meant as a general indicator to make you think, not an exhaustive study. Shame some people have to ignore that and focus only on a fairly irrelevant criticism.

Do you really not think most people in this country are very well-off, on a global scale, taking into account living costs?

I suspect you'd agree they're not the same things;

you can be rich with no income and poor with a "relatively" high income.

Maybe I shouldn't have confused things by introducing the word "wealth"!

"I am not sure how you can be poor with a high income tbh."

high debt to service.

Define comfortably. I know plenty of people who live in/around London on much less than that and have perfectly happy lives. It shows an amazing lack of awareness of how many (most?) people live to come out with stuff like this. I guess for some people 'comfortable' means having a big house, driving an expensive car, having the latest fashions and tech, luxury holidays etc.

Do you live in the south east? Take woking for example - if I was renting my old one bed flat it would cost minimum of 800 per month in a not great part of town, plus 1100 a year council tax, plus bills. Thats 12 grand ish gone straight away. Then add on to that 3 grand for commuting to london and that 20k is starting to look pretty unrealistic.

Comfortable for me is running a old cheap car (5 year old bottom of the range mondeo estate), having a 3 bedroom house, buying clothes once in a blue moon, and having a couple of holidays a year to somewhere nice (but fairly cheap). That takes a load more than 20k. I'm not asking for any sympathy whatsosever - I just work fairly hard to ensure that I can do all the above - i'm just pointing out that London and the home counties is pretty different to the north of england.

"I am not sure how you can be poor with a high income tbh."

high debt to service.

i'm just pointing out that London and the home counties is pretty different to the north of england.

i only know of it because i know someone whom i worked with who had an income of 45k plus bonuses which for me would be "well off/pretty close to being rich without excess"

but was poorer than a gnats fart due to a massive interest only mortgage on a house that he couldnt shift for anywhere near what he owed. (as there was an excess of houses due to the RAF base closing in the town) and a bunch of debt for flash cars etc that he no longer had.

So it could happen, i suppose, if you went mental on credit cards but had no assets to show for it. Ok it is theoretically possible but very very uncommon

Do you live in the south east? Take woking for example - if I was renting my old one bed flat it would cost minimum of 800 per month in a not great part of town, plus 1100 a year council tax, plus bills. Thats 12 grand ish gone straight away.

Living on your own is massively expensive though. I see no reason why living comfortably can't include a house-share.

Comfortable for me is running a old cheap car (5 year old bottom of the range mondeo estate), having a 3 bedroom house, buying clothes once in a blue moon, and having a couple of holidays a year to somewhere nice (but fairly cheap).

That broadly fits my definition too, but does one person need a three bedroomed house? We are a couple with three bedrooms and it's not really necessary TBH.

That takes a load more than 20k.

Not if you share rent/bills with other people IMO, even in London. Just googled houses in Woking - looks like you could rent a reasonably nice looking 4 bedroom house for £1500. That takes your rent down to £375 a month if you're sharing, plus you save loads on bills too.

It's also just about choices you make in life. If it's so much easier to live and have disposable income up north what's stopping you? Much better mountain biking too. 🙂

wrecker i like it !

Living on your own is massively expensive though. I see no reason why living comfortably can't include a house-share.

Three bedrooms = rooms for your bikes - everyone does this surely
**** the kids they can share

[i] i'm just pointing out that London and the home counties is pretty different to the north of england.

[/i]

No not really, just the difference of a hundred or so a month - taking into account that rent is cheaper but wages are lower.

Ok get your coat you pulled.

Yay! 🙂

Three bedrooms = rooms for your bikes - everyone does this surely

I have a separate utility room/workshop for my bikes. Doesn't everyone have one in the socialist utopia that is the north of England?

Not if you share rent/bills with other people IMO, even in London. Just googled houses in Woking - looks like you could rent a reasonably nice looking 4 bedroom house for £1500. That takes your rent down to £375 a month, plus you save loads on bills too.

True, but at some point wouldn't you want to live by yourself / with your partner? That's why I live in a 3 bedroom house - my wife and I brought it so we could potentially raise a family.

I lived in house shares whilst I was a student / in my twenties but I wouldn't want to go back to it, although I guess in theory I could. Unless you have a partner it may not be a choice anyway

"So yuo think the rich Ronney does not work hardfor his money either but we should let him keep it"

no not that he just shouldnt be paid that in the first place

sorry for long wait on reply but am busy earning/working

no not that he just shouldnt be paid that in the first place

sorry meant that much

Above we see one of the problems, @trail_rat suggests £45k pa is rich. So that would make sense that the 40% tax rate kicks in at the rich level. A lot of people on here would say £45k isnt't rich.

