Page 16 | Income tax - top 45% rate scrapped! Bonkers!

HoppingKangaroo · 2022-09-23T11:29:46+00:00

The 45% top rate of tax (which currently applies on earnings above £150,000) will be scrapped entirely. How will this help the economy? It will just add to the government debt and it just helps out the very weathly. Why not have more help for the poorest in the country and not have tax cuts for the very wealthy.

Flixon · 23/09/2022 18:29

mumda · 23/09/2022 18:27

Will it make more doctors work more hours as they're not getting so penalised on tax?

no, because its not about tax on income but tax on pension contributions which are a fixed % and you pay tax on the growth of the pension pot not your contribution. so with inflation the pit may grow a lot leaving you with a huge tax bill to fund out of income. Its totally unaffordable. so many leave or reduce hours

TooBigForMyBoots · 23/09/2022 18:33

DarkNecessities · 23/09/2022 18:16

Both DH and I fall into this income bracket.
Financially we were always going to be better off under a Conservative government but we have always voted Labour.

However, this is what the majority voted for.

I think the majority do not believe they voted for this and that will be problematic for the government. Many of their voters are very unhappy indeed.😬😬😬

PixellatedPixie · 23/09/2022 18:35

PolarPolly27 · 23/09/2022 18:25

I worked it out by calculating that we will have 5% more income so we will have an additional £40k per year. In London our income only gives us a mortgage for a £2 m house and it seems ridiculous but if you look at how many houses / flats cost that much in London it’s not as odd as it seems.

If 5% of your income is 40k, your total income must be around 800 k. You should be able to get a mortgage for significantly more than £2 million if you are on PAYE and have, say, 400 k as a deposit. Where is your income going?

Our income is a bit more than what you said. Our mortgage is very big as we were young when we got it and our deposit wasn’t substantial. Maybe now we could afford more but at the time and on a very similar salary that was the maximum we were allowed based on our base salary and not on anything else. Remember that more of our income is in bonuses than in base salary and banks lend mainly on guaranteed base salaries - at least that’s what the broker told me. We had a ten year old car, only two kids and not very many expensive overheads at all. The most expensive holidays we had were at Center Parcs.

Leilu · 23/09/2022 18:36

Blossomtoes · 23/09/2022 15:16

we have a progressive and redistributive tax and benefits regime in the UK, and that is not changing

According to Truss it is. She and Kwarteng have plainly said their only interest is in growing the pie, they have zero interest in distributing it fairly.

No, it is still very redistributive after this change. Higher earners still pay for more in absolute and percentage terms than do lower earners.

Dannexe · 23/09/2022 18:37

PixellatedPixie · 23/09/2022 18:15

I worked it out by calculating that we will have 5% more income so we will have an additional £40k per year. In London our income only gives us a mortgage for a £2 m house and it seems ridiculous but if you look at how many houses / flats cost that much in London it’s not as odd as it seems.

Something people don’t understand is how capping banker’s bonuses didn’t lead to lower bankers’ salaries. It led to the banks increasing base salaries for people they wanted to retain so that their total comp was the same with smaller bonuses.

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You only get five percent more on anything over £150 since this is the bit that was previously taxed at 45% and will now be taxed at 40%

Purplepeoniesdroppingpetals · 23/09/2022 18:38

FaazoHuyzeoSix · 23/09/2022 13:13

You are working on the false assumption that the government wants to do what is best for the country and the economy. In fact, they realise their time is limited so are just trying to cash in for the benefit of the wealthy as much as possible.

The tiny amounts of gains for ordinary people will be dwarfed by the increases in costs from inflation and fuel prices so most people will be poorer the richest 1% get massively richer. Yay.

All of this.

1dayatatime · 23/09/2022 18:39

Make no mistake this is a massive gamble.

If it does generate UK economic growth in a world economy that is in recession then maybe the gamble pays off.

But if it doesn't generate UK economic growth then the UK economy is truly and utterly screwed akin to cap in hand to the IMF for a bait of the 1970s. As we will have massive Government debt, high inflation, stagnant economy and no Plan B.

Luckydip1 · 23/09/2022 18:39

It's amazing how socialist the conservatives became under Boris and May with the massive furlough handouts etc. Truss wants to make the UK competitive and an attractive place for talented people to work. Everyone will benefit from that.

Leilu · 23/09/2022 18:40

BigFatLiar · 23/09/2022 15:35

The very high earners employ accountants to make sure they pay as little as they can.

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There are no ways around paying your PAYE, which is why the top 1% of earners who earn 14% of all wages pay 30% of all income tax.

NonPolitical · 23/09/2022 18:40

PixellatedPixie · 23/09/2022 18:15

I worked it out by calculating that we will have 5% more income so we will have an additional £40k per year. In London our income only gives us a mortgage for a £2 m house and it seems ridiculous but if you look at how many houses / flats cost that much in London it’s not as odd as it seems.

Something people don’t understand is how capping banker’s bonuses didn’t lead to lower bankers’ salaries. It led to the banks increasing base salaries for people they wanted to retain so that their total comp was the same with smaller bonuses.

