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When you hit the 40% tax are you being ripped off? Watch

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    (Original post by zainyyyyy)
    honestly if you believe people move money to their pension just to avoid paying x amount then maybe you should go back to school
    Perhaps you ought to complete school before discussing what adults do with their personal finances?
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    British people complaining about 40% tax, how cute. Here in NL it's 52% 😭
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    Just think.. the first 5 months of work you do you dont actually get paid for ... Government takes every penny
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    (Original post by zainyyyyy)
    you make more money if you hit the 40% threshold... so this is not true
    What he is saying is not that the added pension contributions are an inevitable result of earning more. He's saying that a lot of people will choose to put more into their pension if they are just over the 40% income tax threshold, because pension contributions are non-taxable. That means that by opting to put that post-threshold income into their pension they will get to keep 100% of the benefits (albeit wrapped up in their pension scheme), rather than 60% of it (by that 60% landing in their bank account).
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    (Original post by Betelgeuse-)
    Just think.. the first 5 months of work you do you dont actually get paid for ... Government takes every penny
    So? How else should the government fund our public services?

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    (Original post by Bornblue)
    So? How else should the government fund our public services?

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    Im starting to think they shouldnt, people should keep their money and spend it themselves and pay for most of it privately
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    (Original post by zainyyyyy)
    honestly if you believe people move money to their pension just to avoid paying x amount then maybe you should go back to school
    They do do this. I do this. My friends do this. The government makes pension contributions non-taxable precisely to encourage people to do this.*
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    (Original post by Reue)
    Perhaps you ought to complete school before discussing what adults do with their personal finances?
    so people who pay taxes are adults?
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    Meh, I don't plan to live here by that age.
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    (Original post by Betelgeuse-)
    Im starting to think they shouldnt, people should keep their money and spend it themselves and pay for most of it privately
    if people do that then this country will turn into dust. Why would anyone pay for an education when they can go straight to earning money. The poorer people will stay poor whereas the rich people will become more rich and will have a simple monopoly over everyone else
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    (Original post by Betelgeuse-)
    Im starting to think they shouldnt, people should keep their money and spend it themselves and pay for most of it privately
    The counter argument is that most people are dopey slobs who are useless at making money, or make useless financial decisions, and therefore need wealthier people to bail them out of their own mistakes.
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    (Original post by zainyyyyy)
    so people who pay taxes are adults?
    People who pay AVCs to avoid the upper rate tax are over-overwhelmingly adults.
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    (Original post by Reue)
    I don't think you've understood what I was saying.

    The 40% threshold is £43k.

    People who earn above £43k will usually make extra pension contributions to bring their taxable salary below £43k.
    the point the OP and it appears yourself have missed is that you only pay 40% on earnin gs aobve the threshold you still the standard rate between your allowance and the 40% threshold ...
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    (Original post by SirMilkSheikh)
    The counter argument is that most people are dopey slobs who are useless at making money, or make useless financial decisions, and therefore need wealthier people to bail them out of their own mistakes.
    I understand the arguments against, just my belief in the government running everyone's affairs is waning significantly
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    (Original post by Betelgeuse-)
    Just think.. the first 5 months of work you do you dont actually get paid for ... Government takes every penny
    come back when you actually understand how income tax in the UK works ...
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    (Original post by zippyRN)
    the point the OP and it appears yourself have missed is that you only pay 40% on earnin gs aobve the threshold you still the standard rate between your allowance and the 40% threshold ...
    :facepalm:

    I give up!
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    Yes OP, of course you are being ripped off. 40% of your money is taken after you make £43, against your consent. Luckily for you, there are loopholes that means you can greatly reduce the tax you pay, to the extent of nearly nothing. I suggest you seek out these loopholes.
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    (Original post by Compton Menace)
    I would like to earn enough to avoid the 40% tax even if its by a penny as it seems really unreasonable to me that if you earn 100k almost half goes to the government its like working for free half your time so it makes no sense aiming for the big money unless you are making hundreds of thousands per year.


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    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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    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.
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    (Original post by Betelgeuse-)
    Im starting to think they shouldnt, people should keep their money and spend it themselves and pay for most of it privately
    So who pays for the army?
    Who pays for the police?
    Who pays for the judiciary?
    Who pays for the fire service?
    Who pays for our ambulance services?
    Who pays for our roads to be built?
    Who pays for our borders to be guarded?
    Who pays for flood defences?
    Who pays for schools for people who cannot afford private education?
    Who pays for health for people who cannot afford healthcare?


    To name a few. The reality is that if we stopped collecting taxes, the country would fall apart.
 
 
 
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