40p Tax band - history
Discussion
An interesting chart which illustrates just how complicated our tax system has become.
http://www.telegraph.co.uk/finance/personalfinance...
http://www.telegraph.co.uk/finance/personalfinance...
Because it is too complicated I use this
http://www.uktaxcalculators.co.uk/
and
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
to "decide" how much I should be taxed.
http://www.uktaxcalculators.co.uk/
and
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
to "decide" how much I should be taxed.
What most people on here seem to be doing is making the absolutely crucial mistake of assuming this is about logic, fairness, numbers,etc - we are talking about politicians ! This has nothing to do with anything other than political rhetoric
Here's the classic example. Labour keep saying that there was a £43,000 tax cut for millionaires under the Tories. It's an incredibly provocative statement. But Labour won't discuss the actual facts in any further detail, because their argument would be ripped to shreds and the Tories won't discuss the facts, because it would be political suicide to look like they were sympathising with 'the rich'. So here are the facts
By millionaires, what Labour actually mean is people with an income of £1 million per year. So not all millionaires. In fact, in very rough terms, we are talking about approximately just 10-12,000 people in the UK
From 2003/4 to the tax year 2009/10, rates were very stable, so someone earning £1 mil per annum paid a total of between £402,000 and £405,000 per year in tax & NI. Equivalent to c. 40% of their income
In 2010/11, as a result of labour's last budget before losing the election, that figure went up to £491,000. So in 1 year, it went from c. 40% to c. 50% of income. It went up a little the next year to £501,000 and stayed there the following year
In 2013/14, it dropped to £459,000 (this is the '£43k tax cut for millionaires') and it has stayed there ever since - within just a few hundred pounds, it hasn't moved - it's about 46% of income
So we are talking about people who are still paying £459,000 per year in tax and suggesting they are getting off lightly. And we are talking about the partial reverse of a policy that labour brought in during their last year of power, that actually only lasted for a month or so of labour power (April 5th 2010 the start of the tax year, until labour were kicked out a month or so later), with million pound incomes still being taxed at a far greater level than under all but 2 months of the last labour regime
By way of comparison, someone earning £25k has seen their total take home pay after tax & NI, without taking into account any 'credits' they may be due, rise steadily by £100-200 per year from £18.5k per annum 10 years ago, to for the first time just over £20k. That equates to total tax take of c. 20% including NI and a progressive rise in income/drop in tax from around 26% 10 years ago
Now I think that's all quite fair but i go back to my opening point - why let facts get in the way of a good story - 'the tories look after millionaires........'
Here's the classic example. Labour keep saying that there was a £43,000 tax cut for millionaires under the Tories. It's an incredibly provocative statement. But Labour won't discuss the actual facts in any further detail, because their argument would be ripped to shreds and the Tories won't discuss the facts, because it would be political suicide to look like they were sympathising with 'the rich'. So here are the facts
By millionaires, what Labour actually mean is people with an income of £1 million per year. So not all millionaires. In fact, in very rough terms, we are talking about approximately just 10-12,000 people in the UK
From 2003/4 to the tax year 2009/10, rates were very stable, so someone earning £1 mil per annum paid a total of between £402,000 and £405,000 per year in tax & NI. Equivalent to c. 40% of their income
In 2010/11, as a result of labour's last budget before losing the election, that figure went up to £491,000. So in 1 year, it went from c. 40% to c. 50% of income. It went up a little the next year to £501,000 and stayed there the following year
In 2013/14, it dropped to £459,000 (this is the '£43k tax cut for millionaires') and it has stayed there ever since - within just a few hundred pounds, it hasn't moved - it's about 46% of income
So we are talking about people who are still paying £459,000 per year in tax and suggesting they are getting off lightly. And we are talking about the partial reverse of a policy that labour brought in during their last year of power, that actually only lasted for a month or so of labour power (April 5th 2010 the start of the tax year, until labour were kicked out a month or so later), with million pound incomes still being taxed at a far greater level than under all but 2 months of the last labour regime
By way of comparison, someone earning £25k has seen their total take home pay after tax & NI, without taking into account any 'credits' they may be due, rise steadily by £100-200 per year from £18.5k per annum 10 years ago, to for the first time just over £20k. That equates to total tax take of c. 20% including NI and a progressive rise in income/drop in tax from around 26% 10 years ago
Now I think that's all quite fair but i go back to my opening point - why let facts get in the way of a good story - 'the tories look after millionaires........'
Edited by jonby on Saturday 18th April 08:24
Edited by jonby on Saturday 18th April 08:31
jonby said:
What most people on here seem to be doing is making the absolutely crucial mistake of assuming this is about logic, fairness, numbers,etc - we are talking about politicians ! This has nothing to do with anything other than political rhetoric
Here's the classic example. Labour keep saying that there was a £43,000 tax cut for millionaires under the Tories. It's an incredibly provocative statement. But Labour won't discuss the actual facts in any further detail, because their argument would be ripped to shreds and the Tories won't discuss the facts, because it would be political suicide to look like they were sympathising with 'the rich'. So here are the facts
By millionaires, what Labour actually mean is people with an income of £1 million per year. So not all millionaires. In fact, in very rough terms, we are talking about approximately just 10-12,000 people in the UK
From 2003/4 to the tax year 2009/10, rates were very stable, so someone earning £1 mil per annum paid a total of between £402,000 and £405,000 per year in tax & NI. Equivalent to c. 40% of their income
In 2010/11, as a result of labour's last budget before losing the election, that figure went up to £491,000. So in 1 year, it went from c. 40% to c. 50% of income. It went up a little the next year to £501,000 and stayed there the following year
In 2013/14, it dropped to £459,000 (this is the '£43k tax cut for millionaires') and it has stayed there ever since - within just a few hundred pounds, it hasn't moved - it's about 46% of income
So we are talking about people who are still paying £459,000 per year in tax and suggesting they are getting off lightly. And we are talking about the partial reverse of a policy that labour brought in during their last year of power, that actually only lasted for less than 2 months of labour power (April 5th 2010 the start of the tax year, until labour were kicked out a couple of months later), with million pound incomes still being taxed at a far greater level than under all but 2 months of the last labour regime
By way of comparison, someone earning £25k has seen their total take home pay after tax & NI, without taking into account any 'credits' they may be due, rise steadily by £100 or per year from £18.5k per annum 10 years ago, to for the first time just over £20k. That equates to total tax take of c. 20% including NI and a progressive rise in income/drop in tax
Now I think that's all quite fair but i go back to my opening point - why let facts get in the way of a good story - 'the tories look after millionaires........'
