To think high marginal tax rates should of been the priority

[Pip47]

Does anyone else feel that it would have been much fairer and a better boost to productivity if the lower threshold had been increased, even slightly. In addition the astronomical marginal rates of tax those with children and or student loans end up paying when they go over 50k. Who can really get excited about a 2% NI cut but no doubt will cost the country billions

Rumour is they're saving this announcement for the spring right ahead of the election when politically it'll matter most. Delaying it also adds enormous extra revenue to the treasury.

The income tax bands have been too low for years although less noticed when interest rates were low. Can’t see much changing as where else will the funds come from

I agree. At all levels where they apply, which includes some people on very low incomes too.

Putting up thresholds benefits everyone, even high earners.
Reducing NI from 12% to 10% benefits those on modest incomes, because high earners pay at a much lower rate.

in other words, cutting a non-progressive tax is fairer than cutting a progressive one. And has the added benefit that it won’t benefit pensioners.

£100 a month between me and the wife. With a baby on the way in March this is huge for us.
That said, I'm furious about it, we are not in a position to be cutting revenue. This isn't about me and how it'll make my life easier, it is about the Country and it simply isn't for the best.

Also, forgive me if I have no sympathy for those earning above £50k. I appreciate it isn't all that much in some areas but some people but that's almost as much as we earn between us so, ya know, I'm not fussed about "the rich" as I would label them.

Putting up thresholds benefits everyone, even high earners.

Except us in Scotland.

I think the nil rate band withdrawal and the child benefit charge is UaK legislation so if this is sorted out in spring this would benefit Scotland too.

Whilst someone on 50k might be earning a salary that you and your partner earn between you, they aren't taking home the same amount. You and your partner each get a personal tax allowance that a single parent only gets one of, you and your partner could both increase your earnings without losing child benefit but a single parent starts losing that as soon as they're over the 50k.

Also, forgive me if I have no sympathy for those earning above £50k. I appreciate it isn't all that much in some areas but some people but that's almost as much as we earn between us so, ya know, I'm not fussed about "the rich" as I would label them.

Earning 50k doesn’t mean someone is rich 🙄

I dont earn enough to pay NI in my three part time jobs. So I don’t benefit at all

It doesn't really matter, the UK will be bankrupt within 5-10 years no matter who is in control.

As the OBR said recently:
In 2023-24, we expect a deficit of £131.6 billion or 5.1 per cent of national income.

We are so screwed.

It means you're earning more than most people. Once you get up to £60k, you're in the top 10%.

Worth stressing that the bottleneck at 50k is just one of many in our system, some of which kick in at much lower income.

I don't get a personal allowance, both DC are in school now so the childcare element doesn't impact me and no student loans, so I'm quite happy with my 2% NI cut. Getting rid of removing the personal tax free allowance above £125k would have a huge impact on high earners, but would be very unpopular politically, so can't see it happening anytime soon. I do agree that thresholds around childcare and CB need looking at though, there are so many people trying to keep their income just below £100k through switching to PT and/or pension contributions.

We will be about £125 a month better off as both high earners. In all honesty I would prefer the £125 went to a lower earning family who needs it more than we do in this environment and I say that as someone who previously voted conservative.

I would rather they addressed the over £100k loss of personal allowance/benefits as currently I have no incentive to take a promotion as we’d actually be worse off. If they removed this then I’d pay more tax overall but still take home more!

I agree OP. So many people think that people on £50k are ‘rich’ when the tax and benefits system mean that in fact there can be surprisingly little difference in their pay than someone on minimum wage if they have kids.

The current tinkering of thresholds has a situation where the incentives to work more are distorted by arbitrary thresholds. And then the government wonder why growth is low.

I think they are doomed regardless of whether they pull rabbits out of hats on marginal tax rates in Spring or not.

The higher income child benefit charge is simply manifestly unfair for a range of people who have more unequal income distribution between parents. You start paying the charge at £50k taxable income for the individual but that applies for each parent so you can each earn £49k and be exempt but if you are the sole earner on over £50k the government claws back the child benefit on a sliding scale up to £60k.

Oh yeah, the Tories are fucked now whatever they do. Solving a problem they themselves created wrt child benefit isn't going to save them!

If you and your wife earn 50k between you, you’ll between you be paying much less tax (and student loan repayments)than a single parent on 50k who to boot loses her child benefit which you get to keep, in addition to having 2 of you to share the childcare between you both

Absolutely, I’ve been on both sides and their really isn’t a huge amount of difference in disposable income between being entitled to top ups, 85% childcare costs and minimal tax/NI/SLC and being just over the threshold. At up to 80% marginal tax rates there is absolutely no incentive for any parent with several children and SLC payments to take any overtime or promotions etc to increase their income above the 50k mark and yet these is often the skilled work the country needs more of. Getting rid of these marginal pinch points would pay for itself. On the other hand if you’re earning 12k but the lower threshold would be increased to 15k then this is a huge benefit and incentive too to the lower paid.

Should HAVE been, not should OF been.

Exactly, it’s that unfairness about it that frustrates me and no recognition for the impact it’s having on productivity. It is all very counterproductive

Aww I’d edit it for your OCD but it won’t let me, sorry 🤷🏻‍♀️

But you're already benefitting from a quirk in the system that means you don't pay NI so take home more money than you would if you had one full time job that paid the same as your three PT jobs.

Do you receive CB for DC under 12 or otherwise voluntarily pay NI credits so you don't miss out on your state pension?

Everyone gets a personal tax allowance!! It isn't cash in your hand, it is the amount you can earn before you pay income tax.