New NI tax. How are people meant to afford this?

[OnTheBrink1]

We bought our house just before covid, got a mortgage that pushed us quite a bit but worked it all out and it’s been doable since then. We needed to push the mortgage quite a bit because we were upsizing to get an extra bedroom for the kids and a downstairs loo and in our area and from what we had before it was a jump.
Been managing since then but no progression opportunities in DH job during the last 18 months due to covid it seems as recruitment was largely paused.
However, now we will now have to pay an extra almost £900 per year on this new tax. £73 I make it.
We don’t have any benefits of any kind.
It’s going to be quite a struggle to afford the mortgage and still maintain the car (which is old but we need for work and kids stuff) plus all the usual bills and food. Kids are between 8-12 and need bus passes, constant uniform and all manner of expenses of course.
I mean we will struggle by but it’s going to be tough to afford that extra £73 a month when we had all the mortgage planned.
Just don’t get how they can bring it in so soon when it’s such an increase. How are others in a more difficult position going to afford this? People will be loosing their houses surely?

@cookingisoverrated

The money needs to come from somewhere.

Yes, it does. but not from hard working people who are scraping by and aren't able to save much so rich people can pass on their wealth to their children.

Hear hear! My dh and I can afford the increase, we have our own home and some savings and a combined income + private pension of around £35k. I fully expect our money to be used up in care fees when we need care eventually. My adult children don’t expect an inheritance, we helped them to buy their first homes several years ago when they most needed the help. Now they both earn far more that us!

I'm really irritated by the increase. I don't feel we use the social system as it is and now we're being asked to pay more.

We're both high earners (neither of us get a personal allowance, which is actually galling!). We then employ our nanny and cleaner through a PAYE payroll, so not only will we be paying more NI ourselves, we'll also be jacking up our monthly wage bill.

Our eldest DC has just started at private prep, so the fees will increase even more to cover the NI increase for all their staff.

I also expect everything we consume to increase in cost, as businesses look to pass these costs over to the consumer.

Our water bill has increased by 50% through the course of the pandemic and our gas and electricity has skyrocketed.

Last week DH was asked to consider a move to Asia with his company. We'll be considering it more seriously now. There comes a point where I don't want to increase my earnings any further in the UK, as it just gets eroded.

Why don't the government go after the big multinationals who use clever accounting (Amazon and their ilk) to avoid corporation tax!!! Also the stamp duty waiver of the past 18 months was bloody bonkers. What a waste of taxes and it's fuelled an unsustainable increase in housing!!

Thanks for that @PoshWatchShitShoes. Brilliant parody, it really made me laugh. 🤣 Maybe change your name to PoshWatchDiamondShoesThatPinch?

Why don't the government go after the big multinationals who use clever accounting (Amazon and their ilk) to avoid corporation tax!!

Yes, here we are all turning on each other while the really big earners get away with it.

@Blossomtoes

Thanks for that *@PoshWatchShitShoes*. Brilliant parody, it really made me laugh. 🤣 Maybe change your name to PoshWatchDiamondShoesThatPinch?

Er, this being Mumsnet, where a six figure salary is 'not that much' when you have 'essentials' like nannies and private school (newsflash: people on average incomes can't afford nannies, who would often earn more than they do themselves and they just have to suck up whatever school their DC are allocated to, no matter how poor and/or far away it is) taking up a large chuck of this, I suspect that *@PoshWatchShitShoes* is being entirely serious.

Can you understand why you're sounding very tone death when you're sat here as a high earning household saying you can't afford a tax rise?

Of course you can afford it if you live within your means. And no you can't say that to everyone. There's people out there genuinely struggling living paycheck to paycheck where cutbacks = sacrifices such as going hungry, facing eviction and becoming homeless.

@BarbaraofSeville @Blossomtoes of course I'm being serious. Are you only allowed to be pissed off at a tax rise if you earn below a certain amount?

I didn't say I'd struggle, I said I don't want to pay more. It does lead to different lifestyle choices, such as not putting the additional amount into our pensions.

