To think that the tax system for lower earners is ridiculous...

[Startingagainandagain]

I was thinking about that this morning after the organisation I work for announced pay rises levels for this year.

I am disabled, work part-time because of it (so no choice) and don't claim any benefits.

My pay rise is 4.6 % which sounds great but equals to very little extra each month once tax/national insurance is taken out...I will be maybe £20 better off.

There are many people in the organisation who make less than I do (my salary is around 26.8K which for a part-time role is not bad and will go up with the pay rise)

Am I wrong in thinking that the tax burden should not be that high on people who bring that sort of salaries home?

It seems to me that the tax system is hammering the lower paid and brings a vicious circle of people then having to claim benefits, even if they have a job, to have any kind of decent life.

Do we think the next government should address this?

Well no, I think you’ve missed my point. I don’t think higher earners should get taxed even more.

Of course they are "realistic".

OP is talking about how the tax system is "ridiculous for lower income earners".

Everyone else in the thread understands.

I'm a higher tax earner and I'm stressed to absolute buggery.

The tax I pay would make your eyes water especially the corporation tax for my company. Bloody hell. Low earners do not have a monopoly on misery and stress.

The highest paid job I had was genuinely the least stressful. In the most stressful I ever had the job was absolute fine the stress was caused by being managed by a bully.

You can't generalise whether it's high or low pay jobs that's more stressful as there are so many factors that cause stress.

Some low paid jobs are very easy and low stress. They're also more likely to be of the 'you can forget about it when you leave work' variety, which is less common in higher paid jobs and one factor that can be very stressful.

Of course some high paid jobs are easy, but this often comes after many years of study, long hours, lack of autonomy etc. It will be a rare job that's highly paid and can be done without a significant period of working up to that job. Because if that was the case, more people would be able to and want to do that job, and employers wouldn't need to pay people so much, because they'd always find sufficient people willing to undercut others to do the job.

These threads always descend into low earners telling high earners that they should be grateful for their income and accept the high tax, while high earners point out that tax means that their impressive sounding income doesn't make them as rich as some might think.

The reality as I see it is that freezing thresholds has gradually sucked more and more people in the lower earning side of the scale into tax. Despite all the rhetoric from the government about making work pay- and you should always be better off in work than in welfare, we tax earnings well before we hit minimum full time wages and then top that up with NI.

Also, being capable of holding two thoughts in my head at the same time, a hospital consultant, who has studied at med school for 7 years, at least 10 years of training working all the hours god sends, passing brutal exams and financing study, moving across the country every couple of years might earn £110k if they do some extra clinics and some overtime. That will see them lose any childcare assistance funding, their personal allowance will reduce by £5,000 meaning they will pay nearly £38,000 in tax. Its a good salary and I doubt any of them will be visiting food banks any time soon, but surely when looking at things objectively, you can see why the current thresholds don't stick to the social contract and aren't really rewarding hard work and excellence.

But, you look on any thread about the NHS, education etc you will see endless posts critising the perceived lack of government funds. Sorry to paraphrase Thatcher, but there is no government money, only tax payer money, and it needs to come from somewhere. And as I said in an earlier post, most people, when it comes down to it, always feel that its the earnings bracket above them that deserves to be clobbered and not them.

How much do you think you should pay? On £27k, you’ll pay maybe £4k ish between tax and NI. Do you really think you should pay less than that?

Someone on £135k will pay £50k ish between tax and NI. So they earn 5 times your salary and pay 12.5 times the amount you do in tax and NI. Should they really pay more?

they will pay nearly £38,000 in tax.

£29k including NI actually.

'@Everanewbie
These threads always descend into low earners telling high earners that they should be grateful for their income and accept the high tax, while high earners point out that tax means that their impressive sounding income doesn't make them as rich as some might think.

The reality as I see it is that freezing thresholds has gradually sucked more and more people in the lower earning side of the scale into tax. Despite all the rhetoric from the government about making work pay- and you should always be better off in work than in welfare, we tax earnings well before we hit minimum full time wages and then top that up with NI. '

Thank you!

That really reflect how I am feeling.

It is a bit sad that the thread seems to have turned into low earners vs high earners rather than a discussion on whether the current tax system is fit for purpose.

I used to earn much more before my health really deteriorated and I am still a senior manager so I have nothing against higher earners and I have been in both positions (high salary and low salary).

But that means I also know that you are obviously in a much better position with a higher salary even if you pay more in tax...

Someone on £135k will pay £50k ish between tax and NI.

That is £38k on an NHS salary.

You’d think high earners would know some pedantic people are going to check their figures and stop inflating them.

Sorry? Someone on £135k will pay £50k ish between tax and NI. 🤷🏻‍♀️

I included NI and assumed no student loan or pension contribution. Real world is likely to be slightly lower due to salary sacrifice pension scheme and so on.

Not if they work in the NHS - which was the original premise - because their 13.5% pension contributions aren’t subject to tax.

Including 13.5% pension contribution. Including NI we're at c. £49,000.

Who brought the NHS into it? OP is talking about the tax system in general, as I am. I replied to the OP.

@LightsOnSparklingTowers I think its my fault using the example of an NHS consultant. I used this as an example due to the long and difficult road to that position and salary as I feel it deserves a greater "take-home" given the cost of living these days, and used the salary calculator to illustrate the tax payable.

Ah, ok thanks. Maybe @BIossomtoes if getting us mixed up then.

@MrsTerryPratchett that’s why I said potentially more stressful - of course there’s an element of stress to any job but I think there are different types of stress.

E.g. a doctor has the stress that if they make a mistake they could kill someone, someone working in a hedge fund could make a mistake that looses millions of pounds. I’m a PA and it can be stressful but a mistake I make doesn’t have the same implications.

@Netball01 I had the same thought and even started typing it, but then thought about care jobs, nursery workers, security, there are some really nasty implications of them messing up! I do think care jobs are underpaid, especially as I see how amazing the staff are at my child's nursery. But yeah in general, lower paid jobs have a clock off, while top jobs never really have that, rightly or wrongly.

Its the demand for the skill that prices the work. There are only a very select few that can qualify as a brain surgeon, to be intelligent enough, robust enough, hard working enough to stay the course. And we need their skill, so the price is high - artificially low in this country due to our NHS health system - but still high. This might rub a few up the wrong way, but hundreds of thousands have the ability to work a checkout, pull pints and clean, that is why the price is low, and, again, sorry if this offends, but artificially high due to minimum wage laws (although I don't disagree with NMW).