To think that frozen tax brackets are counterproductive in growing the economy?

It's a two way street. Lots of people "want" to be self employed due to perceived tax benefits, potential benefit fraud due to unreported earnings, and of course, those who aren't actually legally eligible to work.

housing costs have a big impact too

Isnt that the companies doing though? Many companies " employ" people but make them actually work as self employed. It's to take away their employment rights etc

This is because there is much larger wage disparity in the UK between higher and lower earners. In Nordic countries, there is less inequality because the pay scale is compressed and the difference between higher and lower earners is much smaller. In the UK, we can’t charge lower earners more tax because they already can’t afford to live.

We either need to significantly increase the wages of lower earners, or, significantly reduce welfare benefits. The way things are at the moment, we have disincentivised people to work.

a huge issue is people want excellent public services but not the taxes that come with it. Compared to many other countries lower & middle earners here pay less tax. The higher earners are in line.

And all the jobs and experience that go with them.

It may be a lovely warm feeling to think you work in the public sector doing worthwhile work saving beetle populations, but someone has to earn money to fund it.

Inevitably any thread about tax and economy is deeply political, but I cannot forgive the lack of thought that this Government brought into their landslide victory. It was always going to happen after the shambles, even though Rishi Sunak did a valiant stint. Where was the plan?

Rachel Reeves has crucified the risk-taking parts of the economy. The clever mechanic who might have set up on his own? The just qualified plumber who likes posh bathrooms and has saved just about enough for three months of cash flow. The chap who has put his savings on the line and taken a loan to buy a garden centre nursery from his employer who wanted to retire, who has seen his March sales drop 50% from 2025. I know all three of these examples personally, and right now, they are all facing being wiped out.

Same with people spending their money on imported goods where the money ends up leaving the UK, thus worsening the awful balance of trade deficit.

Fake self employment, i.e. an employee in reality but pretending to be self employed! It's been a problem for 30 years but HMRC/Treasury can't get to grips with it.

Let's get people working. Let's get the economy growing. I'm still waiting to see what Labour are doing to help this

We haven’t had growth since the crash, not sure anyone can achieve it now.

@Caterina99 Agree. I’m probably one of those, or was. Recently shifted gears to non-profit work and occasional consultancy because the numbers don’t make sense to do otherwise. I’m enjoying my new life and love having time with the children, but the treasury is down a few £100k/yr.

I’m also sad how many non-British friends have moved or made plans to, becuase of the non-dom changes.

These people happily pay/paid serious PAYE, and cost very little in services, but (unlike me) have no ‘patriotic’ reason to stay to have their non-UK businesses and investments taxed as if they were UK ones. They were geese that laid golden eggs. We should be trying to attract as many as we can, for our own self-interest, not chasing them away.

We need fewer people taking out more than they're putting in. We need fewer people living of benefits. We need more people working

Except we have an ageing population so taxes can only increase.

Literally everything Rachel has done has been counterproductive to growing the economy.

The tories introduced this but no one seemed to notice it years ago.

It’s also wage stagnation in general & housing costs which take up so much of the income after tax.

Don't hold you breath with this Government - all they have done is increase benefits

My mind is almost blown when I hear labour ministers incl rachel reeves talking about "getting money into people's pockets so they can spend " whilst simultaneously thrashing the business that needs that spending in many ways...forced min wage increase / ni increases / duty on x y z and freezing thresholds and pushing the others like you op into the upper bracket. And stopping youngsters from getting the jobs.
It doesn't make any sense whatsoever.
Now they have the gall to waste 3 grand for business who recruits youngsters ??

Utter madness.

Depends what they are spending on. Someone going abroad and spending their money in another country doesn’t necessarily benefit the UK.

I agree that tax brackets are too high, but I don’t think that you taking a second job would be necessarily be productive for the economy. At the moment, there is a job shortage, so you would potentially be taking a job from someone who doesn’t already have one.

I didn't say it is a sensible tax system. I said it should have risen with inflation. 40% is a very high tax rate to apply to people only around twice minimum wage in a full time role. I also don't believe in the cliff edges such as the 100k earnings and £1 over the weekly amount for carers allowance. They should be tapered, like child benefit is.

I am merely pointing out that we all have expensive years for various reasons, so that might mean you can't afford a holiday when you usually can.

At the other end of the scale too, the country needs the entrepreneurs, business owners and high earners as they are the ones that actually pay the most tax, spend money and create jobs. If those people feel it’s not worthwhile working longer hours, expanding or even continuing their business then the knock on consequences can be big.

Firms look to be cutting back at the moment, and that can’t be good for economic growth. Fewer jobs available, more benefits needed. No proper incentives on the smaller scale to earn more than £100k or turnover more than the VAT threshold and presumably that translates to the way way higher earners too

We need more people paying in.

Most people are already being squeezed.

The burden is smaller for everyone if it's spread around.
Let's get people working. Let's get the economy growing. I'm still waiting to see what Labour are doing to help this.

Where does funding public services fit into your equation?

Austerity, Brexit, COVID, the Ukraine and now Iran wars are also major factors in our economic situation.

As for your example of the second job - most people in minimum wage jobs are not going to be paying higher rate tax on their earnings and will be working the role full time so commuting costs won't have such a disproportionate effect as the rather misleading figures you have cited.

I think freezing tax thresholds for so long is totally wrong. For those of us on a low income it hits disproportionately. The freeze has meant an increase of around 25% tax for those who struggle to pay basic bills and would not dream of a long haul holiday. Governments used to increase the percentage rate of tax, which is much fairer.

Ah ok. Yeah those are a PITA