P.s. I like my £6 shoes from Asda 😂 I don't think they're shit, it's what one of my friends said when I took them off and she saw the label.

Some of us would pay more if we thought that the money would be spent well. But we have wasted money with the failed Track and Trace and useless PPE lining the pockets of Johnson's chums, and wasted far more than the £350 million a week 'getting Brexit done', so some of us would like to see some return on our extra taxes. I am a pensioner - I haven't needed to use the NHS much fortunately, and don't have any children/grandchildren in UK schools, but I still think that they are things which are worth paying for.

With my modest pensions taxed under PAYE, I don't have the options for creative accounting stashing money away as it does for the wealthy.

Are you able to remortgage? You mention that you bought before Covid, so your property has almost certainly risen in value - you may be able to arrange better terms, to help you out. Alternatively, are you able to take a payment holiday? I left a job and retrained (on no income) and my mortgage company allowed me to take a payment holiday during the retraining period - this took the pressure off.

I'm really irritated by the increase. I don't feel we use the social system as it is

Oh, not this old chestnut. Newsflash: the point of tax isn’t to get out what you put in. It’s the price of civilisation, to quote a former member of the US Supreme Court. I’m sure that you’d be the first to complain when your nanny couldn’t take your children to the park without stepping over the starving beggars.

Some of us would pay more if we thought that the money would be spent well

Another old chestnut! Two on one page. Do you get that you don’t get to choose how taxes are spent at the micro level, and that what you consider important may not be important for everyone? I’ve even seen people suggesting that they should be able to vote on how their own taxes are spent, which is an insane idea. Who’s going to vote for sewers or prisons?

Are you able to remortgage?

She really shouldn't have to!

All to keep the inheritances in tact for wealthy pensioners! It is a disgrace. It is not okay to rob from the poor to pay for the rich. I say this as someone with parents that own a house, in my view if they need care then we expect to have to pay for it/or do the caring ourselves!!

This situation is outrageously unfair on people that work hard for a living and young people trying to start out in life.

I suspect that @PoshWatchShitShoes is being entirely serious

I’m sure she is. What’s appalling is that it’s so utterly tone deaf it reads like satire. There are people for whom this NI increase will mean buying less food or turning their heating on less. You’d think people in such privileged positions would have the grace to keep their thoughts to themselves.

This situation is outrageously unfair on people that work hard for a living and young people trying to start out in life

I entirely agree. As a pensioner this won’t touch me and it should. The burden should be spread evenly and that could easily have been achieved through income tax.

Since you are taking me to task.Who’s going to vote for sewers or prisons?

I would most certainly vote for sewers, although for many it might have to be marketed as waste disposal. As for prisons, we already lock too many people up, so I think money would be better spent on alternatives.

That to me has been the only blessing of being a relatively low tax country - the amount going to Johnson's chums has been limited.

@PoshWatchShitShoes is allowed to be irritated by it, even if hardly scraping the barrel. She also makes a good point about stamp duty break back firing badly. Wasted tax and housing even more unaffordable 🤦‍♂️

@Blossomtoes well thankfully you aren't the thought police 😂 This is a public forum with a wide array of members from many walks of life. Everyone is welcome to share their different perspectives, not just those who face financial hardship.

The ramifications of a tax rise like this have wide-reaching repercussions.

It's clear that there will be even greater financial hardship for many families. There will also be vast numbers in society where this additional NI bill will eat into their available discretionary spend. When those individuals don't eat out as frequently or decide to delay buying a new car or no longer hire services, there's an extensive trickle down effect on the individuals employed in those businesses. That's where there's enormous risk of damage to the wider economy.

I can't understand the outrage at the member in asda shoes. Decisions taken by her now will inevitably cascade down the food chain.
I am not rich, but remember when I could no longer afford a nanny - after the compulsory workplace pensions / nest scheme introduction, which increased her total cost by around 5%. It already was around 70% of my salary, could not manage with an increase to 75%, it simply became unaffordable for me. She had to go and take a much lower paying cleaning job. I had to take another, lower paid, position, more consistent with nursery opening hours, and paid less tax. Win-win indeed.

