If you are so rich, you don't work, how do you pay taxes to support the economy?

[Palmtreesandsand]

If you are unemployed and have DLA, I get that it's right you don't pay taxes.
If you work, you automatically pay tax.

However, if you don't work because you don't need to because of inheritance or you can retire at 50. How do you pay to support the economy? You still get to use public services? How do you contribute to these?

I would assume if they've retired with enough money before 50 they will have paid inheritance tax or worked their butt off hard enough and paid the appropriate tax whilst doing so .
Either way there are plenty of taxes to still be paid for just general living. car tax , vat , etc etc

There are plenty of people who contribute nothing to the pot so I wouldn't be worrying about the early retirees .

@Octomore the UHNW I have worked for invest in things that attract zero rate IHT like farming (see James Dyson). Also estates with culturally significant architecture/works of art etc… with the agreement that the can be viewed by the public

You do an annual tax return & list all income that you have received.
How much tax you actually pay depends on how inventive your financial advisor & accountant have been...
You still pay council tax, road tax, etc.

Those “regular payments from income”
that can be given away free of inheritance tax are already taxed as “income”
It is in the definition!!!!!

Richer people also contribute to the economy by general spending. They help keep wine sellers, restaurants, cleaners, coffee shops, beauty parlours etc in business when other people need to cut back.

But they're not taxable under IHT, even if you die within 7 years. That's the point of them.

A normal gift would fall within your estate for IHT purposes if you died within 7 years of making it, the fact that the money was also taxed when you received it wouldn't change that.

There is a lot of research demonstrating that less well off people spend far more of their income, therefore £100 in the pocket of a less well off person is far more likely to be spent and go into boosting the economy than £100 in the pocket of a wealthy person.

Yep. BPR, APR - there are lots of ways of avoiding IHT that aren't really possible for an averagely well off person.

Of course. But the rich can spend more in a week than a poor person would in a year.

I retired early but still pay tax on my personal pension and btl income. I have a second pension I can't draw or I would be paying higher rate tax, so it sits there but I will draw it once I sell one of my btl property and so rental income is lower. I also pay VAT, full council tax, car tax, don't claim any benefits at all until I get to 67, then I will be able to claim state pension too. I worked as a Teacher for 32 years before taking early retirement and now am a Foster Carer and get allowance.

Many people in the situation you describe OP are volunteers running third sector organisations that work alongside state funded services (or fill in the gaps). This contribution of time is very valuable

Income tax (including tax on savings, dividends, self employment, rental income) accounts for approx 34% of total revenue. Nic approx 24% and vat approx 17%. Corporation tax is approx 9% and the remainder is made up from capital and green taxes - this includes cgt, iht and stamp duty.

Just because someone doesn't have a job doesn't mean they are not paying income tax.

Off topic a bit, but I think some benefits are taxed as income, too.
www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

Not necessarily. I retired at 52 and never earned more than 30k a year, and substantially less sometimes as I worked for charities.

Not necessarily. I retired at 52 and never earned more than 30k a year, and substantially less sometimes as I worked for charities.

I did say 'probably'. Also there are people who leave work a lot earlier, to be SAHPs or carers, who also aren't necessarily big earners. But i don't think these and your situations are the ones the OP is referring to

It really took research to realise that people who earn less need to spend a greater proportion of their money living?

No it didn't, you're right. But there has still been research into the point at which people are more likely to save, or to invest in things which aren't economically productive (e.g. property) rather than spend.

The aristocracy still own huge amounts of England, I suggest you read Who Owns England.

Also many of us work shy types do voluntary work so are absolutely contributing just not in a financial way

Facetious comments aside, I think part of the problem with the entire world economy is that it is predicated on growth.

Growing the economy and producing more is not a virtue. We need food, water, health, energy and shelter. There are plenty of studies that demonstrate that making one's own creative works and entertainment is more valuable for your wellbeing than consuming it.

You don't need "good tax lawyers". What I mentioned is pretty basic stuff easily obtained from websites like MoneySavingExpert. No specialists needed, just a bit of googling and reading.

You mean because I owned a yacht until last year and spent 8 months of the year sailing the med, and own 4 properties that I'm not the type of person op was talking about? I'm confused.

You don't need a big salary to make money. Some people have sacrificed a lot in their youth to be comfortable in middle age. You just need to be astute, know the markets and to invest and divest at the right time.

You still have to pay tax on income (eg dividends, interest, etc.). Also you pay capital gains tax on gains and so on.

The rich actually pay the vast majority of income tax. The rich are already taxed.

Indeed.
If only they didn't horde company profits all to themselves and shared them more with the workers who actually did the work to earn the money. There would probably be less public money needed to deal with the consequences of poverty, them the rich could pay less tax.