To think this epitomises the squeezed middle - HMRC shitiness

Got it.

Well you’ll be pleased to know it’s not quite as kind as that.

Between £100k - £125k they lose their personal allowance, which gives an effective tax rate of 60%.

In addition, all tax free savings allowances (outside of ISA) are lost, all childcare support & tax breaks are removed. It’s hard to really articulate those pieces as a %, but just to add that whilst it goes to 45% at £125k, it’s not really just +5%.

As a guide, the highest earners drop half their salary in tax.

I’m not asking you to show sympathy to that group, don’t get me wrong, but just to say they do pay a heck of a lot of tax and it’s not as simple as +5% (hence many have to also outlay for tax advisors).

I do think the current tax system is broken, outdated and needlessly complex.

I’m in a similar situation (UPS3) but work 0.8.

Gives me tiny bit of breathing room and means I can mark summer and November without hitting any thresholds.

Politicians have fiddled with various bits of the tax system and made a right mess of it, so there are various incomes now where the marginal rate of tax is very high. You're in one of them - where child benefit is withdrawn - but people earning less than you have an even higher marginal rate with the universal credit withdrawal, and people lucky enough to be earning more than 100K are hit by the withdrawal of the personal allowance.

The whole thing is a shambles and it discourages people from taking on extra work. Sadly the new government haven't done anything about this, and their fiddles with Employer NI thresholds suggest that they will make it worse if they think it will raise a bit of extra tax income, just like the previous Tory governments, or the Labour government before that.

It's so incredibly depressing that people have been complaining about this issue for years and years and it only gets worse.

This graph shows the marginal tax rate, including income tax, national insurance, student loan repayments and child benefit withdrawal. It doesn't include universal credit withdrawal, so the marginal tax rates are a lot higher at the lower income range than shown (I think they get to over 80%).

It's a diabolical mess.

Twice I’ve been told I owe money. Twice I have no idea why and no one could tell me, other than I had to pay. Once it was £1800 and once £400. I could understand if I’d been self employed with a variable income, but I had no additional income, nothing had changed.

I think what you’re experiencing is how discriminatory the tax system, including the child benefit repayment (yes it’s a higher limit now, but still works in the same way) is against sole parent families.

Id imagine that your salary would be considered a high salary as part of a two parent family, even if there was only one person working and the other was a SAHP (and therefore no childcare costs, taking time off work for appointments ect). However when you are both the sole financial provider and the full time parent, then for example a £50k salary is not that different to a two parent family where both are working full time in minimum wage.

What's the point in that? Unless I can double my salary (never going to happen) there's no point in having further pay rises/doing exam marking as the majority of what I get will be taken. How is that fair?

Is it being taken because you owe tax, if so it won’t be like that once you’ve paid what’s outstanding. I do balk at paying 40% on my self employed earnings but I just make sure I charge appropriately for any consultancy work I do. I’m in Scotland so much higher taxes but it’s still worth my while to do extra bits.

Check with HMRC...they are a complete shambles. I am being chased for a partnership return for 22/23 as is my wife (and business partner) they have not responded to anything I have sent. Suddenly last month I am being chased for a partnership return for 21/22 but not my wife.
For 21/22 last year they appointed debt collectors and then called them off.

My accountant...yes I use an accountant so these things don't happen can't get a response from them..but tells me that they didn't request partnership returns for those years as ours is a micro business which we are slowly winding down.

In regards to 21/22 he submitted all of his tax returns in time, only for over 40 clients to be chased by the hmrc!

Currently they are asking for over £2k in fines from us for something we didn't need to do

Well you’re ignoring the effect of reducing NICs above the upper earnings limit. You’re also ignoring the effective 60% tax band over £100k.

Your biggest problem is the ex that work contribute. If he doesn’t have much income you’re wasting your time with the CMS. Does he see them?

If you only earned 600 odd from exam marking AND this was self employed income rather than PAYE, and it was your only source of SE income, you don’t have to pay tax or NI on it: you get £1,000 allowance each year. Obviously check with HMRC but that’s always been my understanding.

Who is paying 5%?
Nobody on PAYE, that’s for sure.

But honestly this does illustrate why high taxes are bad for the economy. If the government is going to take most of it (and this really is the case if you hover around 50k or 100k and have kids) there is literally no point in taking on anything extra. You had might as well relax instead.

And we are short of suitable examiners too....

It's only going to get worse

My teacher husband did exam marking once many years ago. Took hours on the phone to HMRC to get them to understand it was a one off and they shouldn't take his one month higher pay and assume he's going to earn that every month for the next tax year.

There have always been tax cliff edges which put you in a higher tax band, and/or result in the loss of some benefits or partially or fully remove your personal tax allowance. Some people avoid this by making additional pension contributions.

It sounds as though they have taken the additional tax owed in one lump sum. When I owed additional tax, I was able to either pay the full amount immediately or pay it off monthly through my tax code.

You can ask HMRC to park the additional tax you owe, they will put you on an emergency tax code and will just work out your tax on a month by month basis for the remainder of the tax year. You will then need to do a tax return to arrange to make the shortfall payment.

I’m probably not explaining it well but it can be done, we’ve done it before because of a bonus. It gives you a while to save the shortfall at least.

It sounds like the exam marking pay might have pushed you into higher salary bracket. I can't see how you have underpaid otherwise as surely you have a fixed salary & employer sorts out tax code & NI contributions etc.

No help now but it's probably not worth doing the exam marking. It’s depressing for you.

OP, someone’s got to pay for the enormous welfare bill and the millions not in work. And the bumper pay rises to train drivers and other union interests. And the rampant government corruption which has been going on for year but is unfathomable bad since the last 4 years.

If a mistake has been made, and your employers haven't given the correct information? That's good if you can check online but the option to phone exists so it's fine if people prefer to use it.

HMRC have done nothing wrong. You have had extra income so you owe more tax.

This can all be done online.