to think that the threshold for higher of income tax is far too low

[ReallyTired]

www.dailymail.co.uk/news/article-2721477/Surge-police-teachers-dragged-40p-tax-band-More-1-6million-employed-pay-higher-rate-decade-ago.html

Higher rates are starting to hit people in ordinary jobs. In 2003 there were no nurses paying the higher rate of tax and now there are 72,000 nurses in the higher tax band. Middle to high earners are the work horses of the UK economy and high taxes act as a disincentive to working harder or taking on more responsiblity. We need these people generate income to pay for benefits.

I feel that cutting of child benefit also harms the ecomony.

YANBU. It's shit and it's what leads to people feeling resentful.

Higher rates of tax should be reserved for the genuinely wealthy.

It must be really lovely to earning enough to have to worry about this ...

Bluetonic123
If the government continues their policy of not raising the higher rate threshold then in twenty years time one in three workers will be a higher tax payer. Middle to high income people generate the wealth that helps those on lower incomes.

High taxation acts a disincetive to hard work and people look for ways of legally avoiding tax. I believe that not putting up the higher rate and cutting of child benefit to those who earn over 50K is reducing tax revenue. For example my husband is just under the threshold for losing child benefit and has to do self assessment. The accountant has given us lots of legal advice on how to reduce our tax burden and stay under the threashold for losing child benefit. (Ie. increasing pension contributions, advice on allowances that we can claim.)

DH has lost his personal tax allowance and we have lost our child benefit. I know I am lucky compared to many but still want to have a moan about it.

YANBU. And the child benefit mess is just as bad.

YABU, and here's why:

To pay the 40p income tax rate you have to be earning £41,452.

A single person with no children earning £41,452 (£31,142 after tax and NI) has an income higher than 90% of the UK population.

A single person with two children earning £41,452 (£31,142 after tax and NI) has an income higher than higher than 70% of the UK population.

A married couple with one earning £41,452 (£31,142 after tax and NI) and the other the UK median wage of £26,500 (£20,975 after tax and NI) have an income higher than 86% of the UK population.

A married couple with one earning £41,452 (£31,142 after tax and NI) and the other the median wage of a UK shop worker of £11,174 (£10,553 after tax and NI) have an income higher than 71% of the UK population.

Whichever way you look at it, those earning above £41,452 per annum fall into the richest third of society and it's only fair that they pay their way.

(I used The Guardian's income comparison tool and MSE's Income Tax Calculator to calculate these figures).

It doesn't discourage work - you're still better off £1 over the higher tax threshold than £1 under it.

The child benefit thing pisses me off but that's just my selfishness. I'm in basically the worse possible position for that - just scraping over the line on my income and no other household income. So your household income could be £50k higher than mine and you could still claim it but I can't.

The problem is that someone on £34k does sound super-wealthy to someone on £11k.

splendide I don't think you are selfish; it would piss me right off too! It's so blatantly unfair it boils my piss! (to use a MN expression), and I am long past claimimg child allowance.

I thought the higher rate tax bracket was from 31,866 which while a nice wage, isn't a huge one. Depending on where you live, it doesn't go very far.

It's the squeezed middle. You don't get any kind of tax credits but you're certainly not living the lifestyle of someone earning 150k, where the top end of the tax bracket is.

YANBU.

YANBU
It's losing CB that makes me furious.

I'm a SAHM, it was the only thing I got to show that society vaguely values you doing your best to bring up the next generation.

I think what grates people is that tax for people over £150,000!have had a large tax cut from 50p to 45p.

ChickenFajitaAndNachos

Has your Dh considered increasing his pension contributions to stay under the limit? I assume that your husband has a good accountant.

Losing your personal tax allowance at 100K is stupid. I say this as someone whose family is not affected. The type of person who earns that kind of money is likely to be gifted and could easily get a job abroad. The type of person who earns 100K probably spends at least 50K on their lifestyle and this provides jobs. We need 100K type people to generate jobs for all those on benefits.

No one likes paying tax, but the present system is punative to sucessful people.

Yes dh earns £55k and he pays high rate tax, his warnings are hardly a kings ransome. I am a stay at him mum so its the main household income. pathetic really, it should be reserved for those over £200k

Yes and loosing CB grrrrr

I think the bigger issue is the huge variation in cost of living across the UK while being trapped in the same tax bands.

Then Aud the two x £20k with an extra tax allowance to boot are clearly loaded and should be treated accordingly if 1x £42k is a kings ransom worthy of ludicrous tax.

Oh and if £41k is a kings ransom benefits are clearly way too high,as there is hardly a huge cut off between max benefits/TC and the upper tax rate.The big in the middle is ludicrously tiny.

Op yanbu.

YANBU I'm a SAHM because I have 4 DC and childcare is too expensive for me to work.

We lost CB which was just over 3K a year, DH had to earn an extra 5K to cover this (he doesn't) so suddenly we lost £242 a month that's a big chunk to lose.

My neighbours between them earn 80k but got to keep theirs.

I'm planning on going back to work next year when the youngest goes to school as only then does it become financially viable for me to do so.

bit

And what Sweet said

It's too bloody complicated.

I'm in favour of a flat rate like they have in Iceland & other more sensible countries

If you earn a little, you pay 25% (or whatever) of a little (i.e. a little)

If you earn a lot, you pay 25% (or whatever) of a lot (i.e. a lot)

It really pisses me off that the more you earn, the more you are taxed proportionately - it is a disincentive to work harder (unless you can vastly increase your earnings) & an incentive (to some people) to try to be sneaky with avoiding/evading tax.

YANBU.

I agree with you WitchWay. I think that seems much more sensible (and fair)

ReallyTired, DH earns quite a bit over the limit so increasing pension contributions wouldn't really work. You made a good point about getting an accountant though as at the moment I do his tax return.