AIBU to ask a question about Tax paying and what is fair?

[Taxquestions]

Regular but name changed for this thread - Pom Bears, Water Gun, Penguin Date etc.

Although this is not a thread about a thread, I read a thread today which really raised my eyebrows about some people's beliefs on what tax payers should really be paying in tax. I am interested in all views.

One of the contributors seemed to believe that tax payers should be taxed so highly that their eventual income stream would be nearer an average salary i.e if you earn't 100K you should be paying 75% back in tax.

I read things like "well they don't actually pay the higher rate".....errm looking at my P60 I can assure you they (I) do "well they have accountants to lower the rate for them" how exactly would this be? HMRC are scrupulous, there are FSA rules and regulations and there isn't any way to "fudge" the system - if you are not in this system please tell me where on earth you get the opinion that everything is fraudulent.

I wonder what the general opinion is to someone like me...I earn over 100K a year, work bloody hard for it, have very little tax free allowance (in fact I think it is more like 0), don't take up a NHS space as have private medical insurance, don't take up a school space as my children are in private for non snobby reasons despite the opinion that some hold. I employ over 100 people, am a fair manager/employer who pays above the national/international average and I contribute a substantial sum of my very hard earned income every year in both Tax and NI contributions. I don't have a final salary pension scheme and will be in the same position as everyone else who has either worked without a final salary pension or those who have never worked come retirement (subject to any savings).

So mumsnet do you think I should be penalised more for loving my job, being good at it and wanting to work hence being afforded the salary I am "lucky" to earn? Should I go out to work just to put more into the tax pot?

So as not to drip feed whilst I put "lucky" - it has been far from it, I am working class through and through left school early with no qualifications and worked my way up the ladder. This makes no difference to me but just to clarify for those that might also assume I was born with a silver spoon in my mouth :)

YANBU at all. But just to forewarn, plenty of others will accuse you of stealth-boasting!

In that case no-one would bother working longer hours. In our family's case, the NHS would lose a GP and a consultant - why on earth would we both bother working long hard hours, in jobs where we take a huge amount of personal responsibility with every decision and have studied many years and worked many antisocial hours, if we aren't going to be paid for it?

I hear N Korea is nice at this time of year for anyone who wants that sort of system.

I see where you are coming from. I fall into the band that means I have to repay all my child benefit, yet that didn't even pay my child care costs. I pay over £1,500 in tax a month so it really is in the Governments interests for me to work, and yesterday some twit was saying I should pay £10 a month for the NHS. (I already am you idiot it is called National Insurance)

Well £100k isn't all that much.

If you are on PAYE you tend to get shafted.

There are people earning 10x what you do who will pay less tax (total, never mind %) than you do because they aren't on PAYE.

I think the super-rich and many corporations do everything they can to avoid tax, and that some people then put everyone who earns above a certain bracket in that category. My DH earns over 100k, HMRC sets his tax rate, he pays a lot - as he should. I have my own fledgeling business and I certainly don't seek to avoid tax, in fact I'm proud to pay it. (My accountant tells me this attitude is unusual however).

Personally I see no benefit in a tax system that doesn't reward hard work. Now, perhaps DH was lucky to fall into the type of work he did, and yes, I would prefer it if 'the system' rewarded nurses and teachers as well as they did corporate middle managers, but given that it doesn't... Some people do seem to miss the fact that the more people earn, the more they pay.

The HRT threshold is too low IMO, I don't think people should be expected to hand over 40% until they are on at least £70 or 80k.

The people who truly believe that every higher rate tax payer has an accountant to fiddle their taxes for them are small minded, completely inaccurate, and would benefit from looking outside their own narrow experience of life occasionally.

I think everyone should be entitled to the tax free allowance no matter how much they earn.

I think the fact that you choose to use private school and healthcare is irrelevant, you still have the option of those things, and private medical care won't get you very far if you have a heart attack and need an ambulance. Private healthcare doesn't cover everything.

I don't think someone in your position deserves to be penalised, but I do believe we all have a moral obligation to contribute tax if we are lucky enough to be heathy, no matter how much or how little we earn.

I think large corporations should be made to pay the correct amount of tax.
In terms of individuals, I don't know enough about the tax system to make a judgement.

Unless I'm missing something, it's impossible to fudge your tax if you're a high earning employee. It's frustrating when people dredge up that one isn't it!
OP I agree wholeheartedly.

I can't bear it when someone tries to justify how they shouldn't pay tax because they have private healthcare or send their children to private school. Those are your choices not something for other people to be grateful for. Also, if you had an accident and needed emergency treatment you would be using the NHS. As ll as the fact that tax pays for a lot of other things. Your 'contribution' as you call it is not something special - everyone who pays tax is contributing.

