Rishi pays tax at 22% and NI.

[GPTec1]

This really, £5m in earnings, tax 1m, rate at 22% and no National insurance.

Not bad is it? yet all we get from the 'right is "the wealthy pay enough already"

Do they?

I bet all those on/or have been striking in NHS, education, rail would love an overall rate of 22%.

Should we all pay tax at 22% ? regardless of earnings?

So he is paid what he is obliged to pay. The nasty Tory.

Interesting to see Starmer suddenly being opposed to rules on pension taxes. Didn't seem so bloody bothered when the "The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013" were brought in. Typical Labour.

I'm with you. Starmer is absolutely pure evil. I can't believe so many people are being fooled by the press into supporting labour in the polls .

So he is paid what he is obliged to pay. The nasty Tory

No one is saying any different or calling him names, only you.

Interesting to see Starmer suddenly being opposed to rules on pension taxes. Didn't seem so bloody bothered when the "The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013" were brought in. Typical Labour

The Tory PM, David Cameron, bought these rules in, Typical Tory!

The thread is about whether someone who earns £5m, should only have a tax rate of 22%.

Starmer (PAYE) paid tax at 34% on earnings of £129k.

All high PAYE earners would pay up to 45%.

Pure Evil! so what exactly is under Starmer's patio?

I didn't say anything about fairness. It is simply illogical to assume that being born into a wealthy family makes someone inherently more capable, or talented and there's certainly no evidence that wealth and privilege imbues a person with integrity or decency. The fact that people genuinely believe these qualities are less desirable in our political leaders than the "connections and polish" paid for at Eton is what depresses me.

I can't believe anyone can be fooled by Keith Starmer, he is just a near do well former barrister who at best Jeremy Corbyn Mark 2.

On his PAYE income Rishi will have paid income tax of £55,233 in 2021/22 - 35.37%.

Kier Starmer paid £42,922 on £126,154 - 34.02%.

Rishi's dividend income was taxed at 38.1% and the Capital Gains taxed at 20%, so it's the CGT that brings the average down.

Looking at Kier's CGT, he's paid tax at 28% on these gains.

28% is a higher rate because he made an £85k profit on the sale of a residential property that wasn't his home.

@InSpainTheRain Rishi’s PM salary will be PAYE. This will form part of his total income and total tax.

The examples I have given were to illustrate that people with lower total income e.g. £25k, pay c10% tax.

I accept he receives income from dividends etc. which are taxed at the appropriate rate. The point is someone with a total income of £25k may also have dividends in that figure. I do.

Believeitornot
PPE isn’t a decent grounding in economics

Rachel Reeves studied PPE

GPTec1
"The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations 2013"
The Tory PM, David Cameron, bought these rules in, Typical Tory!

annual reports from the Crown Prosecution Service (CPS) after Sir Keir’s appointment in 2008 show that while the pension deal was not finalised until 2012, it was conceived under Gordon Brown’s government

https://www.telegraph.co.uk/politics/2023/03/22/labours-attempt-blame-tories-starmers-pension-tax-deal-backfires/

This 👆

Ultimately, he is within the law. If we don't like it we need to change the law, or vote someone in who will change it for us. (I do not necessarily subscribe to the idea that it needs changing though, but that's a whole other discussion).

I am in the higher tax bracket (although not in Rishi's league) and will be paying more tax after the budget along with most people.

He is taxed in the same way as every Tom, dick and Harry in this country at the same rates - he hasn’t even used any specific tax planning schemes.

please understand the tax system before speaking nonsense - and I say that as a tax lawyer!!

this is like people conflating tax evasion (not paying tax due) with tax planning (mitigating tax liability by using legitimate reliefs - like… zero VAT on biscuits, SDLt first time buyer reliefs, ISAs… you know the rules that the whole population benefits from that is definitely not illegal)!!!

Some people are wondering why CGT is only taxed at 20% (excluding residential properties) whereas income is charged at 40% or 45% for higher earners.

In 21/22 Sunak made Capital Gains of 1,641,431. He has a tax free allowance of £12,300 and the rest is taxed at 20% - giving tax of £325,826 - the amount he paid according to the tax return published.

This gain could have come from a £3m investment he made in January 2014 that he sold for £4,641,431 in March 2022. We have no idea of the actual figures and we will never know. This is just an example to show how CGT works now and used to work in previous decades.

Before CGT was simplified to the current system (changes started in 2008) an allowance for inflation called indexation was applied and the taxpayer paid CGT at the same rate as their income tax (40% at the time for higher rate taxpayers). This indexation was reasonable as prices increase by inflation so an investment could be expected to have equivalent purchasing power years later when it was sold.

