October budget going to be painful

[increasinglyconcerned]

Here we go..... I knew it. Labour were promising not to hike our taxes in the election campaign and here we are.... apparently they discovered £22 billion black hole in his first weeks in the role and it's not his fault.

Let me guess, those of us who earn six figures and already pay 45% will pay EVEN more and take home even less. It's the hard workers who will take the brunt. What's the point in working anymore!

I earn a little over £120k and I'm taxed the same as those earrings £500k.

Before people jump in saying they don't feel sorry for me, I work full time to support my family, as of January I will have 2 DCs in nursery, plus my mortgage and get ZERO free hours childcare, whilst they keep promising free childcare but I just pay more for everyone else to benefit.

I cannot afford to pay more taxes to fix this country and especially when so many people are getting a free ride and not paying their way, ranging from millionaires with tax havens to those claiming benefits dishonestly.

The Conservatives bled the country dry whilst giving massive handouts and leg ups to their cronies. Now we are paying for it. It's naive to think that can be done without tax rises.

Op has already explained that she didn't mean people on a lesser salary don't work as hard. Why are people still complaining about that?

Why is it unfair that she's on the same tax rate?

She's not paying the same amount of money, only the same proportion of earnings after a certain amount.

In reality, OP pays a hell of a lot less tax than someone on £500k.

OP I think that once you have the potential to earn above average, you have to be mindful about taking promotion. Work smarter not harder, look into increased pension contributions, reducing hours, so you do not hit the next tax bracket. Or work at the higher level. Get all your bills paid off e.g. nursery, mortgage, savings and plan for an early retirement, so you can enjoy your hard labour in the early years of working.

It's been widely reported in the broadsheets that Labour's strategy for raising taxes in October is to prime the populace in advance with tales of this 'previously unknown black hole of £22 billion' and to do it while the Cons are in the process of electing a new leader, so they don't really currently have a proper opposition to question them (plus, August is parliamentary recess and most people are on holiday). The bottom line is that their promise to raise public sector workers pay by 5% is responsible for a huge chunk of that and it's nothing to do with the situation they inherited from the Cons. So the OP and anyone on anything more than minimum wage are right to be nervous.

@increasinglyconcerned

after all, you can only tax people who work.

Not true at all. Lots of people don't "work", i.e. pensioners, buy to let investors, passive investors, etc. At the moment they escape paying NIC because NIC is only on wages. Yet there are pensioners, investors and landlords earning more than the average worker is earning, some earning very high amounts.

They're ripe for being taxed more and any tax changes should target those with the highest incomes/gains, not workers.

At the very least, bring all forms of income/gains to be taxed at the same rates and with the same bandings etc as workers.

So your investor who makes a million from selling some investors pays exactly the same tax on the capital gain as worker would if they'd earned wages of a million. Same applies to pensioners with high gold plated pensions, landlords with multiple properties, people with millions invested in shares or other investments, etc etc.

I've already corrected above that those earning less DO work hard. They take the brunt too, so my point stands, after all, you can only tax people who work.

That said, depending on earnings, most somehow will not be in line of sight to pay even more.

There seems to be a blanket rule that those earning over six figures will fix the problem. Charge them more... and that's my point.

I agree OP. Absurd and deeply unfair that they choose to tax high earners instead of dealing with the oligarchs, criminals and money launderers who are the real issue here.

@cosyleafcafe because I believe the increases in the tax rate should be staggered more slowly, so therefore I feel it's unfair. The cut off points are too black n white for my liking. Not that I've ever been on a higher tax rate.

Lots of people who don’t work are taxed …..like millions

Maybe they would be better look at unearned wealth. As I understand high earners play a fair amount of tax.

Yeah, for sure. There is a minority of people who will decide that they prefer the balance of both working and earning less and will go part time or quit their jobs for lower paying roles.

You’re delusional if you think this will be widespread, however. The majority of those, like OP, who moan about there being no point in working and suggest they would be better off quitting their lucrative jobs for less well paid roles have no intention of ever actually doing this because despite their woe-is-me protestations they know fine well that they’re significantly better off continuing to work and enjoying the financial security of their fat salaries, even if they are forced against their will to contribute to society.