Here is another example, Bob Crowe earns £100kpa plus lives in a subsidised house, all paid for by union members, is he rich ? is that right ?

When people say tax the rich what they really mean is someone else.

When people say tax the rich what they really mean is someone else.

Good point well made. That said, I'm quite happy to be taxed progressively based on my income, easiest option to not c0ck up massively in my opinion.

A lot of people on here would say £45k isnt't rich.

Here is another example, Bob Crowe earns £100kpa plus lives in a subsidised house, all paid for by union members, is he rich ? is that right ?

When people say tax the rich what they really mean is someone else.

any chance of buying me a new bike then?????? please

@Junkyard - that's the first time I've ever been called right wing. I am with Liam Byrne, if we don't fix the social security system we will loose everything we've got. There are 6,000 council houses occupied by families with an income in excess of £100,000. There is sadly a very long list of stuff like this.

True, but at some point wouldn't you want to live by yourself / with your partner? That's why I live in a 3 bedroom house - my wife and I brought it so we could potentially raise a family.

I lived in house shares whilst I was a student / in my twenties but I wouldn't want to go back to it, although I guess in theory I could. Unless you have a partner it may not be a choice anyway

Yeah but you are also then saving money by sharing rent/bills with your wife. Not as much as a house share but it's significant.

When people say tax the rich what they really mean is someone else.

Nope. I'd be happy to pay more tax, especially if it was in return for Scandinavian levels of education, health care, and sense of society.

A lot of people on here would say £45k isnt't rich.

with 45k you can stick a roof over your head you can walk round the supermarket with the ability to stick food in your basket without counting the pennies and you can afford clothing without having to save up.

you might not own your own house or that big fancy house you aspire to BUT you can live comfortably without penny counting if you choose to.

to me thats rich. If you have been at the other end of the scale where your walking round the supermarket counting the value of what your buying and wondering if your cards going to get declined because your almost out of money and its a week till payday then 45k is rich.

if someone was going to give me 45k a year for the rest of my life for nothing you wouldnt see me at work tomorrow put it that way.

house shares, best 5 years of my life bring it on

A lot of people on here would say £45k isnt't rich.

I earn less than that and I think I'm relatively rich
As a sole wage earner, I've managed to help raise a family and send the 3 kids to uni, keep everyone fed,watered and warm and don't struggle to pay the monthly bills.
Maybe it's just me but a lot of my work colleagues that are always skint are the ones that buy sandwiches and coffee at lunchtime for around the same cost of putting a meal on the table for 5

so I'm rich and even better, I feel it.

Interesting perspectives. To me £45k in the UK isn't rich, it's reasonably comfortable not least because of the safety net the NHS provides and the other social service benefits we all enjoy.

When you start using words like rich the media will show pictures of yachts, luxury cars and large houses. You'll not be living like that on £45k.

Junkyard - that's the first time I've ever been called right wing.

I dont think council housing is technically subsidised and i dont se ewhy someoene succesful [ rich if you like] has to seel up and move to a posh part of town rather than saty within his community simply due to wealth. perhaps he should be charged a fair market rate to stay or something similar

A lot of people on here would say £45k isnt't rich.

It isn't. Not by quite some distance.

Rich is the ability to buy clothing and groceries?
[i]Come on.[/i]
Rich is 5 bed with no mortgage, regular new cars, organic free range fair trade, kids privately educated. You will not get that for £45K.
And whats the difference between husband and wife earning £22.5k each and husband earning £45k, wife not working? By this measure, the H&W team are also rich.

Rich is not dying of poverty you are describing wealthy 😉

Rich is 5 bed with no mortgage,

regular new cars,

organic free range fair trade,

kids privately educated.

How old are you jota?

53

I am not sure how you can be poor with a high income tbh

I did carefully say "relatively high"! The sort of thing I was thinking of was people I've worked with in India who earned enough to be some way off the bottom of that scale but were expected to support an extended family of several generations. They were not rich by any measure we'd use it in the west.

I'm guessing that you didn't pay current house prices for your place then? You finish your term? Had any inheritance? You've worked all your life? I take it you've always felt rich?

@Junkyard

Point taken on left/right !

Council Housing is massively subsidised. It may operate at break-even but you couldn't build them based upon the rents paid.

IMO Council housing should be means tested, it should be for the most needy. If you are fortunate to get a well paid job it's time to move on.