http://www.uktaxcalculators.co.uk/dividend-vs-salary.php Here's the classic example. Labour keep saying that there was a £43,000 tax cut for millionaires under the Tories. It's an incredibly provocative statement. But Labour won't discuss the actual facts in any further detail, because their argument would be ripped to shreds and the Tories won't discuss the facts, because it would be political suicide to look like they were sympathising with 'the rich'. So here are the facts
By millionaires, what Labour actually mean is people with an income of £1 million per year. So not all millionaires. In fact, in very rough terms, we are talking about approximately just 10-12,000 people in the UK
From 2003/4 to the tax year 2009/10, rates were very stable, so someone earning £1 mil per annum paid a total of between £402,000 and £405,000 per year in tax & NI. Equivalent to c. 40% of their income
In 2010/11, as a result of labour's last budget before losing the election, that figure went up to £491,000. So in 1 year, it went from c. 40% to c. 50% of income. It went up a little the next year to £501,000 and stayed there the following year
In 2013/14, it dropped to £459,000 (this is the '£43k tax cut for millionaires') and it has stayed there ever since - within just a few hundred pounds, it hasn't moved - it's about 46% of income
So we are talking about people who are still paying £459,000 per year in tax and suggesting they are getting off lightly. And we are talking about the partial reverse of a policy that labour brought in during their last year of power, that actually only lasted for less than 2 months of labour power (April 5th 2010 the start of the tax year, until labour were kicked out a couple of months later), with million pound incomes still being taxed at a far greater level than under all but 2 months of the last labour regime
By way of comparison, someone earning £25k has seen their total take home pay after tax & NI, without taking into account any 'credits' they may be due, rise steadily by £100 or per year from £18.5k per annum 10 years ago, to for the first time just over £20k. That equates to total tax take of c. 20% including NI and a progressive rise in income/drop in tax
Now I think that's all quite fair but i go back to my opening point - why let facts get in the way of a good story - 'the tories look after millionaires........'
Assuming that people earning £1M are not employees, but directors, they'd pay £429,792.82 Total Taxation in 2015-2016 vs £435,851.21 Total Taxation in 2014 - 2015 or £447,971.36 Total Taxation in 2013 - 2014
so basically they can afford to employ another member of "staff"
Is this why unemployment has dropped? The rich employing a second pool cleaner ?
Pit Pony said:
http://www.uktaxcalculators.co.uk/dividend-vs-sala...
Assuming that people earning £1M are not employees, but directors, they'd pay £429,792.82 Total Taxation in 2015-2016 vs £435,851.21 Total Taxation in 2014 - 2015 or £447,971.36 Total Taxation in 2013 - 2014
so basically they can afford to employ another member of "staff"
Is this why unemployment has dropped? The rich employing a second pool cleaner ?
Not all people earning £1 mil per annum are shareholders and those that are will earn some money as salary, some as dividends. What is patently true is that we have rules which are far too loose when it comes to small business owners (of which I am one) being able to declare some earnings as salary & some as dividends. What is also true is that the higher the rate of NI, particularly the uncapped employers contribution, which actually adds significantly to the true tax cost for a small business owner, the more the incentive to 'dodge tax'Assuming that people earning £1M are not employees, but directors, they'd pay £429,792.82 Total Taxation in 2015-2016 vs £435,851.21 Total Taxation in 2014 - 2015 or £447,971.36 Total Taxation in 2013 - 2014
so basically they can afford to employ another member of "staff"
Is this why unemployment has dropped? The rich employing a second pool cleaner ?
The fact remains on a like for like basis, million pound annual incomes have seen a far greater proportion of their income being taken in tax than those earning less and the tax cut the labour party accuse the tories of is the partial reverse of a policy that labour brought in under their watch, to actually only be in place under tory rule, effectively to goad the tories - labour knew they wouldn't win the election so brought something in that they knew they could then bash the tories with when it was (half) reversed back to where it was
marcosgt said:
I think that's a reflection on how spoilt you (we) are.
Loads of people would LOVE to earn enough to pay 40% tax... (From the figures I can find online only 29% of taxpayers pay 40% or more - Presumably this doesn't include the super-rich who pay nothing, either).
M.
Well over 90% pay higher rate tax, and over 50% pay additional rate tax. Loads of people would LOVE to earn enough to pay 40% tax... (From the figures I can find online only 29% of taxpayers pay 40% or more - Presumably this doesn't include the super-rich who pay nothing, either).
M.
That's if you're to believe a poll of PH posters.
So the average PH poster appears to not only be a heavily built director, but also a "well paid" one too.
http://www.pistonheads.com/gassing/topic.asp?h=...
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