When you hit the 40% tax are you being ripped off?
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Original post by Reue
40% bracket starts at £43k. Hardly a huge sum in London and the home counties.. Not all upper rate tax payers are millionaires.
It's really obvious, but thanks for the tip 👍🏼.
Original post by Trapz99
If you earn £44000, then you're only paying the 40% tax on £1000. You'll pay the normal 20% on £43000. So you'll always earn more if your salary is higher.
not sure why there's so many idiots in this thread such as OP who think if you go above a raise above tax bracket you earn less than before...
Original post by metrize
not sure why there's so many idiots in this thread such as OP who think if you go above a raise above tax bracket you earn less than before...
Its a surprisingly common misconception even amongst the working population.
It will certainly alter my behaviour a lot. Eg if on 40k and offered a new job for 50k, I'd probably not bother and obviously would put more into pension.
It's annoying there are such sharp changes in the tax rate. Why can't they just have a formula that increases tax rate as a smooth curve.
It's annoying there are such sharp changes in the tax rate. Why can't they just have a formula that increases tax rate as a smooth curve.
(edited 7 years ago)
Original post by Princepieman
Nah, the true rip off is the 65% marginal tax when you're in the £100-122k range, where you start to lose your tax free allowance.
40% is reasonable, 45% is a bit ridiculous however.
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40% is reasonable, 45% is a bit ridiculous however.
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Tbh if someone's earning that much I'm not exactly going to be sympathetic, they kinda deserve it!
Original post by Sternumator
It will certainly alter my behaviour a lot. Eg if on 40k and offered a new job for 50k, I'd probably not bother and obviously would put more into pension.
Lol you'd still earn more if your earned £50k than if you earned £40k
Original post by youwillsucceed
Tbh if someone's earning that much I'm not exactly going to be sympathetic, they kinda deserve it!
Lol you wouldn't say that if you were earning that much
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Original post by Princepieman
But I don't haha and I'm guessing a lot of people in the UK would really be thinking that people who earn more than £100000 should be taxed the **** out of
But I do understand that a lot of hardworking people fall into this category, like some doctors and lawyers
Original post by youwillsucceed
But I don't haha and I'm guessing a lot of people in the UK would really be thinking that people who earn more than £100000 should be taxed the **** out of
But I do understand that a lot of hardworking people fall into this category, like some doctors and lawyers
But I do understand that a lot of hardworking people fall into this category, like some doctors and lawyers
People don't tend to earn that kind of money from a salary without either working hard or being highly skilled, so it's a bit short-sighted to say these people 'deserve' to have their income taken off them more than other people simply because they earn more. That kind of thinking is based on nothing more than envy.
Although £100k is a good salary, it certainly isn't an obscene salary for someone living in London.
(edited 7 years ago)
Original post by youwillsucceed
Tbh if someone's earning that much I'm not exactly going to be sympathetic, they kinda deserve it!
Deserve it why, exactly?
Original post by youwillsucceed
Tbh if someone's earning that much I'm not exactly going to be sympathetic, they kinda deserve it!
Wait till it happens to you, youwillsucceed.
Original post by youwillsucceed
Lol you'd still earn more if your earned £50k than if you earned £40k
I know that. But out of the extra 10k, 4k is tax then you have national insurance and student loan on that too. You would only keep about half which works out about £100 a week more.
Moving jobs is a risk: will you have to work longer hours? Is it secure? What will your colleagues be like? If you are comfortable, why take the risk for £100 a week? Even though a 25 percent salary increase is large to start with, tax makes a huge difference.
I think it's ridiculous how high the tax is for people earning a high wage. If it was the same percentage of tax for all people then each person would be charged a different amount based on their salary fairly and proportionately. However, you shouldn't stop yourself aiming for 'big money' because you'll probably end up poorer as a result 
x
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Original post by jneill
Plus £5,332 National Insurance, so total deductions are £34,533.
Total take home from £100k is £65,467.
Total take home from £100k is £65,467.
Yep! Not bad. No one on this board is gonna be earning 100K any time soon though lol.
The more relevant question for young people especially in the South East or London isn't how much the government takes in tax, it's how much your landlord will take from you in rent. Given how hard it is to get a house you are likely to spend a long time renting, and it's a fair bet you'll be paying out about 40% of your disposable income in rent, for some people that is more like 60-70%. This is money that you then can't save up for a deposit yourself so keeps you more trapped.
That money isn't going to fund hospitals, schools, the military etc its just going in the pockets of landlords who were fortunate to have been able to purchase houses when they were cheap (or been able to overextend themselves by borrowing when easy credit was available) and can now increase their effective 'tax' on young renters of today by virtue of the fact house prices have become unaffordable for the young.
That money isn't going to fund hospitals, schools, the military etc its just going in the pockets of landlords who were fortunate to have been able to purchase houses when they were cheap (or been able to overextend themselves by borrowing when easy credit was available) and can now increase their effective 'tax' on young renters of today by virtue of the fact house prices have become unaffordable for the young.
Original post by Sternumator
It will certainly alter my behaviour a lot. Eg if on 40k and offered a new job for 50k, I'd probably not bother and obviously would put more into pension.
It's annoying there are such sharp changes in the tax rate. Why can't they just have a formula that increases tax rate as a smooth curve.
It's annoying there are such sharp changes in the tax rate. Why can't they just have a formula that increases tax rate as a smooth curve.
The effect of the tax bands we currently have does generally lead to a broadly smooth increase in effective tax rates. There are a couple of rocky bits where your marginal rate rockets though, such as the £100,000 - £122,000 region where you lose your personal allowance, but that's obviously not a concern for most
Original post by Hedgeman49
The effect of the tax bands we currently have does generally lead to a broadly smooth increase in effective tax rates. There are a couple of rocky bits where your marginal rate rockets though, such as the £100,000 - £122,000 region where you lose your personal allowance, but that's obviously not a concern for most
Not very smooth.
Just make it a nice smooth curve. I know that it would need a relatively complex formula that many people wouldn't understand but not many people understand the current system.
(edited 7 years ago)
Original post by Sternumator
Not very smooth.
Just make it a nice smooth curve. I know that it would need a relatively complex formula that many people wouldn't understand but not many people understand the current system.
Not very smooth.
Just make it a nice smooth curve. I know that it would need a relatively complex formula that many people wouldn't understand but not many people understand the current system.
That's marginal rate i.e. how much you are taxed on every additional pound you earn in that bracket. The effective rate (overall percentage taken) is much smoother
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