The loss of an individuals personal allowance (for earners over £100,000) should increase each year with inflation.

The withdrawal of the personal allowance should be scrapped entirely, along with the withdrawal of child benefit and childcare funding. These cliff edges in the tax system have all been shown to lower UK productivity, lower growth, reduce economic participation, lower overall tax revenues and also increase skills shortages and therefore increase the need for immigration.

I know a lot of his friends are not that interested in money. I was a council house kid, the DS will inherit. My career paid for his lifestyle although he worked from 14.

He makes good money at 26 but he'll find away of increasing his earnings I'm sure.

What do you mean? Someone on £200k pays more tax than someone on £125k.

It traps women who are low earners but have partners earning over £100k.

The cliff edge means that it's cheaper for women to stay at home than to return to work once they have children. It leaves them vulnerable for a variety of reasons, but because they have partners who are high earners they aren't deemed vulnerable by society.

This is the middle class paradox where emotional and financial abuse is somehow invisible and somehow doesn't exist - except of course it does. And you get people in other situations not taking the problem as seriously as they should because of this gap in understanding and thinking these women should be grateful or aren't legitimately being abused.

The reality for some is that should they wish to end a relationship they are screwed because of this. Whilst they live in an expensive house, that house might be mortgaged up to the hilt so there's minimal assets in the property to be split on divorce. It's worse still if their partner is self employed (this isn't unusual for contractors to be in this band)

It also means a woman may be out of work for several years and find it much harder to get a job and be able to support herself. And feel that she will be unable to leave with children as she can't provide for them.

Whilst she could go to a women's charity there is a issue with the perception about being well off which means women in this situation feel they don't think they will be taken seriously or be viewed as 'in need' - especially if the abuse isn't physical. It's a legitimacy issue and a sense that others are in greater need.

So yes we should consider the implications of this and arguably tax more but give free childcare for all so that you don't have anyone falling in between gaps of taxation and therefore left vulnerable.

But yeah... No one wants to acknowledge abuse in middle classes...

The UK raises less revenues than most western European economies which is largely due to the UK raising less from social security contributions (NICs in the UK). In 2023, social security contributions in each of France, Germany, Italy, Spain and the Netherlands exceeded 12% of GDP. In the UK, NICs was equivalent to less than 7% of GDP.

This right here is why we are struggling to afford our pension and benefit spending. Not enough going in.

Earning a little over 100k is a big salary of course, but it bugs me that people don't realise that it doesn't go that far! Take home is about £5k a month after tax and pension. Childcare for us is £2.5k (paying in full with no discount or child benefit) and mortgage is £2.5k. So my whole salary is mortgage and childcare. Luckily my husband earns well too.

Obviously this is very privileged, we have a lovely house etc. Not a day goes by when I'm not grateful. But we're clearly not rich, no possibility of private school etc, and we work long, stressful hours. I think often of working for less money and stress, taking us below thresholds.

While I understand why he turned it down, he should also look at where that role would have led? Would it have opened doors to much bigger salaries in the future?

My husband was earning £125-£140k for a good while before cracking into the £250-£300k plus bracket.

Losing the fiscal lock and using that cash to address fiscal drag would be much fairer. And cutting national insurance but raising income tax by 2p. Working people with kids need to be less dragged down by excessive taxation.

The thing is,if you fall into the 60% tax bracket, but are a young high flyer, you probably don’t want to go part time as you hope you will soon earn more. But if you are pretty much stuck at that level I would try and drop a day. There again, future governments may make it more attractive and you may struggle to get promoted.
Me, I make more on the stock market, than my salary. But no doubt capital gains allowance will be cut.i I stay in my job for security and it keeps me young. I will also have a guaranteed pension.

We have had five NHS consultant posts vacant at our local hospital for the last six months. Salary £140k.
These medics have huge student debt and have worked very long hours.

I did 6am -10pm throughout my career.
My DS recently got headhunted for a £120k job, he turned it down. Wasn't worth the ridiculous hours for not much more salary. I let him do the maths as he's an economist. He saw what I had to do and he doesn't want it. Lots of gen Z don't. That will effect our tax receipts.