How can it make sense that local authorities spend £30k+ pa putting families in B&Bs when they are very comfortably off people living in council properties who are very capable of fending for themselves.

i guess it depends what you value in life and if you follow what the media wants to spoon feed you.

i dont earn 45k and im more than comfortable with my life.... more money is always nice but it would be excess.

"IMO Council housing should be means tested, it should be for the most needy. If you are fortunate to get a well paid job it's time to move on."

agreed !!

to me thats rich. If you have been at the other end of the scale where your walking round the supermarket counting the value of what your buying and wondering if your cards going to get declined because your almost out of money and its a week till payday then 45k is rich.

I'd assume a lot of people who you would call rich have experienced the penny pinching at University...? I know I counted my pennies to the degree i'd be stressed if I spent more than 10 quid a week on food and I wouldn't even call 45k well off.

If you're under 35 and didn't get the benefit of the 90's and 00's house price bubble then you're pretty screwed unless you're earning considerably more than 45k (as a single earner).

There's an awful lot of "in theory" going on in this thread on a topic that is so very often a subjective one. At the heart of some of the discussion is what you consider the meaning of the word "rich" is. And for many that is all wrapped up in how much disposable income you have left after what you consider are your current outgoings. Not all outgoings are "essential" but they are what you have become used to. A large number of people naturally increase their spending in line with their income without necessarily making a conscious decision to.

So, in theory, £45k is a good salary. I would also argue that for most people that is not their definition of rich though. As a single person living in a place that is not excessively expensive I would argue that life could be ok but you would not be "rich" as you would certainly consider owning / buying a home a reasonable investment (that is likely to be cheaper than renting) and may need a car for travel. Are those things essential? Maybe, maybe not. Once you start adding in a spouse, offspring etc then I would say £45k is not that big a salary if you want to own that house, have that car and have a partner that is happy to be a full time parent and not work.

And, as others have commented, why do people think it is right that someone who earns a bigger salary should pay a higher rate of tax? The current tax system is already progressive in that the more you earn the more tax you pay but at a rate that is consistent and fair. And why should someone who earns more pay a higher local / community tax? Do their bins cost more to empty? Does it cost more to educate their kids in the same school as someone who earns less? I agree, it will seem proportionately cheaper for them but that tax is about the local services which, it could argued, are probably used less by the more wealthy thus being less value.

I'm guessing that you didn't pay current house prices for your place then?

You finish your term?

Had any inheritance?

You've worked all your life?

I take it you've always felt rich?

i could pick alot of holes in that generalised statement ewan but im not giving away any more about my personal financial affairs in here.

We paid the going rate, bought what we wanted 22 years ago and stayed in it rather than continually trying to get something 'better'

I actually admire your achievements in raising and providing for a fairly large family so well.

And jota - exactly what do you mean by paying for 3 kids to go through Uni? Given you have suggested you are on a lower income I imagine your kids therefore qualified for near maximum grant. Plus they get a loan for tuition fees. Did they get any other financial support? So what did that leave you to be paying?

[Only asking here as it would be useful to see it in context as the definition of paying for your kids to go through Uni will mean very different things to different people]

If you're under 35 and didn't get the benefit of the 90's and 00's house price bubble then you're pretty screwed unless you're earning considerably more than 45k (as a single earner).

One way to rile up any STWer.

Punch 'em right in the financials.

Given you have suggested you are on a lower income

I'm on more than average

I am over 40[just] and bought my house, less than 2 years ago, on 22k gross

Council housing subsidised ?

WTF --you show your ignorance and prejudice in one line !

FWIW-- a council house will be paid for after 30 years, they are for long term not short, i lived in a CH built in 1933- nearly eighty years old, its tip top, has paid for itself two or three times over, and is still providing a much needed quality home for someone.

There is an ideological hatred of social housing for some, its one of the best ways to regulate and control rents/conditions-- private sector has no interest in providing anything but a quick return.

once upon a time council housing was well built ....

for that reason alone i live in a 1950s ex council property.

You've had a good opportunity to save a deposit though
What % deposit did you pay?

Bikingcatastrophe - Member
And, as others have commented, why do people think it is right that someone who earns a bigger salary should pay a higher rate of tax?

trail_rat - Member
i dont earn 45k and im more than comfortable with my life.... more money is always nice but it would be excess.

@rudeboy. I stand by what I said, it's massively subsidised. Don't look at the build cost in the 1930's look at the replacement cost today including land and you have to do the analysis using commercial rates of return. FWIW I am in favour of council and social housing, I think there should be more of it but it should definitely be more appropriately distributed.

