Current tax thresholds act as a disincentive

[Transferwaiting]

I have been asked to apply for a promotion at work starting next year. This would mean a big jump in responsibility and a 10k payrise. I've been working it all out and because it takes me into a higher rate bracket and we have 4 DC, I would lose all CB and pay 40% of this in tax. I would actually only see £150 extra per month which whilst nice would not make up for the increase in responsibility and potential impact this would have on our lives and also doesn't cover any extra costs incurred for childcare/commute etc . I feel so disheartened.

FYI I am happy to pay tax and happy to pay more but this feels like such a steep cliff edge between being worth it and not. Surely many people must find this and we are missing out on a lot of talented people where it's not worth it making that jump.

The penalty for hitting 100k with children is worse. A HUGE rate of tax due to losing your personal allowance, and you lose the tax free childcare scheme.

But, I guess that they have to draw the line somewhere. There is always going to be someone disadvantaged. Exactly the same as the limits to losing other benefits. These line are drawn by policies and politics.

I think you can do tax returns for past years, so it may still be possible to get the tax back.

My dh is in the same boat. Only just fell into hrt bracket and now his bonus is also taxed a lot more too. We only gave us two and dc no extra help. Exhausted all the time and I've gone pt which is making things much worse but we just couldn't seem to juggle everything with both of us working ft and price of childcare and everything else going up.

Dh took the promotion two years ago but his pay hasn't gone up that much and his company constantly promise rather elusive promotions that don't come to anything. So I'd say be careful if this is your limit of earning. Dh is more stressed than ever and now thinking to move jobs even if it means being paid lease

Are you sure you'd lose all CB? What would the salary be minus pension contributions?
As Jenn3112 said, you'd have to earn quite a lot over 60k to lose it all by the time you've paid pension contributions

Generally speaking, the UK does not foster individuals' financial success, and entrepreneurship. The proportion of money you have to pay in one tax or another as your income increases, is enough to make many people say 'no thank you.' Especially when you are a net contributor.

@Transferwaiting

what did you decide to do??

WoofWoofWoofMudToys I still haven't decided. Will make the decision in March when I will know more details about the promotion. There are also other considerations with my husband's employment so we need to speak to an accountant (he's self-employed)

I'm in this exact position, civil service, G7 to 6 goes from approximately £50k to £60k. You also have the extra pain of an increased pension contribution rate when you go over £54k in the CS. We (usually) can't negotiate our salary. It's quite a big jump in responsibility too.

What's frustrating is the tax bands haven't been reviewed in years, £50k today is not the same as it was when it was last looked at.

It works out about £200 more a month for me overall, quite small considering the responsibility but I will do it because I want the role and to progress my career, hopefully the next jump will be more noticeable!

The government wants more tax so the bands are not going to change. Brings more people into paying high tax rates.

What's frustrating is the tax bands haven't been reviewed in years, £50k today is not the same as it was when it was last looked at this is the point the Tories are trying to remove CB altogether. In 10years only those on “low” incomes if 50k will qualify.

I wonder if CB is the reason they've not raised the 40% threshold, actually.