To think this epitomises the squeezed middle - HMRC shitiness

But the majority won’t get ‘taken’. If the extra amount you earn takes you into the higher tax bracket, you’ll pay 40% income tax on that amount. You can offset some of that by increasing the amount you pay into your pension - it means that you may not see an immediate benefit in your pay packet but will benefit when you retire.

I know several single mum's who know it is not worth working because their part time salary would stop childcare and benefits but not be more than benefits alone... It's forcing a lot of women out of work for a decade.

On the higher part of the income, yes. That’s still almost half going on taxes, plus the loss of child benefit, personal allowance etc. For example, they have to earn over £4K gross to make up for no child benefit on 2 children.

Agree it's fucking shit op.

Charity worker here and honestly my mate who is a head of dept in a large London comp (so comparable level) earns £12k more than me a year and gets 3x the holiday.

Some benefits are taxable.

https://www.litrg.org.uk/tax-nic/how-tax-collected/tax-state-benefits

Two much paid out in benefits which aren't taxed. That's the problem IMHO. How come you can get £2k a month plus in benefits but no tax. But if you actually earn that amount you are taxed fairly heavily. The system is skewed.

They do only pay 2% NI though.

I doubt it.

@Perfect28 for full time? That’s list not true

My post deduction salary as a teacher is little more than a minimum wage salary.

I am normally the last person to encourage tax avoidance of any kind but in your specific circumstances you could earn much more by tutoring a few hours a week for cash in hand.

That is how PAYE works! Over the year to April 5th the system calculates what will be due and takes more or less in the month so that at year end you should have your personal allowance tax free and unless you are highly paid you will pay 20% on the rest. HMRC sends a calculation to explain this at year end

I'm employed btw so my tax is taken at source

Honestly HMRC are just awful. They've miscalculated my tax for 3 years running. Told me I owed £2500 then said they owed me £3000 which I received then said I owe them £5000. There is no recourse, the people you speak to at HNrC they just don't give a hoot. I'm now paying back the amount at £250 PM. And all I get told it's my responsibility to check my tax every month.

Have you thought about paying into a SIPP OP?

Once I hit the 40% bracket I found it difficult to stomach the amount of tax I was paying. I now aim to pay as much as I can into a SIPP to keep my tax within the 20% tax bracket.

It means that my monthly available spend is less and things are tighter but eases the amount I pay in tax.

As for CHB for single parents v a couple...its infuriating and makes no sense.

I work for our local council, I also get carers allowance. Every November we get a backdated pay rise from April, I earn more than I'm allowed to for claiming carers. I lose a months carers as a result and end up £50-100 worse off than if they hadn't bothered to back date my pay

Just posting to remind anyone that is a higher earner to put side-hustle earnings into a personal pension instead of giving it up.

If your tax rate is 40% or more then every £1 you put into a pension only costs you 60p and your earnings for purposes of HMRC calculating the high income child benefit clawback will be reduced.

Yes I know exactly how you feel and I have no answer. I have more money than I ever thought imaginable as a child in a council house on paper, but financially I have less disposable income than ever. I was going to start doing evening clinics once a week (4-5 hours after working 8-6 in the hospital) but I realized the money earnt will go in tax and child benefit losses and childcare. Can't win. I got £200 back pay in October and my pension increased so I lost £170 to that and am still paying pension arrears from my unpaid mat leave. So fed up.

Nothing to do with "the squeezed middle". Being on tax code and not paying enough taxes can happen to anyone,no matter what job you do.

You have my sympathies, I found out same time last year that my employers had been underpaying at previous job I left mid 2023. HMRC said they would collect it over 15 months starting Jan 2024. £200 a month. Still paying it. Money is tight at the moment and it means there’s little left each month so essentials like dental costs and optician have been put off which means next year I’ll prob have to pay hundreds at the dentist as filling I needed earlier this year is in a dire state.

It’s depressing - I hope it’s easier next year for you. Just a few months to get through. I know it’s difficult.

Exactly this. Higher earners are not receiving anywhere near the income that many people think, when you take account of the fact that they get no personal allowance, no child benefit etc.

You’re forgetting that anyone earning enough to be paying 45% (more including the NIC) gets zero personal allowance. Every single penny of their income is subject to tax, unlike anyone paying lower rates of tax.

Hope you don’t teach maths

It’s super tough for single parents. The CB allowance has risen a bit though, it’s start to pay back at £60k rather than £50, there should be an exception for single parents though, it’s massively unfair that a couple can earn £120k in theory and keep it.

I kind of agree. Had a payrise this year and also working really hard to start a business. Got excited that I might get a big order (all to be finalised in the new year) until I realised that if I take any of it out I will go over £100k and barely see any of it. Is a bit depressing