Whilst that's the right advice from a tax point of view. It's terrible advice for the country and the economy. And that's why things need changing. We need such people to work those extra hours, to take those promotions, etc., but the tax/benefits system works against it by almost forcing people to stay part time and not take promotions. It's nonsensical. If Labour genuinely want to grow the economy, they need to tackle these stupid thresholds and tax/benefit rules so that work always pays and it's always better to work more, take promotions, etc and not be scared of being barely better off or even worse off.

Yeah it's going to be a tough one for sure. I do think if higher earners like the OP are paying a lot of tax to help fund things like tax free childcare / funded hours then they should be able to benefit too.

Yes that’s exactly what we need. People choosing to earn less and pay less tax, all whilst our birth rate sinks through the floor.

Who’s going to pay for the NHS, roads and schools then?

How much is that subject to being mobile and comparative tax rates? Ie if you can just shift outside UK, does it drive down investment?

I hear you OP. My husband is self employed and earns over 100k so we don't get any help with childcare, despite my earnings being pathetic. We have a large mortgage and bills despite having a normal 3 bed semi as we both have to be in London for work. So while we're ok, we certainly arent affluent and have no employee benefits or pension to falll back on. So reforming the higher rate pension will hit us hard.

I own a flat from before my marriage which I want to sell. So I'll get clobbered with CGT for merely being married. No doubt she'll whack up CGT so the profit will be even smaller (it's a small 2 bed in the north before I get jumped on, it really won't net me that much anyway) That's my pension, pathetic as it is. I worked my bollocks off for it and the idea that so much is going to be taken off in tax, just because I chose to get married makes me sick.

Have you not seen the shortages of doctors and dentists, seemingly most of whom no longer work full time because they want to avoid breaching the £100k limit and avoid the punitive pension tax charges?

The last government had to change the pension tax laws for doctors to try to mitigate the problem caused by the lifetime allowance caps on pension scheme values, which massively impacted on doctors.

It's certainly not a "minority". Look on forums like this. The general advice when someone is on over £100k is to increase pension contributions or go part time to get their wages back under £100k.

It IS widespread!

Starmer likes to think of himself as The Warrior of the People but he needs to tread carefully. It’s never a good idea to piss off an already squeezed middle. And it’s all very noble, all this opening of the gate to all and sundry but honestly, where the fuck does he think he’s going to get the money from for all his promises?

It can’t all come from increased taxation for earners in a certain income bracket.

Becauase of course people on a third of what you earn have no housing costs, no childcare costs, do not have to pay income tax (which is not going to be increased) and don't need to eat and keep warm. How come there is this massive black hole, who is responsible? Oh yes, the new govt that has been in power for 55 days. I am wondering if the Tories are secretly relieved they lost, there is nothing left to rob and there is one hell of a mess to sort out.

This is disgusting!

The entitlement in this country is through the roof! So many people think that those that earn more or have more must subsidise them. They have a very short memories and forget that such an obligation is a relatively new concept and one that can be removed as quickly as it was implemented.

No wonder we have such terrible economic growth (the one thing we truly need to alleviate poverty) when people like this exist, who literally want to stamp on ambition and have no recognition of the fact that the reason why OP 'choose' their roles is because they get financial benefit from taking on more hours, stress and responsibility. If you remove that incentive then we will all be fighting over the easier job roles (and yet they are easier) that pay less.

Any earnings over £125,140 are taxed at 45%.

Earnings from £50,271 to £125,140 are taxed at 40%.

If OP is earning just over £120k then she is not being taxed at 45%. She's being taxed at 40%.

So it's not even true that OP is being taxed at the same rate as someone on £500k (or if she is, it's on a very tiny amount of her salary).

I'm interested as to what cut off points you feel would be better, given the situation the country is in and the amount of debt we have.

If you tax very high earners at higher than 50% then they will simply leave the country and go elsewhere, so it's not really a solution to increase the rates a lot for the very highest.

Of course there are other ways to increase revenue that the government should look into and hopefully will - but talking purely about income tax, I'd be interested in what you think would be a better split.

You lost me when you said 'hard workers'.

People on min wage also work hard. 😡

You're making it sound like it's Labour's fault there's a black hole. Of course they need to fill it! They didn't make it though.

@cosyleafcafe I said I'm paying 45% tax. That is what I am paying.