I said on another thread as well even at 100% mortgage - which i cannot get [ can anyone?] it would be cheaper than rent

this.

alot of the time(but not always) buying a house is about realising that if you make sacrifices for a short period to save the deposit then things can be changed. .

if you can afford to rent you can afford to buy. you just need to save the deposit (with the caveat that it may not be what you want but any house owned is better than renting and burning your money)

i lived in a 1 bedroom shoe box spending very little - i even put all bar my singlespeed bikes in storage last year so i wasnt tempted to spend on bike bits. - its amazing what you can save in 2 years when your committed. How ever i do accept this is alot harder with kids in tow and it was a concious agreement between me and mrs T-r to do this now while it was an option rather than doing as we both want to do and take off with the money cycle touring again.

when i look around at folk i know moaning they cant afford a house i see them with iphones , massive tvs , sky sports and out drinking both nights every weekend. one mate admitted he spends 100 quid a night minimum each weekend.

he has a good time and i dont grudge it to him but it all adds up quite quickly to a house IF that is what you want

i could pick alot of holes in that generalised statement ewan but im not giving away any more about my personal financial affairs in here.

Wasn't trying to be specific to anyone, no offense intended! 🙂

How rich you are is your own personal state of mind.

<thread closed>

Is essentially true; yes you can argue about the threshold where essential becomes luxury, but there come a point where you don't need more money, but desire it. I think that it's fundamentally fair that I share the 'excess' income that I have earned at a higher rate than the 'essential' income. That's why.

So, a "communist" or state run system yes? Someone centrally defines what is the acceptable level of income and everything more than that is penalised strongly? Different people have a varying interpretations of what is luxury and what is excess. Still not a reason, I don't think, that means it is fair that higher earners should be taxed at a higher rate. They are already paying a bigger share of the tax income through the higher earnings. Where does the threshold get drawn? What about my choices as to what I think I would like to spend my money on that I may not think of as a luxury? Maybe provide a mechanism where the altruistic can pay more tax if they think their level of income is excessive would be fairer.

jambalaya-- the land 'costs' are the biggest, if the council own the land, what huge costs are you referring to.

Land costs are artificial constructs, designed to make big profits for speculators, they are obscene in many places, you can build a good quality house for £80,000 without land, and in bulk costs drop proportionately-- as i said there are ideological issues with public housing, as along with many things that benefit ordinary people ahead of profiteers/ pirates

So, a "communist" or state run system yes?

Haha, you are Mitt Romney* and I claim my five pounds!

Seriously, really? Socially responsible = commy?

*many other right wing loons are available.

Socially responsible does not equal paying a higher proportion of tax. Not really sure where you manage to draw that narrow conclusion.

And no, I'm not Mitt Romney.

And communist states have a reputation for controlling what is acceptable for the natives including income, so not such a stretch, to make a point.

don't think, that means it is fair that higher earners should be taxed at a higher rate. They are already paying a bigger share of the tax income through the higher earnings.

I fail to understand why anyone wants to justofy this or symapthise with the plight of the rich rather than the plight of the poor

tax the shit out of the self serving folk cos they aint giving it away and even withall this wealth/income many will still be trying their best to avoid tax

I bet the owner of that ^^^ earns at least £45K!

Ok, ok, I'll leave it.

I fail to understand why someone thinks that a question about why it is fair to tax a higher earner a bigger proportion of their income is in any way justifying the plight of the super rich (implication of using a fanciful and fantastically expensive super yacht)?

So what level of income should be deemed "excessive" and should be taxed at a higher rate and what should that rate be? Sensible answers please and not just "politics of envy" answers.

Bikingcatastrophe - I fail to understand

I don't think, that means it is fair that higher earners should be taxed at a higher rate

The country is desperate for more money, the more you have, the more you can afford to chip in.
One of my kids pays board based on what their income is, the other 2 don't

Not fair? Lots of things aren't [superficially] fair, get over it

Sensible answers please and not just "politics of envy" answers.

If you dont agree it is because you accept unequal distribution of income and wealth and those pictures show you what that really means No one wants to justify that so of course you throw some insults about envy around as you know you have no way of justifying that as fair....obvioulsy dont let this inability change your view nad havea pop at me instead.

I fail to understand why someone thinks that a question about why it is fair to tax a higher earner a bigger proportion of their income is in any way justifying the plight of the super rich (implication of using a fanciful and fantastically expensive super yacht)?

Noun: A dangerous, difficult, or otherwise unfortunate situation: "the plight of poor children".

Tell me what is their difficulty exactly not enough time on the earth to spend all their money? 😯

Are these not amongst the high earners you dont want us to tax more of have you changed your view about taxing them now ?

don't think, that means it is fair that higher earners should be taxed at a higher rate. They are already paying a bigger share of the tax income through the higher earnings.