How great would the financial hardship you are bleating about have been for the ‘many families’ you profess to be concerned about, if we hadn’t had the furlough scheme?

I’ll tell you: it would have been much worse than eating out less often or delaying buying a new car.

Well, now the furlough scheme needs to be paid for. Through increased taxes. That can’t be a surprise, surely?

@Iamthewombat I'm talking about the macro economic impact of a tax increase. I'm not surprised about the policy decision (and I dislike BoJo as much as anyone else on this thread).

My issue isn't about an individual not being able to eat out or buy a new car. That's not a hardship in the slightest. However, we should all be concerned about the wider impact of this, as the consumer trickle down is enormous!

I'm now rethinking why I payroll a cleaner. Plenty pay cash in hand.

I'm now rethinking why I payroll a cleaner. Plenty pay cash in hand.
Payrolling a cleaner is probably rather unusual, unless she has a near full-time exclusive employment with you. I think it would actually be more beneficial financially for them to be self-employed too.

Yes but what is the point of complaining about a tax increase when it’s happening, in part, to compensate for the effect of the country having to support its citizens through the pandemic?

1.25% on NI and dividends might affect the economy. It might not. However, we can say for certain that not having the furlough scheme would have been catastrophic for the economy so it’s pointless to suggest that people might spend less and that would be terrible. There is no alternative to higher tax.

The trickle down effect on the economy of a 1.5% rise in some taxation is insignificant in comparison to the recession that’s inevitable in the next few years. We’re going to be looking at inflation, rising interest rates and much higher taxes. This is just the start.

Some of us can remember inflation running at over 20% a year, interest rates at 15%, a top rate of income tax of 83% - which even Thatcher managed to reduce to 60%, houses being repossessed.

Our society has become addicted to low tax levels while bemoaning the inevitable accompanying deterioration in public services. I very much hope to be wrong but I suspect the pandemic might push over the entire house of cards and this is just the beginning.

I think I might have started some of this with my talk of hairdressers and take away coffees. I appreciate that isn't demonstrating hardship and I'm not choosing between eating and heating. Various increases in costs do mean that I will reduce my discretionary spending and if millions do the same then it will have an impact on the wider economy. I'm not saying I disagree with the NI increase, as services need to be paid for, I'm just pointing out that a lot of costs have gone up at the same time and it will impact on discretionary spending and therefore the wider economy.

@zenthoughtsonlythanks

Are you able to remortgage?

She really shouldn't have to!

All to keep the inheritances in tact for wealthy pensioners! It is a disgrace. It is not okay to rob from the poor to pay for the rich. I say this as someone with parents that own a house, in my view if they need care then we expect to have to pay for it/or do the caring ourselves!!

This situation is outrageously unfair on people that work hard for a living and young people trying to start out in life.

I really don't know how you can say this. Inheritances are given to the inheritors of the 'wealthy pensioner'. I am sure you must know that 'wealthy pensioners' - which assumes they are not on circa £12k per annum like many pensioners - could well afford to buy their own care rather than rely on the social care budget. I would suggest that instead of blaming a generation for what you don't like - you consider that nearly half of social care spending goes on working age and under people who have disabilities or illness. In this case - payment is met in full by the local authority from the social care budget as there are no assets to use. In addition the 'not wealthy' pensioners require their care to be fully-funded. Wealthy pensioners are not the ones being paid for by working people and the young.

I’m think it’s a good thing for working people on all salaries to be questioning why we’re having to pay more. Council tax has shot through the roof and we’re getting much less. I’m not of the opinion that we should all kowtow and open our wallets. The furlough scheme was a mess and cost more than it should have, test and trace wasted billions, not to mention all the other contracts given to friends at great cost with little return. MPs have had a cracking wage increase (as did hmrc) and are able to claim enormous expenses. It’s not just about money, it’s about value for money and I’d be quite happy to pay the 1.25% to hasten the covid enquiry, or to investigate those not paying their taxes.