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

@jbm16 you put it so perfectly. Instead of this knee jerk reaction of ‘I’d love to earn that, it’s so much money’ people need to realise how much is supported by high earners and that there needs to be some incentive to keep earning more.

I didn’t realise the 100k cutoff had been set in 2010 and not revisited. I earned 40k in 2010 and I felt really well off, not so much now even though I earn lot more.

How does the pension element work? So when your salary goes above 100K, do you tell your employer to take out more contribution for your pension? Sorry for dumb questions here.

There's a significant shortage of consultant doctors in the NHS. We need to maximise the willing expertise we already have, not pretend there'll always be someone else suitable and available.

Yes this was a Tory policy, and because we don't have much cash as a country, it has been continued under Labour.
Agree with sorting out taping/cliff edge etc....

They should be, top 10% pay over 60% of all taxes, and no incentive to earn. My husband is in this bracket, every bonus he gets he loses half, he's now in his early fifties and now looking to reduce hours as not worth the amount of hours and travel required for his role.

I've cut my hours to two days from next month so effectively semi retired.
I've not had a pay rise in 25 years as I reached CEO/MD early. I work for SME not the big global brands.

I have no issue paying tax and will be paying a huge amount shortly due to a company sale but I've spent the last two years unwell and unwaged. My long standing husband can't have more than 10% of my unused tax allowance but I wasn't allowed UC as I was married? I've lost my big income but I'm suddenly expected to be a kept women. It's a daft system. Ive paid a lot of tax in my time.
I think everyone should have a tax free element or you will find resentment.

Reeves is looking at salary sacrifice…. You may find soon you have no choice but to go part time if you want to avoid earning over 100k. However if you can do your job part time, why is your employer paying you a full time wage?

I never earned anything like £100k but I think everyone should get the same tax free allowance. If you want to tax people more at the top end then ok but just be open about that in the tax system rather than create this extra layer of complexity and subterfuge about how much higher earners are actually paying in tax.

My husband earns over £100k and I am an NHS nurse. He is very happy to pay high tax- if the services you get are good quality and the tax is well used. At the moment he is paying high tax to get no help with (super expensive) childcare, run down NHS, high crime in nearby areas and poor schools. We are both disillusioned and if I also could work in another country (I only speak English) we would have already moved abroad.

@Destiny123 you don’t need to have salary sacrifice, you just need to make a payment into a pension then claim the additional tax back from HMRC.

I’m making a significant contribution into my pension this year (everything over £100k, probably around 60k) as it will cost me less than 50% of the gross sum once I’ve got full tax relief. Yes, if I didn’t do that I’d have around £29k of extra income but I’m only 9 years from being able to access my pension, so it makes more sense to pay it into pension.

I think the £100k cliff edge should be removed, because it drives behaviour that likely leads to less tax being collected. Every year I have earned over 100k (except one, where we had a planned expense) I have paid the excess into my pension. Even at £160k earnings it makes more sense to pension it if you don’t need it for spending. If the 45% rate started at 100k I would think that’s fairer.

I also think all thresholds/allowances should be index linked (rather than the stealth tax system that successive chancellors have adopted) and we should have an honest debate about how much income tax needs to be raised, and who needs to pay it. Unfortunately our press won’t allow such discussions and our politicians are too frit!

Currently only around 4% of earners earn over £100,000, the average UK wage is about £37,500 and minimum wage only around £25,000.

One day maybe £100,000 won’t be a good wage any more but right now that’s not the case, it may be worth less than it was with inflation but it’s still more than the majority of the population could ever hope to earn right now.

Thanks - what we would really like to do with any extra income is spend it on lifestyle though!

that’s the but I can’t understand - she could be taking in VAT on all this income high earners pile into pensions!

we spend / go out less than you’d think on current salary’s, agree with OP 100k isn’t worth what it was in 2010!

Exactly this.

They're a fucking stupid idea wherever they are in the income spectrum, and if you don't care about this particular one because you happen not to personally sympathise with the people affected, luckily the UK has plenty of others sprinkled about the place. We can't afford any of them.

Sounds ideal to me. If you're earning that sort of money what does it matter if your ambition is stifled and you ease back a little and enjoy life? You've achieved enough already. Meanwhile opportunities are freed up for other people.

@Hiddenmnetter thank you

16 hours is universal. The 30 hours is lost over 100k

Absolutely not the point of this thread I know, but it seems that there may be people in here that will know the answer. The childcare that is impacted at £100k - am I right in thinking that the funded childcare at 3 is universal regardless of income? I’m just asking personally, haven’t got round to looking yet

But the curious thing about this threshold in particular, is that it means the tax rate goes from 40%, to 60%, then back down to 45%.

Which isn’t some intentional clever policy trick. It’s a hangover from the financial crisis when <1% of earners were at this level.

I wasn’t old enough to be interested in this debate in 2009 when it came in, but I’d be intrigued to know as it made little sense then either (and can’t have raised much tax revenue).

This 👆. It’s not an accident. Economists call it “fiscal drag” and it’s why every government that says “we need to raise more tax” are basically lying through their teeth. Every year as inflation devalues currency, wages rise in proportion. This means the governments tax take increases in proportion.

Average uk salary in 2000 was around 19k. Today it’s 37. So nearly double. And the tax brackets have moved once in that time…feckless spendthrift governments are the problem.

Our household income is not near 100k. But i think removing the tax free allowance is wrong and I think the childcare should be universal.

I think it reduces tax intake rather than increases it as people do anything to avoid it as is so unfair.

He can put more into his pension to offset it and keep taxable income under £100k, you won’t see the benefit of that for many years but it’s still a benefit to have a bigger pension.

As mentioned above, you can put the extra income into a SIPP (or additional pension contributions via the employer), which solves the tax and childcare issue.

The problem is, does your DP think the additional work and responsibility of a promotion is worth the extra time and effort (particularly when children are young) for some additional pension contributions....

In the long term, punching through to above £125k and school age children then puts you in a different position. But it's very challenging to think that 5-6 years ahead, and a lot of people answer "no" to my original question.

It's also the 40% tax threshold, 3.5% of people were affected by that in 1991 and now it's 13% people in quite ordinary jobs are losing higher rate tax, all of the thresholds have stagnated for too long

DH works for NHS 0.85 because although his FTE is £75k, his pension (12.5%) student loan, tax and NI basically total 63.5% and then we also lose child benefit. He can’t earn enough on the 5th day to cover nursery as we’ve used up all the tax free childcare.
Now earning £65k, he has a day off, we keep the child benefit, and the NHS pension is 10.7% so we are about £200 a month better off.
For NHS staff the more they earn the more the pension deduction is, if you add that into the calculation and you also have a student loan, over £100k and you are at over 80% of deductions.