AIBU to refuse extra hours when most of the pay goes in tax?

I'd put it in my pension, tax free.

Maybe. Depends how much it was extra in cash in my pocket, whether i needed even a bit of extra money, whether I loved my job, whether there was a good opportunity for me to progress in my career and whether I felt the extra hours didn't negatively affect my family life.

Yes I am one of the many people buying holiday etc to keep below the level.

The economy is not “closed”. More regulation and tax and a descending pound simply translates to foreign investors buying up on the cheap and asset stripping what they can. Be that property, companies, private schools, care home bonanza.

And political turmoil translates to hedge fund bonanza. The idealists never ever learn that simple humans are simple, they work on carrot not stick. None of it is complicated.
Except people sitting in ivory towers who fancy themselves chess masters after their Oxford/Cambridge student union days and Mummy and Daddy telling them how clever they are - tend to underestimate simple human behaviour, time and again.

I work a 4 day week because of the 100k personal allowance clawback. I use my pension contributions to stay around 100k.

If i worked it, I would receive around £650 a month more net, and out of that I would spend:
£150 a month on the extra train travel to work
£200 a month on extra childcare (wraparound for two kids an extra day a week)
£250 for a cleaner 3 hours a week to replace the cleaning I do at home working part time

So I'd actually keep 50 quid a month for more stress, less time with my children. Its so not worth it.

The stats only include ‘adjusted net income’ of over £100k I understand - so they massively understate it as a lot of people on those salaries use salary sacrifice for pension, invest in a SIPP and do a tax return, buy holiday etc to bring them under the £100k on a net adjusted basis.

Let alone all the people that actually reduce down to part time, and thus have a real salary of under £100k.

The crazy thing is it would actually be a net positive in terms of increased tax take to remove that 62% rate. As people wouldn’t take those measures

Its crazy t

Cant you just put all the increase into your pension?

You think? You really think so?

If Keir and Rachel thought a wealth tax had a hope of working, why aren’t they doing it? If the economic advisors thought it would work it would silence SO MANY if their detractors. Guess what? All the research shows it would be an unmitigated disaster.

It’s a graduate tax that only the poorer kids pay. My wording was intentional

The poorer kids don't pay anything. Someone on £150K salary will repay about £10K per year. It's still not a tax even if it's deducted as a percentage of income.

It’s a graduate tax that only the poorer kids pay. My wording was intentional

I’d just pay the extra into my pension so i can retire earlier. Unless you have already maxed out your annual allowance (or earn so much that your annual allowance is tapered)

You (or whoever you mean) aren't "the rich" they are talking about.

They're talking millionaires and billionaires exploiting tax loopholes, not earners on PAYE

Probably she has student loan tax to pay as well

Student loan repayments are not a tax but in any case wouldn't be more than around £10K per year on a salary of £150K. PP claimed to pay £85K in tax on an income of £150K which cannot be true.

I have two children in nursery. I lose 30 free hours + tax free childcare for one (value: £15k) and 15 free hours and tax-free childcare for the other (value:£10k). This is a total net cost to me of £25,000.

Over £100k I pay tax at rates from 62% (£100-125k) to 47% (£125k+). Between £100-155k I therefore take home a bit over £24k.

So I need to earn £155k to make up for the lost benefits £100k.

I live in London and this is a hot topic - you either need to be able to blast past it (tiny numbers of people) or salary sacrifice down to £100k. This leaves people feeling disgruntled as having to cap your salary at £100k for several years while living in an expensive place and of course inflation means costs continue to increase.

Crossed post. I was thinking should be more like 60k tax

Probably she has student loan tax to pay as well

I earned approx £150k last year and paid £85k in tax.

This cannot be true. Even without any deductions apart from your personal tax allowance on a salary of £150K you would pay £53,703 income tax & £5,010 National Insurance for a total of just under £59K tax. There is no way you paid £85K in tax unless there were arrears from previous years.

https://www.thesalarycalculator.co.uk/salary.php

@CoverLikelyZebra Thank you so much for articulating what I always think when I read these threads in your first paragraph. Your other ideas are good too. Please can you be in charge?

If I was in charge:

I would emphasise that the reason for these tax structures is to help create a fairer society by making it more economical for a business to employ 2 people working 30 hours a week and earning £60k each rather than getting one person to work 60 hours a week and giving them £120k. More people earning comfortably, and more people with the leisure time to do more than just work and spend time with volunteering, being creative, investing in their own and their family's mental health, and making the lifestyle changes that we all know are better for us but don't have time to implement when we are working every hour we can.

I would introduce a £25k "upskilling" allowance where anyone with an fte salary of £100k or more can raise the threshold for the personal allowance withdrawal to kick in by £5k for each documented 24 days per year (ie half a day per week year-round) spent mentoring and supporting middle-income middle-seniority personnel to be able to take on those £100k+ fte salary-level responsibilities (up to a maximum of £25k), and beyond that do more to incentivise and promote a culture of part-time working to be a default as soon as you reach the 40% higher rate tax band.

In a free market economy, limited resources have their price set by the market as the highest amount that a sufficient number of people can afford to pay. Too many people being paid £100k+ in London leads to a silly situation where it actually becomes impossible to support a reasonable standard of living in London on any less. If we disincentivise earning at that level and have double the number of people earning perfectly decent but lower salaries, costs have to fall.

This is why I closed down my side hustle (not in the UK). I set it up properly, not cash in hand like many of my friends. I just did the calculations for my accountant for last year, and I paid 68% tax/social security. What on earth is the point!? So I just stopped.

No chance at all.

Yeah its the wrong stat. Its like on threads about the impact of marriage, someone brings up IHT and someone else says only 4% of people pay it. The point being that we don't see the people who've done something that avoids them being in that group. Much harder to measure!

@ElizaMulvil Nurses? They start on around £32,000. They can progress to much more if they wish to as there’s a career structure. Bus drivers and train drivers are not low paid either.

I use ISAs for shares but you fundamentally misunderstand economics if you want people to pull out from investing, which is what would happen. It’s our money that provides investment into companies. These shares are also owned by pension funds. Anyone who has a pension is an investor. It is vital we support industry and jobs. If we take all saving and investing incentive away, we get even less growth and less earnings for employees because the economy contracts. We cannot afford the system we have that pays generously to some state workers and incredibly generously to their pensions. Maybe you need to look at all the costs associated with state employment and not look at TA wages when many of these are part time, term time only jobs and cannot be the same as teachers!

Thats not to say there isn't value in working less days though.