To kind of agree with Boris about tax?

[taxwtf]

I've never voted Tory in my life and can't stand the man. I'll never vote for him/them. His plans won't work because he's spouting crap and nothing adds up and Brexit will make us all poorer.

But...

Earlier this week someone I line manage asked me to check their payslip as they'd had a couple of extra payments and sick pay and weren't sure it was all correct. This person works 50% of the hours I do and is several points below me on our pay scale. I am a manager with a lot of responsibility and they are not. I now know that they take home about half what I do for working half the hours AND having waaay less responsibility/tasks etc.

I obviously don't begrudge this individual a single penny. The reason for this disparity is tax. The last few pay rises I got were barely noticeable in reality once tax, NI and pension contributions had gone up. If this person ever goes full-time their pay obviously won't double, but will not be as far behind mine as they might imagine.

WTF is the point of all the extra I do? As a single parent I also lose out so I strongly believe household income should be looked at instead of me subsidising married couples as is the case now. I wish I'd never seen that payslip, but although Boris's 'plans' obviously won't work, AIBU to think the tax system needs a massive overhaul and people like me in decent jobs, high end of our careers but absolutely NOT on silly money, should be better off?

I understand what you’re getting at, OP, and it’s a really tricky one. I think it’s almost impossible for a taxation system to ever truly be fair, but I suppose the bottom line is that we need / expect a certain level of public services and we need the cash to get that somehow.

With the nursing analogy I suppose it would be like a senior, full time nurse taking home only double the amount of a more junior, non clinical staff working half their hours (so basically the same hourly rate). The nurse could rightly feel that their additional stress, responsibility, skill etc isn’t recognised at all. But as I said above, I’ve no idea what the solution is whilst still protecting public services.

because that is just putting your own money away for retirement and you will personally benefit from it one day
Except thatvitvwould come at no surprise if in 10 years, the state pension becomes mean tested and those who will have paid much in their private pension will again lose out so that those who paid much less, in addition to the state pension will end up with almost the same disposable income.

Every time someone start a thread like this one, people debate what a good income is, when income alone means nothing. The same worker on the samexsalary in the NE will be much better off than his counterpart in the SE. The latter might find himself not much better off than a lower paid worker entitled to tax credits and HB, after all bills are paid.

Except thatvitvwould come at no surprise if in 10 years, the state pension becomes mean tested and those who will have paid much in their private pension will again lose out

Paying into a pension is almost always optional. The OP could just stop paying in if they really think that will happen.

YANBU OP.

I'm not a Tory, but I'm a higher rate tax payer and a parent and in a stressful professional career for which I've worked ridiculously hard and every time I get a pay rise, it is consumed by tax. That's hardly motivating.

I'm a massive supporter of a progressive tax system. IMO the tax system in the U.K. is not as progressive as people think and a massive load is borne by middle earners who basically earn well but are not rich enough to take advantage of tax planning unlike the very rich....

However, doing what Boris is suggesting wouldn't make the tax system any more progressive and isn't affordable. I think that a few more steps should be built into the rates, e.g. it would be reasonable for say the additional rate at 50k to be 30% and then at 80k the additional rate be 40%.

Don't get me started on council tax, that's so non-progressive....

Biris???. Him as well.

Im with far2go

I think the biggest outrage is that wages are so low the Government has to top them up to allow people to live. That’s just madness.

Personally I would prefer to pay more tax and have decent public services, keep a week funded NHS etc

I think the biggest outrage is that wages are so low the Government has to top them up to allow people to live. That’s just madness.

But people shop around, which drives prices (and thus wages) down ...

YANBU
People who just over this higher rate threshold actually are in this unfair situation. They usually have more experience/ higher responsibility than their colleagues who are below this threshold ( I don’t mean people on low paid jobs, I mean colleagues who have 30-40k) but affected by higher rate of tax and have no excess to child benefit.
So a single mother earning 50k a year would take home 3.5 k less than a couple earning the same amount (25k each). How is it fair?

I think Rory Stewart had it right (and I wondered why he wasn't standing for Labour) - with the country in the state it's in, with education, health, the police, prisons, social services etc all at rock bottom after austerity, there just isn't the money for tax cuts. Any money we have should be going into public expenditure right now.

Didn't he say something in the debate along the lines of "You four have spent £85 billion in the last five minutes"?

Yanbu I completely agree with you OP. I’m a teacher, and I know a fairly significant number of people who do the educational ‘equivalent’ of what you describe. Eg teachers who won’t work full time hours, or people who deliberately remain ‘underemployed’ - graduates or qualified teachers doing LSA roles. As a middle manager I know I pay shed loads more in tax and NI. If I were to calculate my pay as an hourly rate for the actual hours i do, it would be the same as someone with way less responsibility.

