Can we talk about £100-120k marginal tax rate

[iphonedyou]

woowahwoo said:

at least you know how we feel

[FredClogs]

iphonedyou said:

FredClogs said:

I don't know whether to laugh or cry.

You're doubtless trying to wrap your head around what a marginal tax rate is.

Fancy rolling out your utopian zero-tax-below-£100k-100%-tax-after idea again?

We could all laugh together.

So you'd rather earn £120k and have a 62% marginal tax rate than earn £99k tax free?

You wally.

[sidicks]

FredClogs said:

So you'd rather earn £120k and have a 62% marginal tax rate than earn £99k tax free?

You wally.

How many 'rich' people would hang around to pay a 62% marginal rate?

How much income tax do you think you'd actually raise?!

Edited by sidicks on Thursday 28th January 12:40

[iphonedyou]

FredClogs said:

So you'd rather earn £120k and have a 62% marginal tax rate than earn £99k tax free?

You wally.

Jesus Christ, Matt. Do you literally just respond to a point you make in your head? Any point at all?

[Puggit]

I just changed jobs and went from earning 98k to 108k. Seems nice, until you work out how much more you'll actually earn.

[HarryW]

Throw it into your pension pot and consider it free money when you draw down your 25%, that's the only way I can reconcile it in my head.........

[anonymous-user]

HarryW said:

Throw it into your pension pot and consider it free money when you draw down your 25%, that's the only way I can reconcile it in my head.........

Like the 25% tax free is going to be around much longer

[hantsxlg]

sidicks said:

hantsxlg said:

Sidekick... No they don't!

I think you're getting confused between marginal rate and actual rate!

Someone earning £140k still incurs exactly the same tax on earning between £100k and £120k as someone earning £120k. It's just that earnings beyond that point go back to the 'normal' marginal rate.

hantsxlg said:

Between 100 and 120k you pay40% tax plus lose your personal allowance progressively. This means u pay 62% marginal tax. Once above 120k you are back to 40% until you hit the 45%.

Someone earning over £120k still loses their tax free allowance in exactly the same way and incurs the same tax rate on earnings within that band!

Edited by sidicks on Thursday 28th January 11:19

Sidicks,
The issue is...
Earn £101K. get a £10K payrise or bonus and you will see £3800 in your pocket

Earn £125K, get a £10K payrise or bonus and you will get £6000 in your pocket.

[FredClogs]

iphonedyou said:

FredClogs said:

So you'd rather earn £120k and have a 62% marginal tax rate than earn £99k tax free?

You wally.

Jesus Christ, Matt. Do you literally just respond to a point you make in your head? Any point at all?

That makes no sense. And don't take the lords name in vane, or he'll come for you and he'll be less generous than the 62% on you last pound, he'd take it all and give it all to the poor.

[rovermorris999]

Bandit said:

Like the 25% tax free is going to be around much longer

Probably true although my guess is they'll cap the amount you can take tax-free so only the 'rich' (aka 'the financially prudent') with bigger pension pots suffer.

[sidicks]

hantsxlg said:

Sidicks,
The issue is...
Earn £101K. get a £10K payrise or bonus and you will see £3800 in your pocket

Earn £125K, get a £10K payrise or bonus and you will get £6000 in your pocket.

Yes, I understand that, but the point is that the person on £120k getting a £10k bonus has already incurred a 62% tax charge on their earnings between £100k and £120k I.e. they only received £7,600 from their £20k of earnings between £100k and £120k.

So, in your example for the first £111k of earnings, both parties receive exactly the same amount.

[iphonedyou]

FredClogs said:

That makes no sense. And don't take the lords name in vane, or he'll come for you and he'll be less generous than the 62% on you last pound, he'd take it all and give it all to the poor.

You're right. It makes absolutely no sense.

Like absolutely every one of your nonsensical, chippy and intellectually bankrupt posts.

[JagLover]

Welshbeef said:

Why was this created in the first place? Removing it will be a nightmare.

On political not fiscal grounds.

Introduced by a Labour government and in place for the last month of their 13 years in power (along with the 50p tax rate). Knowing that if the Tories removed such a ruinous policy they would get hysterically denounced for reducing taxes on the "rich" (such taxes having been in place for one month and the previous higher rate tax regime largely having been largely unchanged since 1988)

[oyster]

Puggit said:

I just changed jobs and went from earning 98k to 108k. Seems nice, until you work out how much more you'll actually earn.

You've missed tax credits off your chart.

Extreme example of course but it demonstrates the stupidity of the tax/benefit system we have.

Person A earns £60k and has 6 children:
He/she takes home £810 a week from work and receives a further £1 a week in tax credits - Total £811.

Person B earns £50k and likewise has 6 children:
He/she takes home £699 a week from work, but receives a further £90 in child benefit and £79 in tax credits - Total £868

Marginal tax rate of 129% !!

[Honk]

This really fking annoys me. Just posted my cheque to HMRC. They had better not squander it.

[longblackcoat]

Worst "I just got a pay rise to <smug voice> six figures" thread ever.

[Pints]

Honk said:

This really fking annoys me. Just posted my cheque to HMRC. They had better not squander it.

I'm sure they won't. It'll be used on good stuff like paying our fair share to Brussels.

[wolves_wanderer]

I'll give Bob Geldof and Bono a call, see if they can have a whip round for you Welshy.

[plasticpig]

Puggit said:

I just changed jobs and went from earning 98k to 108k. Seems nice, until you work out how much more you'll actually earn.

That looks like bks to me. Child benefit has fk all to do with tax. You are not paying any more in tax when you are not entitled to child benefit.

[longblackcoat]

DDg said:

Is it like this?...

You're paying 40% on your earnings between £100 and £120k but at the end of the year the taxman sticks his hand out and says "Remember that first tax free £10,600 you earned? Well you can give it back to me at a rate of £1 for every £2 you earned above £100k gross until we have it all back off you (i.e. once you get to about £120k)"."