Tax knowledge.

[AVI_8]

First, don't think that at any threshold you start losing money.

There is though and it’s £100k and this just started a few years ago, you start to lose your tax free element by £1k for every £2k earned up to £12k, someone mentioned it earlier it’s roughly equivalent to just over 60% tax, its very stealthy.
Yes it’s good to pay tax, until you start to be punished, putting earnings over this threshold into a pension means they’re losing out on tax revenue in the short term because of their greed.

 

[drjim]

And 45% now starts at 125k as well so you pay

40% up to 100k
60% 100-125
45% 125 onwards

So if you actually do something that is work for the money at those levels, you wonder why you bother. So for instance I am an A&E Consultant, many of my colleagues do not do overtime as it pushes them over 100k and their time is worth more than what is left after tax at 60%. We are trying to cover junior Doctor strikes and they are offering semi decent rates to encourage, but it's still not worth it. An hours work is worth more under 100k than over. That's all wrong!

 

[addjunkie]

And 45% now starts at 125k as well so you pay

40% up to 100k
60% 100-125
45% 125 onwards

So if you actually do something that is work for the money at those levels, you wonder why you bother. So for instance I am an A&E Consultant, many of my colleagues do not do overtime as it pushes them over 100k and their time is worth more than what is left after tax at 60%. We are trying to cover junior Doctor strikes and they are offering semi decent rates to encourage, but it's still not worth it. An hours work is worth more under 100k than over. That's all wrong!

I would agree the steath bit about allowances does seem wrong, more in the way its done, rather than paying tax. It would discourage the guy sitting on 99k Id agree.
It was more honest before the allowances bit. But governments need to get their pennies from some one and the top 2% of earners are an easy target, in that the lower half of these are almost tied here to earn their money, the higher half often have options to go outside the uk. And the other 98% often feel hard done by seeing how the other half live.

The LTA thing is similar, it was brought in as a bit of a stealth tax as some one though 50k pension was adequate, now its used a a tax delay tactic as you dont pay the extra tax till your 75. Or it will be once its brought back which it will be in some form later.

In simple terms there is no one tax system suits all and opinions are like noses we all have one. But these often change as you slide up or down the pay scale.

 

[premmington]

I would agree the steath bit about allowances does seem wrong, more in the way its done, rather than paying tax. It would discourage the guy sitting on 99k Id agree.
It was more honest before the allowances bit. But governments need to get their pennies from some one and the top 2% of earners are an easy target, in that the lower half of these are almost tied here to earn their money, the higher half often have options to go outside the uk. And the other 98% often feel hard done by seeing how the other half live.

The LTA thing is similar, it was brought in as a bit of a stealth tax as some one though 50k pension was adequate, now its used a a tax delay tactic as you dont pay the extra tax till your 75. Or it will be once its brought back which it will be in some form later.

In simple terms there is no one tax system suits all and opinions are like noses we all have one. But these often change as you slide up or down the pay scale.

@addjunkie

Your quote "In simple terms there is no one tax system suits all and opinions are like noses we all have one. But these often change as you slide up or down the pay scale."

I agree with this (you) - taxation is always gonna cause bad feeling to someone/somewhere.

 

[drjim]

Flat rate of whatever percent from £12500 to infinity. No other allowances, exemptions, get outs or special cases. That would be fair.

I am above the thresholds we discuss, because I am a senior Hospital Consultant on top of pay scale (bumped up a few years ago in a hardship posting but I have been in the Consultant job 20 years), work more hours than most Docs (technically 48 per week) and can't cut income because of family/mortgage etc. I do overtime etc because I need cashflow, but I will be retiring in a few years rather than keeping going - purely because I am sick of paying so much tax.

Planning to do building/house refurb post retirement. Maybe back to classic cars for fun!

 

[ukracer]

Flat rate of whatever percent from £12500 to infinity. No other allowances, exemptions, get outs or special cases. That would be fair.

I am above the thresholds we discuss, because I am a senior Hospital Consultant on top of pay scale (bumped up a few years ago in a hardship posting but I have been in the Consultant job 20 years), work more hours than most Docs (technically 48 per week) and can't cut income because of family/mortgage etc. I do overtime etc because I need cashflow, but I will be retiring in a few years rather than keeping going - purely because I am sick of paying so much tax.

Planning to do building/house refurb post retirement. Maybe back to classic cars for fun!

Very interesting....

 

[AVI_8]

Flat rate of whatever percent from £12500 to infinity. No other allowances, exemptions, get outs or special cases. That would be fair.

I am above the thresholds we discuss, because I am a senior Hospital Consultant on top of pay scale (bumped up a few years ago in a hardship posting but I have been in the Consultant job 20 years), work more hours than most Docs (technically 48 per week) and can't cut income because of family/mortgage etc. I do overtime etc because I need cashflow, but I will be retiring in a few years rather than keeping going - purely because I am sick of paying so much tax.

Planning to do building/house refurb post retirement. Maybe back to classic cars for fun!

I agree with everything you said, with a flat rate the more you earn, the more you pay, and we wouldn’t be in a situation whereby doctors are retiring early because the government want to take 60% of their earnings.

 

[addjunkie]

@addjunkie

Your quote "In simple terms there is no one tax system suits all and opinions are like noses we all have one. But these often change as you slide up or down the pay scale."

I agree with this (you) - taxation is always gonna cause bad feeling to someone/somewhere.

I had a similar conversation with my Mrs cousin. Not so long ago he was very left wing politically, rich oay more tax etc. By how his attitudes have changed now hes moved rapidly up the pay scale.