BUT don’t underestimate the importance of that pension. I’m now in my 50s, approaching early retirement which simply isn’t an option for my colleagues and acquaintances who work p/t or in lower paid roles

I also highly doubt the state pension will ever be completely means tested because the one thing the govt is totally dead set on is getting people to pay into their own pension fund. They won’t do anything that might discourage people from that. I can see them continuing to raise the state pension qualifying age though.... another reason to not rely on the state pension. Plus- the state pension is a pretty paltry amount... I certainly wouldn’t want to be relying solely on it.

So I totally get where you’re coming from, but ultimately I honestly think a lot of people who deliberately work in ‘easier’ jobs or who remain on part time endlessly are going to be reaping what they’ve sown in their older age. However unfair it feels now OP, you are securing your future by taking on a better salaried role and more responsibility

Maybe rather than looking at marriage making the tax system unfair we could have a tax allowance from birth - this, like the marriage allowance could in part be allocated to a resident parent. Evening the household tax allowance between two parent and one parent households and also helping with acdessibility of child benefit in some single parent households. If in higher education it could be used to help towards living costs etc.

we could have a tax allowance from birth

umm..we do

It can't be allocated against parents tax but is used by children's savings accounts.

I know what you mean op. I’m at the stage now where there is no real financial incentive for me to progress. I want to pay more into my pension but tax effects are adverse. It’s demoralising for sure. Now considering offshore roles, at least for a period.

I agree with you. I was full time £32,000 a year, came out with £1950 after pension and student loan.

I did job share reduced to 2.5 pay cut in half netted £1300.

£650 difference, my net pay was not cut in half

Earlier this week someone I line manage asked me to check their payslip as they'd had a couple of extra payments and sick pay and weren't sure it was all correct. This person works 50% of the hours I do and is several points below me on our pay scale. I am a manager with a lot of responsibility and they are not. I now know that they take home about half what I do for working half the hours AND having waaay less responsibility/tasks etc.

If someone is working half your hours AND is way down the pay scale from you, their salary will be far less than 50% of yours, regardless of the tax. If it's only half, then there will be other deductions from your salary, such as enhanced pension contributions, or a benefit in kind hit for a company car, or private medical, or some other benefit.

I happened to see a colleague's payslip this week. We work the same hours but I am three bands higher than her (we are in the NHS, so not increments which are the steps within a band, but three actual "promotions" above her, although she has a different job so wouldn't actually get promoted to my band IYSWIM) and I was surprised at how similar her take home pay was to mine.
I pay more tax and NI obviously, but I also pay a higher percentage towards my pension (so not just more because I earn more), higher union fees, higher professional fees, indemnity insurance etc, am not entitled to tax break on uniform fees either. I am not entitled to overtime payments either - any extra time is paid at 0.3 of my hourly rate and I get time back, so I have no opportunity to earn more whereas she can get laid time and a half for weekends etc.
It is annoying, not so much the tax but all the other aspects.

That's just the way it is... I got a bonus a few months ago but it was barely noticeable due to the increase in tax, NI, pension and student loans. The more you earn the more you have to pay out.. simple

I am a firm believer in lower taxes bringing in more money.

I started work in the 1970s 33.3% basic rate tax and the country was on its knees

Lower taxes = more tax income

The more you tax people those that are in a position to protect their income just don’t pay anything and the cost of the spending on the forecasted tax income becomes the responsibility of those that are not in a position to protect what they earn I.e those on PAYE

I would like a larger pay packet.

But what I would really really like is a well funded NHS, police service, education system etc etc.

But people aren't factoring in their tax free allowance. If you earn £20K then you are only paying tax on £8.

lijkk looking at that pdf, you'll note that the HRT threshold dropped from 2011-2016, so in 2019/20, it is just above what it was in 2010/11 by £500.

As someine said upthread, you have to look at the tresholds plus the allowances carefully to see if it worth taking a promotion or not. If you raise the HRT, then people will want to further their careers if they keep more of the money they earn.

I'm sorry but what are you talking about the person earns half you earn and you are annoyed because?
Also why do you think you are subsidising married couples ?. I'm not sure what your point is if it's that higher earners shouldn't pay as much tax I disagree.

snowbrigade I thought and still do, that Community Charge was fairer, but the general populace didn't seem to think so, ergo CTax, the hybrid of Community Charge and Rates.

Over a certain level your personal allowance tapers and then disappears.
The issue is the operation of income taxation operates as a disincentive to people to progress. I can’t see how that’s good for anyone. It’s very demoralising for the individual, creates problems for employers who want to operate effective reward and retention programmes, and creates resentment which in turn means its harder to reform the tax system (people aren’t bought in). You can’t say to people who know how things work that there’s s simple equation between paying more and getting better services. We know it’s more complex. We know there is waste, and people taking public salaries who are adding no value. We’re not bought in. I just want out. I’m sick of being milked on the one hand and told I’m a rich scumbag on the other. As soon as I get the right opportunity I reckon I’m off.