Question time man top 5 percent.

[refraction]

Did anyone see the man on QT asking about tax?

Apparently he doesn't even think he is in the top 50 percent of earners.

All doctors earn more apparently and solicitors.

How out of touch with reality?

He didn't come across well and very out of touch.

What is ridiculous is a couple earning £40k each will take home far more than a single person earning £80k especially if there’s child benefit involved. Yet you wouldn’t call such a couple particularly high earners.

Did you read the rest of my post? Of course they are. Job-specific market rates are governed by what people actually take home vs the cost of living. I’m not saying they’re advertised that way, but the market and other available options sets the wage. Otherwise people wouldn’t work for you.

As I said, if tax rates go up, so will most wages, especially at the upper end of the spectrum. People will start shopping around for a wage increase, pushing up the market rate - in the private sector anyway.

What is ridiculous is a couple earning £40k each will take home far more than a single person earning £80k especially if there’s child benefit involved. Yet you wouldn’t call such a couple particularly high earners.

Yes of course they will. That’s the case now, thanks to personal allowance and tax banding. That’s nothing new.

Which is rather why London salaries are higher than elsewhere in the uk

No he is a higher rate taxpayer. He earns over £60k pa so is officially in the 10% highest earners (note NOT 10% wealthiest).

These Sunday jobs are paid at ...lets say £100 gross per day. The extra a member of his team will take home FOR THAT DAY SPECIFICALLY is £80 (I am ignoring NI for this example). The amount my DH will take home for that day is £60. To take home the £80 his team get then he would need to be paid £134 gross.

Ah, you mean, instead of being paid his (higher) rate with an overtime multiplier, he is being given a flat-rate payment, the same amount as everybody else.

That's rather unusual.

Are you sure that's what happens?

It's more usual to have a payroll calculation that goes:
Annual salary divided by (say) 220 working days to find normal daily rate
Divide by nominal daily working hours (say, 7.5) to find normal hourly rate
Multiply by hours worked on non-standard day
Multiply by overtime rate (e.g. 1.25; 1.5, 2.0) if any
All subject to terms of contract of employment.

In my experience, managerial grades don't get paid overtime.

If he earns around £60k p.a, basic, I'd estimate his normal rate at around £250 a day. So if he only gets (in your example) £100 he is presumably working a fraction of a day. I wonder what fraction.

Maybe the £100 is calculated to exceed the hours x rate amount as a sort of "bonus" for the inconvenience.

People moaning about tax really pisses me off.

I earn more than the idiot who was on TV, I don’t begrudge a single penny I pay in tax and I would happily pay more.

No, being a high earner doesn’t mean I have a particularly flash lifestyle (I did when I was with an ex who out earned me). I have a nice two bed flat, I own 50% of my exes flat, I own a parking space and a car. I can afford heating, food, clothing, shoes etc. Simply being able to afford those things without worry does make me very rich in the grand scheme of things.

Ignoring NI will distort the position too. His marginal NI rate will be 2%, theirs is likely to be 12% (because you seem to be sure they aren't being tipped into being higher rate taxpayers by the overtime, which would also put them in the lower NI bracket).

So they would take home £68 out of £100 gross. In order to take home £68, he would need to be paid £117.

Given that he's on £60k, and they are on sufficiently less than £50k that you are sure they aren't being tipped into being higher rate taxpayers by the overtime, he must earn significantly more than 17% more than them. Therefore his daily rate should be sufficiently high that he will take home more than them regardless.

Piglet John is right - it would be extremely unusual to pay the same flat rate for the day to everyone, regardless of grade. Not the norm at all.

For those saying those traders with limited companies pay a lot less tax in the last 4 years that utterly changed by the way. When they withdraw their income as dividends they pay just ahbout the same rate as people like I am who are sole traders. There is a minor natinoal insurance benefit (and if they own a company with a non working spouse and they "share out" the income between the two or employ their spouse who is in a lower tax band that can also mean they pay less tax but for couples where both work full time the old advantages of being incorporated in terms of tax (but not in terms of limiting liability) have largely gone.

The bottom line is that tax of all kinds including indirect tax - VAT etc is far too high.

Therefore his daily rate should be sufficiently high that he will take home more than them regardless.

His rate for doing HIS job obviously is higher. That’s why managers don’t get paid overtime as such. These Sunday jobs are payed at flat rate regardless of grade which is why DH and the other managers usually turn them down ... unfortunately that means the work often doesn’t GET done because there has to be a senior manager on site during any work.

The issue is with the employer, not the tax system. Paying managers and their teams at the same flat rate is obviously not going to attract managers to work those shifts. Why would anyone do overtime at less than their normal daily rate?

The bottom line is that tax of all kinds including indirect tax - VAT etc is far too high

Well - that's a whole economic argument, isn't it...

Somehow, things need to be paid for by Government spending.

How that money is generated, and the economic policies behind that is I guess driven by personal ideology..

As well as the spending that Government does.

These Sunday jobs are paid at ...lets say £100 gross per day. The extra a member of his team will take home FOR THAT DAY SPECIFICALLY is £80 (I am ignoring NI for this example). The amount my DH will take home for that day is £60. To take home the £80 his team get then he would need to be paid £134 gross.
Do all workers are paid the same rate per day as your supervisor husband? Every single person gets £100 per day?