I agree and I’m in this category. I’ve thought for years that 1-3% extra on income tax would make a relatively small difference in pay packets but cumulatively would raise a lot. However, they should have done it decades ago - instead of austerity policies we should have been taking some of the hit in income taxes - and then we probably wouldn’t be in such a mess with schools/hospitals/infrastructure seeing so much waste through underinvestment (e.g. scrapping Sure Start saved little but has probably cost the school system and healthcare billions over the years as a result of children and parents not being supported early). Not to mention the money we’d save on interest on what we’ve had to borrow. I would love to see an in depth study into the cost of austerity in economic and societal terms (I know it would have to involve a fair bit of conjecture!) vs. a 5% rise in income taxes. If you look at many other European countries, they’ve been hit by the various cost of living challenges, but they don’t seem to have had the same level of impact because they pay more tax (though Brexit also didn’t help).

Nerd alert ⚠😉

I wondered why there are always a high number of people on threads like this saying they are affected, when others say statistically it’s a small number. I thought it might just be confirmation bias, but then looked at the numbers.

It’s often touted as “only 4% of people are affected” but that’s misleading. In reality, that 4% is a snapshot in time.

If you shift that to a lifetime incidence (because pay generally rises with experience) then 10-12% will earn above £100k at some point in their career.

If you then extrapolate for households affected by the cliff, rather than just individuals, because most couples pool finances and what affects one affects the other, then roughly 20% of households would be affected by the cliff (19-23%)

Given the correlation that most high earners reach that point in their 40s, we start to see why there are so many Mumsnet users who are actively raising kids and are affected by this issue.

[Even if you allow for associative mating -the fact that people tend to pair up with others like them (2 high earners together because they met in the same uni course) - the percentage of households affected only drops to 16% at its lowest (16-25%)]

You're mis-reading.

It's part of the larger question of fiscal drag. The 40% tax band hasn't moved with inflation either. It's a huge drag on productivity and growth but to restore it in line with inflation would cost billions.

Nobody is saying that they shouldn't pay more. It is a question of how much more, for ever decreasing returns, is reasonable. And at what point upping tax and means testing becomes counterproductive.

Thank you for this post. I was desperately trying to figure out where this conversation had even come from!

But also, just a juicy reform carrot to entice people into something that isn't fiscally sound to win votes and also create more division.

People really don't have much empathy for the high earners and biggest tax payers in our society after all.

Of course it does. What do you think people do when faced with effective marginal tax rates of 100%? Would you work extra for no reward?

No, it doesn’t.

why is it unfair that the richest in society pay more?

The top 10% of income earners pay 60% of all income tax receipts. The top 1% pay 29% of all income tax.
Proportionate? No

Your maths is off. The group of "top 10%" comprises far more people that the "top 1%". The reason the top 10% adds an extra 31% of the tax take beyond the top 1%, is there's far, far more people in that bracket.

.

The biggest issue with it is there's no method of really understanding how the jumps in our pensions occur so its hard to predict or avoid... so basically everyone stops as too scared just in case (particularly when nearer retirement as said consultants are in 2 different pension schemes which makes it more complicated still)

The biggest jump is when you finish training as as a trainee you are only pensioned on your basic 40H/week salary (not the out of hours nights/weekend bit, which is about 50% of our take home)...but consultants pay 12.5% pension on their entire salary so their pensionable amount goes up massively that year so you get big bills.

Tbh I don't really understand it as have too much stress to deal with re finishing training and it wont affect me for a couple of years yet

This is a Dr that tries his best trying to explain it to us

In Sweden everyone pays 32% until they reach a certain amount and then it's 20% extra

Well, I think the personal allowance should be raised to £24k for everyone and everyone with income over that should pay flat-rate tax @20% like the Swiss model. Increasing the personal allowance should also cut a significant amount of spending on benefits.

Alas no
Raising the pa to 24k would result in a massive reduction in tax take, which we can't afford without huge cuts in public services
A flat tax at 20% would also result in huge reduction in tax take, which we can't afford (as above)
Increasing the PA cutting spending on benefits: no. A huge chunk of who currently receives UC are low earners and part time workers including non working/low hours working pip receipients, who pay little to no tax already and would still be eligible for all the same benefits

The country would be bankrupt in days!!

This is exactly that's unfair. This can, and does stop people from bothering to work harder to earn more.

That’s very true.

Someone earning 50k pays just 7.5k income tax whereas someone earning 125k pays 42.5k.

A 150% increase in pay results in paying nearly 6 times more income tax.

When compared to most other countries we tax lower earners a lot less than they do and higher earners a lot more than they do. Unfortunately much of the political rhetoric suggests the opposite is true making sensible change almost impossible.