UK Income Tax discussion

[SuperNova]

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Why should I pay more?

I am already a higher-rate taxpayer and pay tax from 2 jobs. My tax outlay increased again last April meaning a further reduction in net income

I am fed up of ever-increasing tax rises!

Because this country's debt will be at an all time high and services need paying for. I mean, we could go back to 60% top rate of income tax as there was under Thatcher.

 

[Islineclear3_1]

Because this country's debt will be at an all time high and services need paying for. I mean, we could go back to 60% top rate of income tax as there was under Thatcher.

I already am paying 60% with my 2 jobs !!! And I'm classed as a middle income worker

 

[Mcr Warrior]

I mean, we could go back to 60% top rate of income tax as there was under Thatcher.

60% is certainly high but didn't Thatcher reduce the top rate of tax from 83% (applicable under the previous administration) to 60% in the budget immediately after the 1979 election?

 

[Bletchleyite]

I already am paying 60% with my 2 jobs !!! And I'm classed as a middle income worker

Either you don't understand how income tax works, or you need to speak to a tax advisor to get your tax affairs corrected, that or you're earning over £100K total PA (where there is a quirk causing you to pay 60% on a very small part of your income relating to the loss of personal allowance over £100K) in which case you aren't "middle income" at all, you're really quite well-off.

6 figures is not "middle income" in any normal parlance, it's pretty high. I consider myself well paid and I am nowhere near 6 figures.

If you are actually paying 60% of your total income as Income Tax+NI you have got something seriously wrong with your tax affairs and it needs fixing.

For anyone wondering about the "60% quirk" there are some details here:

The 60% Tax Rate Club - Churchgates

Earning a six-figure salary is often something people celebrate, however, not everyone realises that

churchgates.co.uk

 

[MikeWM]

I certainly agree anyone earning over 100k is doing pretty well (97th percentile or thereabouts, I believe).

Equally though I do think the tax system should make sense, and effective marginal rates of 20% then 40% then 60% (!) then 40% again then 45% doesn't really seem to fit the bill...

Slightly back on topic, I voted Labour at the last two elections - so I have no issue with tax rises per se. However I'll strongly object to any tax rises to fund the consequences of the utter debacle of the last 6 months.

 

[Islineclear3_1]

@Bletchleyite I earn nowhere near 6 figures! But I have 2 jobs and pay tax on both. I pay the higher rate on one and the basic rate on the other and HMRC can never get the calculations right! I used to do my own tax return until I hired an accountant

Anyway, we are drifting off-topic

 

[baz962]

Because this country's debt will be at an all time high and services need paying for. I mean, we could go back to 60% top rate of income tax as there was under Thatcher.

It was actually 83% when Mrs T came to power. It was under her that it got cut.

60% is certainly high but didn't Thatcher reduce the top rate of tax from 83% (applicable under the previous administration) to 60% in the budget immediately after the 1979 election?

Yes she did and then to 40%. Also cut the basic rate from 33%to 30%.

 

[Bletchleyite]

@Bletchleyite I earn nowhere near 6 figures! But I have 2 jobs and pay tax on both. I pay the higher rate on one and the basic rate on the other and HMRC can never get the calculations right! I used to do my own tax return until I hired an accountant

If you have one job paying 20% and one job paying 40% that doesn't mean you are paying 60% in total. You don't add the percentages together. To work out the overall percentage you are paying, you would need to do:

((total gross income - total net income) / total gross income) * 100 (edited to fix the formula, it was wrong)

which would give you a number probably somewhere in the 20s or 30s depending on the size of each income.

 

[Islineclear3_1]

Yes I get that (I was just being flippant, although it didn't show in my post).

But as I (and many others) pay huge amounts to HM Treasury, I would not be happy with any more personal tax rises

 

[Westcountryman]

Could someone please tell me how anyone can be paying 60% income tax when the maximum rate is 45%, and that will not be levied on the full salary as there are tax free allowances?

 

[Bletchleyite]

Could someone please tell me how anyone can be paying 60% income tax when the maximum rate is 45%, and that will not be levied on the full salary as there are tax free allowances?

They can't, and the poster who said he was clearly was not.

Have a look at the link I posted above, though, which explains how a slight quirk does result in 60% being paid in total on the part of a (rather high) salary between 100K and 125K.

 

[the sniper]

Yes I get that (I was just being flippant, although it didn't show in my post).

But as I (and many others) pay huge amounts to HM Treasury, I would not be happy with any more personal tax rises

Problem solved... As a 60% tax payer, I can only presume you're so wealth that you haven't given the economy going forward much thought. Unless you're proposing to employ all these young people yourself?

 

[thejuggler]

If you are paying 60% (or 45%) and have an accountant I really hope you are maximising the opportunities for reducing your tax bill.

Regardless if you look at total tax take it has been at 30-40% of GDP for decades. If income tax is low other taxes rise to maintain this figure.

When IT was higher VAT was lower, no insurance tax, no flight tax, no company car tax plus all the other number of changes to tax which occur every year, but are never highlighted.