We could get rid of the 40% tax rate, but that would leave a shortfall in tax receipts, and further cuts will only take us so far. Is it fairer to increase the basic tax rate for everyone, or to have an additional tax on disposable income, which in the interests of simplifying things is defined as anything over £45k?

How many really high earners get their money because of their own personal productivity, compared to being in a position to [s]exploit[/s] (emotive) manage the productivity of many others? Not that many I should imagine.

[b]rudebwoy[/b] - Member
jambalaya-- the land 'costs' are the biggest, if the council own the land, what huge costs are you referring to.

Land costs are artificial constructs, designed to make big profits for speculators, they are obscene in many places, you can build a good quality house for £80,000 without land, and in bulk costs drop proportionately-- as i said there are ideological issues with public housing, as along with many things that benefit ordinary people ahead of profiteers/ pirates

How are land prices designed ? Land has "obscene" value because it's in demand, generally because it's near employment ie wealth creation. The better the employment opportunity generally the higher the land & property prices.

Is it fairer to increase the basic tax rate for everyone, or to have an additional tax on disposable income, which in the interests of simplifying things is defined as anything over £45k?

If the tax take needs to go up, it's in everyones benefit (we all benefited from the spend) so it's only fair that we all contribute. Obviously, the rich will contribute more due to how percentages work.

Even fairer still, how about we just close tax loopholes so that people pay what they should? How about HRMC chase Vodephone? How about the ultra rich paying their share rather than hiding it all?

If the tax take needs to go up, it's in everyones benefit (we all benefited from the spend) so it's only fair that we all contribute.

Obviously, the rich will contribute more due to how percentages work

You are George osborne and I demand the right to beat you [ not in the way you like from public schooldays either]

You are not wrong re tax loopholes- then again given how Cameron dad made his money and how CMD got his inhereted wealth that sems unlikely

FWIW his dad was the owner /runner of one of the frist off shore tax avoidance/haven schemes so I doubt dave has a moral problem with them

My first 5 pager \o/

You lot would be brilliant down the pub.

so it's only fair that we all contribute. Obviously, the rich will contribute more due to how percentages work.

For what it's worth, I'd advocate some kind of sine curve for taxation rather than arbitrary steps in income, and have the 'dimensions' of the curve (terminology? Sorry. Not a mathematician) decided by referendum. But I'm only a commie, what would I know.

[img] [/img]

STW pub meet earlier today !

Three hours of arguing over whose round it was and how best to divide the cost of said round, one hour of debating what to drink and then a fight breaks out over what tyres to get to the bar

If i own something and build on it , how is that a subsidy??? lambalaya, land values are inflated due to many things, agricultural land has little value until the magic word planning is added then it is valued at many times more, its still the same land, nobody has made it -- its a construct, like fixing the market so you always win!

You mean they contribute more if we ignore the percentage part of the percentage tax

You are George osborne and I demand the right to beat you [ not in the way you like from public schooldays either]

Don't know what you mean in the first part but I grant you the opportunity for the second 😀 (Even though I've never set foot in a public school and grew up in a council flat).

For what it's worth, (and I'm a higher rate taxpayer by virtue of OT) I don't always agree with JY, but I'd rather live in his 'ideal world' than that of Bikingcatastrophes'.

I don't always agree with JY, but I'd rather live in his 'ideal world' than that of Bikingcatastrophes'.

If you dont agree it is because you accept unequal distribution of income and wealth and those pictures show you what that really means No one wants to justify that so of course you throw some insults about envy around as you know you have no way of justifying that as fair....obvioulsy dont let this inability change your view and have a pop at me instead.

Lots of things aren't [superficially] fair, get over it

And those words are quite true. Life is not fair. And there will probably always be an unequal distribution of wealth. Any my argument is that £45k is not a staggering salary. Yes, there are a lot of people who have material wealth far beyond what they can use and it would be great if they could do something more altruistic than buy the next set of Louis Vuitton baggage for a day trip to Necker. And close down the obvious tax loopholes. But the tax system needs to find the balance of being progressive enough to raise the required funds without appearing too unfair to those that feel most threatened by it and who then try everything they can to move their moneys elsewhere and avoid paying any tax at all.

And slow hand clap to v8ninety for the fail to understand comment. Excellent. Still chuckling at such sparkling wit.

Lots of things aren't [superficially] fair, get over it

yes it would be nice if they would give up Louis stuff and the holiday but a quick look at reality shows they wont so we need to actually take it from them via taxation.