Plus, what do you think paid for the education of your private doctors and teachers? That's right - tax. Unless they were all privately educated of course, which seems unlikely. Even with university fees, a medical student costs a lot more than they actually pay in fees.

I don't think that you should be paying 75% of your salary in tax. However your arguments about how grateful we should all be to you, for how generous you are by paying tax and NI like us mere mortals not on a £100k salary who use the NHS and the state school system, are frankly patronising.

I don't understand your OP - are you an employee on PAYE or do you have your own business? If the former, YOU don't employ 100 people, your employer does.

Also, as Onelittlepiglet points out the tax payer subsidises private healthcare (via NHS training, contracts and resources) AND private education (via tax exempt charitable status for schools)

WooWoo - don't get me wrong I have a STRONG moral obligation to the country and do everything in my power and within the rules to "pay it forward". I know I am in a good position so choose to pay the extra to have my family on my private medical insurance as a way to alleviate some things from the NHS and I do it, although in reality I will probably never use it.

I also never evade tax - EVER and I have found no one to date who would even consider this, I am PAYE and only have to complete a tax return because my salary goes over 100K. My job is all about SOX complicancy, ISO compliancy and there is no way on this earth I would try and mis conduct my tax return.

My question is I earn't 100K last year and paid 40K back in tax and NI and some are saying this isn't good enough...Is this a true account of what the "people" believe?

One little piglet - who was trying to justify not paying tax because of paying for private education or private healthcare? Not me....

If you love your job, you'll do it for a reasonable wage, not a ridiculously inflated one. You definitely don't work harder than every single one of the people who are on a quarter or less of your pay- in fact I'd bet many of them work harder than you. They still work even though they get the same wage you would get if you paid more tax. If you don't want to pay tax, get a cleaning job for £6000 a year- problem solved. You aren't doing anything especially altruistic by paying the meager tax rates required by UK law. I could afford to pay more tax and I earn far less (and am probably a lot more qualified as well, before someone drags out the 'worked hard at school/uni' argument).

And Onelittlepiglet - exactly what pays for those professionals - TAX....sigh!

God this is going to be harder than I thought :)

I don't understand your point there? ^

Pony, where did I say my pay was unreasonably inflated? It is not, it is what is paid in the industry I work in.

Where did I say I was paying Meagre taxes? or are you saing 45% tax is meagre and I should be paying more? If that's the case please answer the original question on how much you think I should be paying - 50%, 60%, 70% more? based on what?

I agree that simply being a HRT doesn't make hiring an accountant worthwhile.

OP do you know that the per cent of tax isn't based on your entire salary, just portions of it over certain amounts?

It's as well some people love their jobs, and/or are willing to work very hard, despite not earning a hundred grand. 60% tax sounds fine to me but please don't justify your salary by the amount you work. We all know many people work extremely hard for very small amounts of money - within the UK, but especially if you look further afield.

Sorry misread your figures - you kept 60%, not 60% in tax.

stonehairbrush : I don't think OP has a personal allowance - they were withdrawn above a certain income a Budget or two ago.

Yes Stonehairbrush I do....but I am just generalising here as with everything considered it works out at about 40% of what I earn.

This is not heroic or needing congratulating as Little Pig is trying to turn this into (which in itself is really sad), it is just a general question for all of us who pay tax.

Noticeably no one has offered an opinion whether higher earners should pay more - people are far more interested in doing what women do and being bitchy, competitive and argumentative :)

I'm getting a strong whiff of bullshit about this but:

My question is I earn't 100K last year and paid 40K back in tax and NI and some are saying this isn't good enough...Is this a true account of what the "people" believe?

I don't know - why don't you ask them? This is why you don't start a thread about a thread.

Also if this is the case, you take home £60k of net salary in a country where the median gross wage is £26k.

Tax avoidance and tax evasion are different!
Every single person who has an ISA is avoiding tax...

It is a bit of a strawman to trot out the line 'companies are always evading tax'. Some companies, especially publicly-listed ones, have a legal duty to their shareholders to make returns. If they see a legal tax loophole, they have a duty to use it. Often, the government creates these loopholes deliberately for companies to use.

That isn't the same as illegally evading tax, which is both illegal and immoral. But if a company uses a legal means to reduce their tax bill, that is no more immoral than using your ISA limit.

Yes I understand that. The OP sounds muddled, or maybe I'm misunderstanding... But an idea of 75% tax rate for eg would likely be 75% of income over £150k for example, not all income incl £0-150k