There’s NO point earning over £50k?!

[ThisReallyDoesntAddUp]

Because of the £50k child benefit limit and 40% tax rate!

So I earn £78,000 pro rata overall now with my job following a mid year pay rise. This includes bonus and car allowance. I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus.

Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!

I’m now on mat leave for baby number 3. AIBU to make sure when I go back I remain under the £50k mark by reducing hours even further?! I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week.

Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!! I may as well work less hours, keep the child benefit and pay less in childcare!

Not all low earners receive benefits, people who are single with no children seem to be forgotten about when it's discussed

Sunak's salary is £167,391 which he would have paid 'normal' PAYE income /PAYE taxes ( IE say 45 percent on) .. the rest of his income ( £millions) was related to his assets, so only had to pay capital gains tax of 28%

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=ukandeu.ac.uk/what-sunaks-tax-return-tells-us-about-the-uk-tax-system/&ved=2ahUKEwiH6PmIztaEAxWnVkEAHcWQCKcQFnoECBwQAQ&usg=AOvVaw0J1Rbaq2eLXvhA8jyplLqM

I do hope he doesn’t see this thread… 52% of Mumsnet think I’m being unreasonable 😆

I have, hence the “contributions to national services” part of my comment.

Paying in to a system for the benefit of wider society should be a source of pride that you are making a positive contribution to your community.

There was one the other day where it was 52/48 the other way.

But this is definitely becoming more of a live issue. It's inflation and fiscal drag. I think these discussions would've been further from 50/50 than they are now, even a year ago. There are more people either affected by these bottlenecks themselves, or who understand the potential for them to worsen services and reduce tax take. The 50-60k trap could be the reason your NHS dentist doesn't do another shift, that you can't get a tradesman, that you can't manage to fill a role at work.

I earn over 100k and once received a 20k bonus that actually left me worse off than had I not received it.

The cliff edge tax rates are insane.

That simply isn’t true. Regressive taxes like VAT and council tax take up a much higher proportion of lower paid workers’ income. Not using state education and NHS healthcare is a choice, whatever your income. The services are available for your use.

It worked out better for me to work on day in the week (Saturday) and I would have earned the same as a manger role due to student loads and childcare. Life your life. We don't live to work. You can't take that money with you. You've worked hard, enjoy some time for you and the kids. Your career will be waiting for you when you're ready

Don’t worry, I’m well aware. My husband works for just over minimum wage and he works very hard.

I got lucky with the industry I went into as it’s generally well paid, but on the other hand I have had to work hard to get to the position I’m in.

It doesn’t change the point I’ve raised with my OP 🤷‍♀️

👏👏👏👏 ☝️ this.

@Scarletttulips one of my Dfriends told me this too that she won’t work anymore than 16 hours a week as then it will affect her benefits. She said she couldn’t believe how much she got once she had split up from her husband, free school meals, uniform grants, money in the holidays for lunches, carpets she was actually better off than when they were together. It show how messed up this country is wages wise. Work should always pay more (not than benefits should be nothing either)

I am currently in this trap

For every £1000 between £50k and £60k I oay

40% tax
2.5%NI
8.5% pension
29% child benefit tax repayment

meaning for every £1000 I earn, I see £200 of it. I don't have student loan repayments or it would be even less.

I will see the pension eventually. I have sacrificed some into my pension to try and reduce the child benefit.

80% marginal rate feels really really high

Some people are so fucking blinkered. Being bitter about someone earning £60k or £70k or even £100k+ who is unhappy about their unfair tax burden, whilst the real enemy is our PM and his ilk, grabbing millions of pounds of public money for dodgy contracts for mates and enjoying extremely low taxes. And big businesses, paying peanuts and having the taxpayer subsidise their labour costs via benefits. This is exactly what they want, all of us fighting over the relative scraps and looking the other way while they run public services into the ground and screw us all over.

It’s not 80% marginal rate. Loss of benefits isn’t a tax and pension contributions are like paying into a savings account.

Couldn’t agree more @Fargo79.

Agree. Also the tax paid by higher earners goes to fund benefits and tax credits for lower earners.

Until the rules changed I put £40k into my pension every year which saved me 18k in tax.

I did however also pay around £80k income tax every year.

The suggestion that people like me are in some way acting in an unethical manner is disgusting. Without people like me paying such huge tax bills the country would be bankrupt. It is also worth noting that we won’t ever be claiming any pension related benefits as a result of this.

My lifetime income tax bill will likely be over £2m. I think a bit of pension tax relief isn’t too much to ask for in return.

If you’ve been put up to 70k surely you’ll have to pay back ALL of the child benefits?

“Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!”

The child benefit thing is crap yes.

extra tax - it’s fair. That’s life.

£800 student loan you really can’t complain about because you are still £800 better off by being £800 less in debt.

Yep - same here.

We get shares as part of our package at work. It's meant in worse off as a result as I'm in this shitty £100-125 bracket where the cliff edge hangs. I can't simply put it all in pension to stay under £100k now either due to various reasons.

I've lost entitlement to 30 funded hours too so it's really hit.

Even if you take off the pension, which I will see, the repayment of the child benefit is a true reduction in income. Marginal rate of over 70%

It may be a reduction in income, it’s still not a tax.

It’s not about me (or anyone else) wanting what OP earns, it is about OP’s dissatisfaction with it.

OP’s taxes don’t solely fund the luxurious lifestyles of lazy uneducated poor people.

Taxes paid will fund the hospital their children were born in, the schools they attend. The roads they drive to work ok and the fire service that will rescue them in an emergency.

At £50k you might feel that you pay ‘a lot’ of tax, but you get a lot more value out of the system over your life time.

OP’s view that it isn’t “worth” earning over £50k is ridiculous. Even accounting for paying more tax they still have a decent income. Not to mention the healthy pension pot and the career prospects, and all of the things that are just a little easier when you have a bit of money.

You can work hard and earn good money without being entirely oblivious to the fact that doing so gives you certain advantages in life. You can also work hard, and earn good money without believing that everyone paid less than you is either lazy or stupid.

That’s the precise situation that we stumbled on and is why the entire £20k was lost.

Either work harder or say thank you to those that do and manage to pay more in tax than you earn. That’s not a very nice thing for me to say but it’s about as nice as your post.

just stay home, have more kids, claim benefits, feel proud of yourself