Anyone else lost a bit of ambition now they’ve been taxed to the brink?

[Peasontoastt]

I used to be extremely ambitious and was really eager to reach some sort of financial security. As a consequence, I’m in what’s considered a highly paid career, I work hard and it took me many years to train.

Just as I paid off my student loan (which took many years), I then had a baby and returned to work to be stuck with the childcare dilemma. I struggled through that phase and have come out the other side but being taxed so much, no child benefit, still paying for nursery even though dd has ‘free’ hours now. It’s likely that savings are going to be bashed next, so what’s the point in even putting anything aside when there’s likely going to be a 4K cap on ISAs.

I used to feel so ambitious and of course I know money isn’t everything, not by a long shot. But having worked my way up the ladder and with huge responsibilities only to feel penalised financially for doing so…what is the point? Yes I have more financial security than someone claiming benefits but equally, I am not being flippant when I say a few years of resting and being at home and being frugal is starting to seem so much more attractive. Has anyone else started feeling this way? I feel taken the piss out of by every financial angle!

I do, by regularly raising my earnings and not finding ways to push them back down.

Well that is incredibly noble of you, however, surely you can see why others might be frustrated at a system that takes more than half their earning, and question whether the output is worth the input?

Lots of us want to pay as little tax as we can. You do you. We'll do what we want.

Honestly - not particularly.

There are a lot of vulnerable people in this country. Elderly, disabled, otherwise in extreme financial difficulty, and whilst I’m aware that’s where the bulk of my tax goes - I’m not in any way bothered.

I don’t mind propping up others, or contributing to a low earning single mother’s childcare, or paying into a fund that entitles my stepson to DLA and my in laws to winter fuel payments.

That’s how society works, the better off support the worse off, and I’m good with that.

You don't need to patronise me with this spiel. The debate is not whether taxation should be used to provide for those who cannot provide for themselves, but to what extent does the extent fragment the social contract.

I am happy to pay a proportion of my income to fund the things you mention, but there is a point, and where that point is is up for debate, that you say, woah, whats the point?

Very good illustration. Also the tax free childcare is another £2k annually at £99k.

Ive not worked anywhere where salary sacrifice hasn’t been a thing, and I reckon an awful lot of people use it to bring their gross earnings just under £100k. It would be so good if we could capture all of that revenue now, rather than when they retire

I think it only fragments the social contract if people reach a point where they’re bitter about being the “giver,” and want to keep more for themselves.

Which to reiterate, I don’t believe we should. Paying more in is part and parcel with having more available to you. Selfishness and success don’t have to go hand in hand.

How high would you go with taxes? What proportion of income could be taxed before you thought that’s a bit much

I feel sorry for them but my responsibility is to myself and to my family. DH & I work to provide for ourselves and our kids. We don't work to help every Tom, Dick and Harry.

Everyone has their own personal "tipping point". I see it regularly with my clients. Eg last year when Reeves changed IHT, I got a load of clients who'd previously accepted paying a relatively modest amount of IHT, but when her changes meant they're were paying 6 figures of IHT instead of 5 figures, they wanted to take actions, and most ended up paying nothing, hence why badly thought out tax rises often mean lower tax take!

And if you are young and high earning you are often living in a high rent / house price area (eg London) as that’s where the high paying jobs are. Unless their are being funded by a whacking great inheritance lots of people cannot afford to take a promotion when it results in a £700 drop in income. Thru can’t afford it.

Yes they do. Some on mn will be ok with higher taxes but overall politicians need to get policies that increase tax take not just taxes.

That means being realistic about behaviour. Which Labour don’t seem to consider.

Reminds me a conversation I had with my hairdresser a few years ago.

She was saying she'd be fine with extra taxation and would be happy to pay a fiver extra per month to get the same day NHS appointment, next week MRI etc. She jolly ignored the point that it would be a fiver for her on her declared income but an extra 1k or more for me. And then those NHS funds would still be diverted to "deprived areas" like what Labour do now.
As other PP say, there is a tipping point after which people change their behaviour drastically.

Thank you for illustrating this so clearly @Everanewbie

So get rid of the unfair cliff edge seems the right thing to do. And also reinstate personal allowance for these top earners. But get rid of salary sacrifice schemes and reduce pension contribution benefits. I also think that there should be subsidised childcare for everyone who wants it, but I would reduce and get rid of the cliff edge for being eligible for child benefit.

I don’t even look at my deductions. I know they’re 4 figures

Given that you don't earn 100k and your deductions are 4 figures you earn less than 48k pa max (this is when you'd pay £9900 of income tax and NI combined).
So you pay less than 20% income tax and have your full personal allowance.

Together with NI your effective tax rate is 20%.

Breaking news - you just about covering what you take from state in terms of NHS, police, education etc. You're a very borderline tax contributor but you pay absolutely tiny amount to support others. If you have 2 kids receiving education than you still take substantially more than you pay.

Come back her when you work all hours and high stress high earning job and pay 62% tax, denied free childcare and don't get any better state services.

agree about cliff edges, but reducing pension contribution benefits is even more stupid idea.

Right now people can save into pension so on take out it's going to be taxed at a lower rate most likely, but still taxed and people won't go on benefits. These high earners are also very unlikely to be dependant on state old age care.

You remove this option and people will just reduce their hours. If there is no tax benefits and they can't pass it on to their kids (it's going to be effective 80% tax rate for beneficiaries) then why to work extra at all??

Yes got to 43 and left the country, no issue paying tax if I see the benefit. Also left with DH - a NHS doc. The brain drain is real.

I feel no need for the NHS when we have Bupa tbf. Private healthcare gets things done so quickly and efficiently.

Mind if I ask where? Is it Australia?

Labour have form for not understanding the entirely foreseeable "unforeseens".

Back in Brown's day, when he changed the tax rules for limited companies and there was a stampede of sole traders converting to limited companies to save tax, his paymaster general Dawn Primarolo stood in Parliament and said they don't expect saving tax would be a motivator for sole traders to convert to limited companies. What planet are these people on?? Did they really think that sole traders wouldn't convert if they could save a few thousand per year in tax???

I think this is why many are leaving the UK especially as we don't tend to see a lot of benefits for the money we're taxed.

And the rest?

I remind you that last year the Govt proclaimed there was zero, yes zero pct PIP fraud.

A full breakdown of the figures was released in response to a Parliamentary Question and published by the Guido Fawkes website which said some £600million was funnelled from the Department for Work and Pensions into the scheme in 2024, and, as of April, some 589,000 benefits claimants in England and Wales have the publicly-subsidised cars.

Context, ok.

Here’s some context for you - the mobility scheme cost GBP 600 million last year.

But as part of total UK government spending this is minimal