Can we talk about £100-120k marginal tax rate
Discussion
Who created this quirk where you pay the highest marginal rate of tax of all?
What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
What should someone earning in this range pay more marginal tax than someone on double the salary.
Why is the starting point not increasing at all since its inception?
Why was £100k selected as the starting point?
Why not instead reverse it entirely and give the income tax free level to all but lower the 45% starting point to balance off the tax lost.
FredClogs said:
Yes, but these £100k+ guys feel they're entitled to the free money others get and not getting it is equivalent to being taxed in their little green eyes.
So who gets to decide on who is or isn't entitled to the allowances? And as the starting point hasn't changed in what 10/11 years clearly the original £100k back in 2005 was too high and the nasty Torys are allowing inflation to erode it's real terms starting point.
amusingduck said:
iphonedyou said:
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.
His idea was literally 100% tax after 100k?Fancy rolling out your utopian zero-tax-below-£100k-100%-tax-after idea again?
We could all laugh together.
...why would any company ever pay over 100k in that scenario
FredClogs said:
amusingduck said:
iphonedyou said:
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.
His idea was literally 100% tax after 100k?Fancy rolling out your utopian zero-tax-below-£100k-100%-tax-after idea again?
We could all laugh together.
...why would any company ever pay over 100k in that scenario
Given the personal investment and debts people have to take on to advance their careers, then reward later in life. Such a policy as this would simply result in a brain drain for the country.
Why bother ?
RYH64E said:
Just to cheer you all up, my net profit for January is on track to break through the £100k mark for the first time ever 
, it's been a good start to the year. The only problem is that I can't take ibig chunks of money out without paying penal rates of tax, so the money accrues in my company bank account until such time as I can sell up and take advantage of entrepeneurs tax relief at 10%, if it's still available when I get to claim it. I'd rather not take the money at all if it means paying huge amounts of tax.
Net profit on your personal business?, it's been a good start to the year. The only problem is that I can't take ibig chunks of money out without paying penal rates of tax, so the money accrues in my company bank account until such time as I can sell up and take advantage of entrepeneurs tax relief at 10%, if it's still available when I get to claim it. I'd rather not take the money at all if it means paying huge amounts of tax.Great result.
FredClogs said:
If you're making £100k pcm then you can afford to pay tax, your "tax" is no more a penal than the guy paying 20% on his average salary.
Congrats on being considerably richer than me though, be a sport and do the right thing.
Your wide of the mark (excl NI)Congrats on being considerably richer than me though, be a sport and do the right thing.
Average salary is £27k that individual will pay £3,280 tax meaning his marginal rate of tax is 12%
£100k situation is paying c£30k in income tax or 30% of his income
Now let's say average salary individual has 4 kids he gets child benefit equal to that salary as such he pays £0 effective tax.
Chap on £100k pays in £30k gets no benefits.
Is that fair?
Or what should be fair?
If it's as per your statement not being more punitive that on average salary then chap on £100k is due a nice tax reduction of £18k down to £12k tax.
FredClogs said:
Welshbeef said:
FredClogs said:
If you're making £100k pcm then you can afford to pay tax, your "tax" is no more a penal than the guy paying 20% on his average salary.
Congrats on being considerably richer than me though, be a sport and do the right thing.
Your wide of the mark (excl NI)Congrats on being considerably richer than me though, be a sport and do the right thing.
Average salary is £27k that individual will pay £3,280 tax meaning his marginal rate of tax is 12%
£100k situation is paying c£30k in income tax or 30% of his income
Now let's say average salary individual has 4 kids he gets child benefit equal to that salary as such he pays £0 effective tax.
Chap on £100k pays in £30k gets no benefits.
Is that fair?
Or what should be fair?
If it's as per your statement not being more punitive that on average salary then chap on £100k is due a nice tax reduction of £18k down to £12k tax.
£ wise as well the £100k chap excl NI takes home page £5,074 the chap on £27k with 4 kids effectively takes home net £2,250
Now I don't know of many PAYE jobs or contractor jobs paying £100k could just walk into it with GCSEs. The other aspect is quantity of roles, lose a £27k job there are a vast number of roles to go for , whereas at £100k upwards the triangle gets thinner & arguably you don't walk fresh into a comp at those levels you build up / unless your brought in for change management over a year or so then you are no longer required.
Admittedly LTIPs and annual incentives which could be 30% to 2x ++ base come into play.
Wasn't mortgage interest allowed to be tax deductible on principle residence until Lawson killed in in 1990?
But let those who paid 15% bleat about the headline figure which was only a few months before returning to 10% fool you.
Mortgage interest tax relief drastically reduced the effective Internet rate.
But let those who paid 15% bleat about the headline figure which was only a few months before returning to 10% fool you.
Mortgage interest tax relief drastically reduced the effective Internet rate.
oyster said:
Why don't you blame the left wing government for setting such rules rather than the participants who are just trying to abide with them?
If RYH64E is running a successful business then he's likely employing a fair few people, meaning some families have breadwinners. Oh AND he's paying £200k in tax. £200k in tax.... feck me if you can't see that as a contribution then you're blind.
I'd wager too that the £200k is just corporation tax so Employers NI net VAT and then whenever he draws the cash dividend tax too. If RYH64E is running a successful business then he's likely employing a fair few people, meaning some families have breadwinners. Oh AND he's paying £200k in tax. £200k in tax.... feck me if you can't see that as a contribution then you're blind.
Oh and then I'd guess he enjoys a good standard of living spending cash therefore paying Vat and adding to other companies profits
Heck is want to be in a position where £200k tax is payable but if I was I'd not want to pay any more and if legally I could reduce that so be it (and if I do reduce it who's to say I don't give the saving direct to charity?
essayer said:
Ah so they already get 15 hours free (570 hrs), but an additional 15 is coming soon, and this is means tested.
Try finding a pre school which offers that many hours in total / means your split over a number of pre schools nightmare. Why not get a nice au pair in the house minuscule wage
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