Under this far more complex system, the £3m purchase price would have been increased by RPI indexation from Jan14 to Mar22 which is 28.1%, so for tax purposes the purchase price would be £3.843m, the taxable gain would thus be £4.641m-£3.843m = £798,431 on which tax would be paid of 40%. The tax would thus be £319,372. As you can see this is a little less but very close to the amount paid under the current CGT system, yet the CGT is being paid at 40%.

Except the company has paid corporation tax on it's profits before a dividend can be drawn from them (so 19% plus 8.75%, or plus 33.75% for a higher rate tax payer). These days there is practically no advantage to taking dividends over paye salary.

And this is even more pertinent with such high inflation and now the CGT free annual allowance has been reduced. At the moment you could find yourself paying CGT on inflationary gains.

None of this applies to Sunak.

He made the vast majority of the £5m over 3 years with an investment trust in the USA.

Financial experts say he must have many millions in this USA based trust.

Does our British PM invest in the UK or only in our competitors?

@GPTec1 you're not honestly suggesting it is wrong for our PM to invest overseas!

Well, actually i would expect the British PM to be investing the majority of his wealth in the UK, just as i would expect his wife's company not to be backing Russia.

@GPTec1 really, you think you or anyone has a right to tell someone else where they can invest their money?

I hope you don’t buy products from abroad, have any investments abroad or even go abroad as clearly you don’t believe any GBP should ever leave the country.

Rishi was living and working in the US when he amassed his wealth, it’s not surprising that he would have chosen to invest in US/foreign companies.

Remember Rishi will not be PM for life, he could very easily lose his job at the next election. Financially providing for his family for the long term is a step most sensible people would take.

Well, actually i would expect the British PM to be investing the majority of his wealth in the UK, just as i would expect his wife's company not to be backing Russia.

What a ridiculous post. As a pp said, do you spend all your money within this country? Do you use Amazon? Do you only shop locally to you? The idea he should only invest in this country or give up investments he acquired livung elsewhere is stupid and as stupid as saying anyone else in this country should only spend their money here with uk companies. Which nobody I know does. I mean god, we import 50% of our food!
As for his wife’s company ‘supporting Russia’, what do you mean?

No he didn't he has been a UK MP for many years, his is a choice, which most people do not have & he chose not to back the UK or UK based businesses, he backed USA ones, which just goes to show what he things of the UK.

Plus i didn't say ALL of his wealth either or did i say he should "give up" his investments? Do you people just make up stuff as you go along? though i do appreciate that is a Tory trait,

Plus do i call you stupid ?

They both, as a family benefit from Infosys, which is still operating in Russia or certainly was until at least late 2022.

Remember Rishi will not be PM for life, he could very easily lose his job at the next election. Financially providing for his family for the long term is a step most sensible people would take

Lol with a family fortune of £740m and his wife an heiress to a billionaire, i doubt he has to be watching his pension provision for when he retires, do you?

You re trying to draw equivalence to someone on average earnings, he along with most in Westminster are completely out of touch with normal peoples lives and struggles.

though i do appreciate that is a Tory trait,

who is this directed at? I’m not ‘a Tory’. You’re childish. I didn’t call you stupid, your suggestion is though. It really just seems like you hate the tories, hate anyone richer than you and are generally bitter

Childish & bitter now!!! got anymore?

You clearly cannot make an argument so resort to name calling.

I don't hate anyone, least of all the wealth creators and the rich - investing in this country, paying taxes and employing people is essential, we need to grow our economy, with well paid employment.

I just don't see why someone with earnings of £5m should only pay tax at 22% over 3 years, with investments in the USA, you clearly see that as a good thing and something to encourage.
The rest of us pay tax on higher earnings at 40 to 45%

Do i have a problem with hypocrisy from people like Sunak who say one thing but do another? yes.

Like the recent meeting with business leaders he and Hunt attended to drum up investment in Britain's struggling economy, be better off attending a business meeting to drum up investment in the USA,, at least that would be honest.

People have taken the time to explain really clearly the tax system, that he in fact paid more than 22% and all kinds of counter arguments that you’ve ignored, misunderstood or argued against with things that don’t make sense. Your position is hypocritical, based on misleading headlines and articles and with a complete disdain for high earners. Others here had valid points about the system, some of yours are silly and childish. That’s my opinion.

You don’t keep all your money in this country, nobody does, so you can’t criticise someone else for it either.