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You wont have 5% more income. On a £100,000 you would have -£1,469.88
more
news.sky.com/story/tax-change-calculator-see-how-much-you-will-save-12703831

Kissingfrogs25 · 23/09/2022 18:41

There we so many people rejoicing the loss of Boris Johnson, who refused to believe he would be replaced with a hardcore conservative - that was about to get very very serious about retaining the wealth creators that are supporting this creaking country for a very long time paying almost half their salary to the government.

I hate to say I told you so, but those that screamed with delight at the loss of 'BoJo' had no idea - no matter how many times is was pointed out - that what was coming would be, for them, much worse.

She hasn't even got started yet. Watch this space. The lovely dovey levelling up is kicked into the long grass, now they are getting very serious. After all, if we lose the top tax payers then we are screwed, so not a terrible idea to try and keep them in the country.....

NonPolitical · 23/09/2022 18:41

On 200,000 you would have £5,219.88

Neither are anywhere close to 5%

Leilu · 23/09/2022 18:43

SleeplessInEngland · 23/09/2022 15:50

This isn't a gotcha, it's a sympton of vast wealth disparity.

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Income tax is not levied on wealth, so no it isn’t.

NonPolitical · 23/09/2022 18:43

On a million income it is -£55,219.88- so 5% at that point but on a million you would get more than a £2 million mortgage.

Dannexe · 23/09/2022 18:44

NonPolitical · 23/09/2022 18:43

On a million income it is -£55,219.88- so 5% at that point but on a million you would get more than a £2 million mortgage.

That poster did clarify their income is over £800k

Leilu · 23/09/2022 18:44

MrsBennetsPoorNerves · 23/09/2022 15:51

Nobody is ignoring it. Some of us are just thinking, so what?

If you are in the top 1%, you're very wealthy. You can afford to pay a significant amount of tax to help those less fortunate than yourself. You might be a selfish twat and not want to, but you can afford to.

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But even after this change the highest earners are still paying a lot of tax.

Kissingfrogs25 · 23/09/2022 18:44

1dayatatime · 23/09/2022 18:39

Make no mistake this is a massive gamble.

If it does generate UK economic growth in a world economy that is in recession then maybe the gamble pays off.

But if it doesn't generate UK economic growth then the UK economy is truly and utterly screwed akin to cap in hand to the IMF for a bait of the 1970s. As we will have massive Government debt, high inflation, stagnant economy and no Plan B.

If we do nothing at all, one might say that is an even bigger gamble. We are then guaranteed to hit the buffers. I am glad someone is finally really grasping the nettle personally. The hot potato has been passed around long enough, time for the grown ups to take over. Yes it is bold. Yes it going to take nerves of steel but the alternative is so bad anyway - I am minded to say what do we have to lose...

Macaroni46 · 23/09/2022 18:45

Luckydip1 · 23/09/2022 13:27

This is a great budget which rewards success.

Really? You don't think public sector workers who are paid a pittance aren't worth rewarding!
Jeez!

NonPolitical · 23/09/2022 18:45

Dannexe · 23/09/2022 18:44

That poster did clarify their income is over £800k

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It isnt if they cant only get a £2million mortgage
Doesnt add up (like so much on MN)

Luckydip1 · 23/09/2022 18:45

Yes, it reminds me of MT, big bold unpopular moves that changed the country for the better.

Luckydip1 · 23/09/2022 18:47

Plenty of successful public sector workers will benefit from this and don't get me started on the pensions they receive which are infinitely better than those in the private sector.

Dannexe · 23/09/2022 18:47

NonPolitical · 23/09/2022 18:45

It isnt if they cant only get a £2million mortgage
Doesnt add up (like so much on MN)

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It could be. Someone close to me earns £390k but their net monthly take home is £6k because most comes in a lump sums from bonuses which wouldn’t be taken into account in the same way for mortgage purposes.

Leilu · 23/09/2022 18:48

lannistunut · 23/09/2022 15:52

But why 1% for the majority and then the additional 5% (average £10,000 tax cut) for the very highest earners?

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Because the highest earners are paying a disproportionate amount of tax, so this change is to make the distribution fairer.

NonPolitical · 23/09/2022 18:49

Dannexe · 23/09/2022 18:47

It could be. Someone close to me earns £390k but their net monthly take home is £6k because most comes in a lump sums from bonuses which wouldn’t be taken into account in the same way for mortgage purposes.

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They need a better mortgage broker!

Kissingfrogs25 · 23/09/2022 18:49

Leilu · 23/09/2022 18:44

But even after this change the highest earners are still paying a lot of tax.

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Why the fuck should the top earners stay here on this bloody island paying half their salary to the government to prop up the bloated benefit system? When they can pay no tax at all, relax on the beach every day and have an amazing lifestyle.

In order to keep the talent and those keeping our country afloat we have to be attractive to those that are highly skilled and create wealth, whom still pay a lot of tax by international comparison and support lots of local jobs.