You understand that that's unusual. Overtime is usually x1 or x1,5 or x2 of usual pay.

Plus you understand that if a person on OT, who is usually only paying the lower rate of tax, gets paid more it can push them over the week threshold and they'll paid a higher rate of tax on some of that income that week. (Presuming they are PAYE.) They of course may get a refund depending on the total earnings in the entire tax year.

I think the disconnect is between wealth and income. We earn a lot more than 80k but had kids young and as a consequence spend the majority of our income on rent and childcare. We are not able to get on the property ladder because houses are so ridiculously priced in our area and as a consequence we rent a 2 bedroom flat with 2 kids for more than £2k a month (near good schools). We are not poor but do not feel rich. We do not feel as rich as those who have long paid off their mortgages even though their salaries are far lower than ours because they are not paying out 4k a month in childcare and rent...

Most people simply don't have £4k pm to spend on rent and childcare so don't have the luxury of being able to live near the good schools and use the same expensive childcare option as you.

They have to go to the bad schools, work opposite shifts to reduce childcare costs, live further away and spend more time travelling, have lower amounts left for food, bills and fun stuff so while you don't feel rich because you spend so much of your very high income on what seems like boring necessities, there's still a huge amount of 'nice to have' that few people can afford built into that.

I am sure you are a very nice person, but to be honest to live in London in a 4 bedroom house, to be able to afford 2 vacations a year and have that amount of savings - yes you are very well of.
I live in London, and most Londoners can not afford those things. There are kids who go to school with their shoes ducked taped together because the parents can't afford new schools shoes, and schools who serve breakfast to the many kids who are not given breakfast at home...

According to Fuckynel’s link, we’re in the top 0.31% of wealth globally. We’re both retired and my husband has yet to receive one of his occupational pensions and his state pension. I know we’re comfortable but I’m totally gobstruck by that. I’ll be counting my blessings a lot more often now.

And our income, as you’d expect, is considerably less than £80k.

A family spending 4k a month on rent and childcare to live near good schools are almost certainly exercising some degree of choice, but it is true that there's a disconnect between wealth and income. A generational one.

It's much less significant for those of us in the north of England, though not absent, but in the south east there are oodles of people living in now very expensive houses, sitting on substantial unearned equity, who could never afford to buy their home now. In some cases they'll be living next door to private renters who earn significantly more than them but will never have anything like the wealth, because of when they were born.

Now I can't imagine QT man falls into this group if he lives in Bury, though he is a millennial so in the right (or wrong) age cohort. Which is one reason why I think the posters who are claiming he was making a wealth v income point were reaching. But it's a significant issue in our society and we cannot ignore it when making economic policy.

To be honest we can’t really live much further out (we are zone 3) and still make our commutes work. It seems silly to give up our good professional jobs although I’m considering it as it barely makes sense. If I quit my £50k job as the lowest earner and we move further out of London we would be a lot better off, although DH would have a longer commute. Currently, dropping off one at nursery and one at school would be impossible if we both work and live further away. We could pull DC1 out of a good school move away from good secondary schools without impacting too much on commute and save maybe 4-500 on rent. I agree that’s a choice we have made and I did say that we are not poor, although it still feels as if there is a generational unfairness, especially when I compare us to our parents.

The cheapest 3 bedroom houses around here are £750k and most houses are £1m plus. In order the afford those as a first time buyer (ie without bringing along massive amounts of equity) you need to be on extremely high 6 figure salaries and have an enormous deposit, nevermind the £30k for stamp duty. None of the main political parties seem to be suggesting wealth taxes, just more income taxes. Wealth inequality is much more of a problem, how much income tax do billionaires really pay....

HiJenny
I live in London too, so I know that anyone who can afford a 4 bedroom house, 2 vacations a year and has 6000 in savings ARE very well off. Most Londoners cannot afford this...
In London there are plenty of children who duck-tape their school shoes together as they can't afford new one, and many schools offer breakfast as plenty children come in hungry as they are not given breakfast at home.
You sound like a nice person, but I can only assume you only mix with people in similar situations. London is massive, start looking outside your bubble.

Of course there's generational unfairness. It's seen at all levels of society, whether that's being stuck in a b and b when you're homeless because there's zero chance of a council flat or being a top 1% earner who can only purchase an objectively fairly cruddy flat because you were still in uni when house prices started to decouple from local median incomes.

Even QT man, in his fortunate position, will be experiencing this. I outlined upthread that a single earner on 80k in his area could privately educate two kids and still have enough over to pay all living expenses no problem. His parents generation on the pro rata equivalent of 80k 25 years ago could've done much more than that in Bury!

Sorry! I posted twice as the internet connection disappeared, so I did not see that my message had gone through...

The bbc have a fact check on their website, he's very much mistaken, depending on which "average" you use, the top 5% is either £78k or £81k

My stbexh earns this and we aren't "rich" but that's because there's super wealthy living lavish lifestyles, but comfortable, at least I was ... I'm now in the bottom 20% alas