Flat rate of whatever percent from £12500 to infinity. No other allowances, exemptions, get outs or special cases. That would be fair.

I am above the thresholds we discuss, because I am a senior Hospital Consultant on top of pay scale (bumped up a few years ago in a hardship posting but I have been in the Consultant job 20 years), work more hours than most Docs (technically 48 per week) and can't cut income because of family/mortgage etc. I do overtime etc because I need cashflow, but I will be retiring in a few years rather than keeping going - purely because I am sick of paying so much tax.

Planning to do building/house refurb post retirement. Maybe back to classic cars for fun!

That flat rate for all to infinity would work for me, mainly because Id be better off, government wouldnt like it unless the rate for all crept up a bit to balance the books. Having said that when folk have more disposable income and in the flat rate case high earners would, they spend more on luxuries, creating income for others to provide them. Interesting concept. In years gone by I was lucky enough to pay top rate, part of me felt good about it, the other 95% hated it.

 

[drjim]

If you have money you are likely to spend it - Gov gets VAT plus all the taxes from whoever does the work/makes the thing you buy.

Sadly we are not in a position to change the tax system, but at least we can weld.

Apologies to OP for hijack!

 

[addjunkie]

Apologies to OP for hijack!

For the OP been atthe end of the tax year, Id sit them down with all their income and tax paid and see how they compare to an online tax calculator!

 

[ukracer]

For the OP been atthe end of the tax year, Id sit them down with all their income and tax paid and see how they compare to an online tax calculator!

What's an online tax calculator?

 

[AVI_8]

What's an online tax calculator?

If you have an iPhone here’s a link to one, many others are available on the App Store and I’m sure elsewhere online

‎UK Salary Calculator 2023/24

‎OVERVIEW: UK Salary Calculator provides a simple numerical breakdown of your PAYE income, or a comparison of two different salaries. It is intended for use by residents, employers, and job seekers in the United Kingdom. Also available for MacOS. FEATURES: Yearly, monthly, 4-weekly, weekly...

apps.apple.com

 

[Morrisman]

....Earning more means you will pay progressively more tax on the higher amounts but it doesn't mean that you're ever in the position where you have less money the more you earn....

Reminds me of the old lags in the factory 40 years ago: "no point working Saturday morning, son, they just take it all off you in tax".

 

[addjunkie]

What's an online tax calculator?

Estimate your Income Tax for the current year

Estimate how much Income Tax and National Insurance you can expect to pay for the current tax year (6 April 2022 to 5 April 2023)

www.gov.uk

one example but there are several on line if you use google, best finding one that includes NI too, if they are employed.

“uk income tax calculator”

 

[premmington]

Reminds me of the old lags in the factory 40 years ago: "no point working Saturday morning, son, they just take it all off you in tax".

They would moan more now - most factory workers (I think) don't get time and half or double time now - they all on banked hours and annualised hours with overtime premiums built in (substitute built in to lost/evaporated/stolen).

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In the garage trade - there is no premium overtime rates - Sat mornings are sort of swapped for an afternoon off in the week in times gone past. It is all about bonus and getting ahead on your booked work hours in big dealerships/repair centres. This is "race to the bottom" to poor performance - but nobody cares...

 

[skotl]

There is though and it’s £100k and this just started a few years ago, you start to lose your tax free element by £1k for every £2k earned up to £12k, someone mentioned it earlier it’s roughly equivalent to just over 60% tax, its very stealthy.
Yes it’s good to pay tax, until you start to be punished, putting earnings over this threshold into a pension means they’re losing out on tax revenue in the short term because of their greed.

With apologies, this is the misconception I was trying to address.

Earning over 100k (or moving to any higher threshold) does not result in you taking home less money than if you were still in the previous threshold.
An example from one of many online tax calculators - https://www.thesalarycalculator.co.uk/salary.php

Gross income of £ 99,000 = take home of £66,469
Gross income of £100,000 = take home of £67,049
Gross income of £101,000 = take home of £67,429

 

[Morrisman]

They would moan more now - most factory workers (I think) don't get time and half or double time now - they all on banked hours and annualised hours with overtime premiums built in (substitute built in to lost/evaporated/stolen).

----------

In the garage trade - there is no premium overtime rates - Sat mornings are sort of swapped for an afternoon off in the week in times gone past. It is all about bonus and getting ahead on your booked work hours in big dealerships/repair centres. This is "race to the bottom" to poor performance - but nobody cares...

Last time I worked in the U.K. was 1989. That company didn't pay an over time rate of any sort when I first started, but I blaggarded them into paying it after I'd been there a year and had my feet under the table, as it were.

 

[Kj1123]

No it never stops - when you worked hard and got some assets about you - the Capital Gains and Inheritance taxes start.


Edit: There is a saying. "Nothing more certain than death and taxes".

Yes this I true and remember after they tax your income the money have left over they then tax u again with vat on everything u purchase , property tax, rates ect ect gangsters in suits if you ask me.

 

[Morrisman]

Yes this I true and remember after they tax your income the money have left over they then tax u again with vat on everything u purchase , property tax, rates ect ect gangsters in suits if you ask me.

Basically every time money changes hands the government take a piece.

 

[premmington]

Basically every time money changes hands the government take a piece.

I am no economic expert - but yes you are right from what I see @Morrisman - it is the movement of money where the tax is earned.

This the same for "markets" - pension - commodity - gold - shares - bonds...

The big money people earn - out of trade - even if the poor people loose money!

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Movement of money - the value of it has no real worth - the movement is where the gain is - is where it is at...