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.

Then do it. If it is cheaper for you (or the OP) to drop a day, do it.

The vast majority of those threatening to leave the country or go part time, won’t, because it doesn’t make sense financially or personally. And if tax changes make it the equation different, you can reevaluate.

A business saving money by renegotiating a 4 day week will either turn a bigger profit, so pay more corporation tax, or spend more to reduce its liability. The money keeps moving round the system - it’s not lost because you decide to reduce your hours.

Taxing businesses where their income is generated would close many of the loopholes that allow people to work wherever in the world their tax burden is lower.

There are also many other factors that affect where people make their homes - London is one of the great cities of the world not just because of its wealth. People want to live here because of culture, history, proximity to Europe, language etc etc. Young people often head to Australia or America to work, but I know very few of my peers who haven’t returned to be closer to ailing parents or because they found places less appealing than the UK.

This all may change thanks to the catastrophe that is Brexit, of course.

Yes of course. There is no issue, not at all.
All great, let's continue "taxing the rich", everything's great

That’s odd because the IFS and OBR both say they didn’t. And Hunt’s being called in to answer questions about his irresponsibility.

Wrong. UK already has serious labour shortages in the higher tax brackets. So no, there aren’t plenty of others to fill the vacuum, the gaps already exist before they are all encouraged to leave by labour policy.

And? As I’ve pointed out elsewhere, someone keeping their earnings below £100k to pay less tax / retain certain benefits doesn’t mean that money is lost to the system.

Their company will take the wages saved and use them to expand, employing someone else. Or perhaps give larger (taxable) bonuses. Or turn a bigger profit and pay more corporation tax (I admit that’s not likely).

The money those people are paying to their accountants to reduce their liability is in the system.

If companies can’t find the people to fill roles, they will cast a wider net or reorganise to allow for training. It’s absolutely absurd to think that the vast majority of high earners are so exceptional they couldn’t be replaced if they decide to piss off abroad.

https://www.bbc.co.uk/news/articles/cx2npgpz048o

Again you are being incredibly naive possibly because you don’t see the impact first hand.

I already explained that my boss who is not a UK citizen but is based here and earns £1m pa mainly through PAYE has already confirmed their departure to a more favourable jurisdiction. You need 100 workers on average salary to make up the tax for that one single loss of an employee. There is no compensatory gain for the UK.

The UK is now becoming very unattractive for higher earners so it is inevitable that those with more tenuous ties will turn their backs on it. My boss said she felt the UK was hostile towards higher paid workers and didn’t want to operate in that environment. She is not alone with those thoughts.

As for part time the compensatory taxes you refer to don’t add up. If someone earns less to avoid 60%+ tax rates then even if every penny saved by the company filtered through to the bottom line the total tax paid would be way less than had the employee continued FT.

However you look at it we already had a tax structure that did incentivises many higher earners to work more. Labour appear about to make the situation a whole lot worse.

You tried to pretend that millionaires were leaving in "droves" but your link to prove this, said something completely different.

"Taxing the Rich" ? thats been ruled out by Labour.

Any changes have yet to be announced, you re just another scaremongerer.

Erm…they can’t be replaced that’s the issue. They have skill sets that command that salary whether you like it or not. Engineering, sciences, IT, cyber security, maths. The list goes on. All areas which are absolutely critical to the running of services and companies. NHS cyber hack damage anyone? The drs and nurses that people bang on about need all of these people. As does basic infrastructure like energy and water.

Every post continues to highlight you don’t actually understand the issue.

However you look at it we already had a tax structure that did incentivises many higher earners to work more.

You’ve been saying exactly the opposite for as long as I can remember. Your whining about how much tax you pay is legendary. Now, seven weeks into a Labour government which has announced no tax changes, it’s all their fault.

I don’t deny there's a pipeline problem. Better planning, training and modelling of future trends would help here.

You're sickening

Well facts don’t lie - every other country we envy the public services of, taxes average earners more via direct taxation. They don’t tax higher earners more than we do. In fact we have some of the highest higher earners taxes across the board.

so you can all be reassured the tories led the field in taxing higher earners since 2010.

I don't see how Labour can claim they didn't know about the asylum overspend though;

02 February, 2024
Yvette Cooper responds to the Home Office's £2.6 billion overspend

“Their failure to clear the asylum backlog, end the use of hotels for asylum seekers stuck in their broken asylum system or sort out proper contracts has left them with an eyewatering £2.6 billion blackhole that the British taxpayer will need to fill.

https://policymogul.com/key-updates/34369/yvette-cooper-responds-to-the-home-office-s-2-6-billion-overspend

How can any European country compete with a zero tax regime?

You were telling us all that you have Stock Awards earlier, why isn't your boss reducing her tax burden in such away?

It was a predictive text typo!

It is supposed to say “disincentivise” not “did incentivise”.

Exactly @Clavinova and we have both sides yelling populism when the budget overspend on asylum is 3 years old. We need smarter politics.

Also, Paul Johnson (IFS) doesn't appear to have mentioned that a big chunk of asylum costs in the UK are being funded from the overseas aid budget (not the Home Office budget) - Labour knew this as well;

https://www.dailymail.co.uk/news/article-13478487/Keir-Starmer-vows-foreign-aid-budget-NOT-used-pay-housing-asylum-seekers-hotels.html

14% of UK children live in a household where neither parent works. Given how much that costs the economy in real terms plus negative outcomes that we all also have to pay for. Far more sickening.

https://www.sciencedirect.com/science/article/pii/S1570677X23000229

It’s not about competing with a zero tax regime as that’s impossible, it is about competing with other local European jurisdictions which we fail to do miserably.

My boss already receives stock options but impossible to reduce the cash element of the package to levels where the impact is competitive with other jurisdictions.

As with all these things it isn’t one single factor that causes people to move. It is a cumulative effect of several. VAT on private school fees also goes down like a lead balloon with many. While I doubt my boss has any issue with affording the fees or indeed VAT on top, I know that she doesn’t like the idea of her DC attending schools that government ministers have stated they would like to see closed down.

We should welcome big net contributors but it seems as if the current government are going to accelerate their removal. It’s crazy.

But there is a structure that allows your boss to work abroad whilst (I’m presuming here) generating income for the company in the UK. That is part of what I think should change. Companies should be taxed - and here I’m including the taxes associated with employment, not just corporation liabilities - in the country their income is generated.

Close the loophole that allows people to work abroad on UK based projects.

Now assuming that you are in a large multinational company where work spans many countries within single projects, things are trickier - but not impossible.

I don’t agree that the numbers don’t add up. At a simple level, of course the 60% rate wouldn’t match the corporation tax rates, but it isn’t that simplistic, is it? The company is much more likely to use the money saved against reduced hours to expand, with all the associated wealth - and tax - generation.

Plus, of course, we aren’t talking about 7 figure earners here - we are talking about those hovering around the 6 figure mark. The OP thinks she may as well work fewer hours, as she’ll be better off - seems like a no brainer to me.

Spot on. This is factually correct yet somehow we have created a situation whereby the majority appear to believe the complete opposite to be true.

I'm suggesting that people should be encouraged to make sensible financial choices for their families. Like having a job before having a baby. Only the mind of the extremely entitled would think you deserve to have your entire lifestyle funded by the state via people who do actually work. 14% of all families have both parents unemployed. That's a shocking statistic and unsustainable.

That’s because so many people are state dependents so they feel entitled to everyone else’s money. They don’t understand the so called Scandi model they refer to. Every other country expects people to work to their full capacity. Universal benefits like childcare - not snatching things away from those who bank roll the rest. Everyone is expected to contribute. Not the tiny minority 60% of their salary.