To be surprised by the difference in take home pay between 38k and 48k?

[0rangeCrush]

Recently I have looked into reducing my work hours by 0.2 FTE. This would knock £10k off my salary, but only £400ish off my take home pay per month.
This money would be saved through childcare costs anyway so I’d be no worse off for at least 5 more years.

Calm doon hen. Mumsnet isn’t just for the English.

But you need to pay these higher taxes so that the Scottish Government can fund all the 'free university places' that you won't be able to take advantage of because you don't live in a deprived area.

Jeeze. The world doesn’t revolve around England. A few other nations on the island

I've always supported this - despite having two incomes of ~50k in my household, so taking a maximum hit.

It has always seemed right that working people on very low incomes get lifted up, at the expense of people who can afford it. I appreciate the advantages of living in Scotland - e.g. free eye tests, prescriptions, NHS dentist, etc, and so initially it felt like a fair balance.

It does feel like the balance has moved though, and not enough people are benefitting, compared to the people who are worse off.

And I think it has had unintended consequences. E.g. how many people in the quoted bracket getting a pay rise decide to just salary sacrifice the extra % into pension instead, as it would barely be noticeable in their pay? And I also work 0.8, as its just not worth increasing it.

I've just not seen the evidence that the extra I am paying is actually helping anyone.

Calm down. No one said that.

I have simply explained why some posters have assumed. I made no assumptions so direct your ire elsewhere.

“You should maybe try Scotsnet”

🙄

Interesting! I'm not Scotland so slightly different. I was on 3 days then went up to 4 and was disappointed in the increase. Have just gone back up to 5 so waiting to see how much more I get for that day! I say a day I'm now doing 5 in 4 because I was effectively doing the same hours when I was on 4 so felt frustrated at carrying the extra work without pay.

Also, I'd have thought it'd be obvious that there were going to be student loan contributions? We've got a low percentage of take home pay on the 5th day, from someone young enough to have childcare aged DC and with a higher than median salary. It wasn't a big leap!

Yes when looking at going PT I was advised that 4 really means 5 days work squeezed into 4! But having used up A/L by temporarily doing 4 day weeks once I found that having a whole day to myself was still so much better.

@WickerMam It's not the taxpayer that should be 'lifting up' those on lower wages. FT jobs should pay everyone enough to live on including childcare etc.
I can't say I blame people choosing to work less and go on UC when it would cost them to work. Yes, there's career progression, pensions etc but it's when DC are young and many people don't have 'careers' anyway to have lost any progress.

Not everyone can be high-flyers. Where would we be without people doing the ordinary jobs?

For me, and I'm on the left, it's about fiscal drag and the fundamental dishonesty of not being clear about what failure to raise income tax thresholds means. If we're to have societies where lots more people are going to pay 40% income tax as a matter of policy, governments should be clear about that. Make the case and be prepared to defend it, rather than trying to sneak it in via the back door.

The average Scottish resident receives approximately £2k more state funding than a resident of England so this sounds about right that the taxes paid now reflect this. It's be more than £2k additional state funding now because of inflation (this report is from 2021):

www.instituteforgovernment.org.uk/sites/default/files/publications/funding-devolution-barnett-formula.pdf

English taxpayers have been subsidising all of the other nations. Barnett formula needs scrapping, it's indefensible.

OP it makes total sense to cut your hours. This is what has been happening for years now with the cliff-edges in England at £50k and £100k. If you have children in childcare the marginal tax rate after £100k can be well over 100% so tens of thousands of people are doing the same as you. Obviously people won't work more to be worse off! But apparently this is obvious to everyone except our Governments... The UK Chancellor commissioned independent research to find out why UK productivity is so dire and one of its main conclusions was that the tax system makes it not worthwhile for people to work full time. If they want to fix it they need to scrap the withdrawal of child benefit and the withdrawal of the personal allowance (not sure if you have these ridiculous systems in Scotland too, that actually cost more than they raise in tax?), make childcare funding universal again not withdraw it at an arbitrary threshold, and also significantly lower the universal credit taper rate (the same thing is happening in lower paid jobs because of this: the marginal increase in income from working more is low because of the high taper). And significantly raise the tax thresholds which are too low in all of the UK countries. Sadly Ministers say they want growth and rising living standards but are too stupid to take these obvious steps even though economists have set the evidence out to them in a number of independent reports.

If tax thresholds had been uprated with inflation over the last few decades then the 40% rate would start at around £90k earnings. It's the withdrawals creating sudden cliff edges doing the most damage, though as people simply won't work any more hours once their tax hits these thresholds.

Also, I was part-time (0.6) pre pay rise and on a salary of £25k, which meant I got UC to help pay childcare costs (no other help other than with childcare costs)

Then I got a pay rise (which I lost hundreds of pounds in strike pay to get) which brought me above the UC threshold, so I had to pay childcare costs (which was fair enough) but also brought me above the student loan pay threshold and into the higher pension bracket, so I had to work two additional days (IE go full time) in order to break even.

So I was no worse off on £25k than I was on £48k. Which is … mental, to be frank. I had exactly the same amount after childcare costs.

I'm not surprised at that.
I played around with a couple of benefits calculators and came out with a similar result...

@0rangeCrush that's good to look after your pension x

It is mental. Then there is the enormous difference between how one and two parent households are taxed. In England a single parent with two children using childcare has to earn more than £150k to get the same net household income after tax and childcare that a couple both earning a median full time salary receive, i.e. they have to earn more than double the amount the two people are earning combined to reach the same outcome for the household. The UK tax system is beyond ridiculous and any Chancellor with half a brain would reform all of these perverse incentives on day one in office and can't be taken seriously on any claim to want to improve the economy or living standards until they do so. Sadly, brains are in short supply, it seems!

I definitely think they should consider household income rather than individual income for tax purposes. It would also maybe incentivise more fathers to take a more active parenting role by dropping their hours too? Maybe that’s just specific to my own circumstances though.

So…. If we are Scottish we should stick to one wee forum? Away bile yer heid hen

It’s absolutely crazy!

I am Scottish. Note the quotation marks.

Aaarrgghh… completely misread your sarcasm . Sorry !

“This is the internet, not England”

😂

Nuts isn’t it. Pandemic really brought home to us that we were no worse off working much fewer hours. Our drop in income didn’t have a huge effect on our take home pay and the relatively small decrease could be weighed against the quality of life that came with more free time. Not surprisingly lots of other people found the same and the govt got all panicky trying to get people back to work. No thanks! Our business is smaller but our overheads reduced and we don’t bother battling with Brexit and overseas orders anymore. Small thinking by the government which now faces reduced tax income as a result of making working too expensive and complicated.

Oh well, who needs taxpayers in Scotland. It’s more important to make sure that male rapists get to rape freely in women’s prisons. If UK is in trouble, Scotland is a dumpster fire.

This is the most accurate description of MN I have ever read.

Not exactly the point because OP has done the sums, but anyone in Scotland on £48k paying 10% pension will only be taxed as if they are earning £43,200.

That’s below the £43,662 threshold for higher tax rates.

OP is not a higher rate tax payer, if she's paying 10% pension contributions, despite some of the claims above.