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!

That’s the impact of it.

My take home pay on £99k plus childcare support is exactly the same as on £140k.

If I earn a penny less than £140k, I actually take home less money than on £99k.

Welcome to the UK tax system.

A few posters here keep on repeating on multiple similar threads that higher earners/wealthier people should count themselves very lucky and privileged and gladly pay more taxes.

Stats are:
Top 1% (about 310,000 people, on £160k taxable min) pay 29% of all income UK taxes. This is about 80bn.
Top 10% pay 60%, which is 166bn.
About one third of working age population don't pay any tax at all.

If only 5% of those top tax payers change their behavior and quit / emigrate, the immediate loss is 4bn. Of income tax alone. But there's also VAT, NIC, most important - they are usually those who generate growth and improve productivity.

And it doesn't even need to be a tangible change of tax regime, it's overall attitude of British society against success. Before you jump - gaps won't be necessarily filled, these people usually have some unique skills not easily replaceable.

But yes, carry on with your ideology. It's proving very successful in getting Reform in.

It's proving very successful in getting Reform in.

Is it? I could have sworn they’d only got four MPs.

Imagine being upset to be in the top 11% of earners in the country, let alone feeling badly done to.

My assumption is that the answer to the highest earners finding avenues that involve paying less, those beneath them in pay will end up paying more. It will have to come from somewhere. The thresholds will just get higher for those further down the taxation chain.

Actually they are maximising their work life balance by not maximising their income. To maximise their income they’d grin and bear the disproportional level of tax.

Your view seems to be predicated on the basis that everyone’s entire income belongs to the treasury, and we have a moral obligation to work full time regardless of the benefit to us and that they will then deign to let us keep some of it. However, most of us work on the basis that our income belongs to us, as a reward for the value we create, and in return for a functioning society we accept a reasonable level of tax.

There is a a fundamental difference between a recipient of benefits who is supported by society (via the treasury) because they need it, and rightly seeks to maximise their claim within the rules, and a contributor to the treasury who is at liberty to work as much or as little as they see fit to provide them with a lifestyle they are comfortable with. Unless of course you think we are all slaves to the state. However don’t need to remind you that the government is there to serve the public, and not the other way round!

@SleeplessInWherever pushing higher taxes on the highest earners will leave us all worse off.
The avenue those higher earners have to pay less will quite often be leaving the country, and then the standard rare tax payers will have to pay more. We are much better off having 30% of a lot than 50% of nothing.
As others have also said, those on these very high salaries are also often broader wealth creators, employing lots of people, driving innovation and development and investment from abroad into the UK.

Trickle down economics has been proven not to work.

I mean who employs you a rich person or a poor person? I've never gotten a job from a poor person.

Trickle down doesn't exist in the way it was presented. Truss was unable to explain it properly hence average public decided that it's ok to tax high earners/wealthy more and more.

Trickle down was explained as richer people being taxed less will spend more and it's good for economy. It might or might not work. These people are more likely to invest excess rather than spend it. But the real issue is that these people will adjust their behaviour in exactly the same way as poor people do. Wonder why a lot of people on benefits only work certain min hours?

The same for high earners - there is a threshold after which it just doesn't make sense for them. And then there is another threshold after which it's just better to move elsewhere. And it's happening en masse. Hence RR is reviewing her flagship non-doms policy. Because it costs her instead of generating revenue.

You might argue till blue face that rich should appreciate their privilege and gladly pay whatever they are told to. In the same way we can say that poor people should be grateful for the state support they receive and work all hours they can. Neither will happen.

If you want to succeed you need to implement the system which will work, not what you believe other people should do.

@nearlylovemyusername

If you want to succeed you need to implement the system which will work, not what you believe other people should do.

Nail on the head. Theory is fine, but what matters is reality. Politicians, especially Labour, have form for not properly thinking about human behaviour.

Here's the proof:

www.lse.ac.uk/research/research-for-the-world/economics/tax-cuts-for-the-wealthy-only-benefit-the-rich-debunking-trickle-down-economics

As for the super-rich scurrying away:

Don't say, nah, it's the Guardian. Pull up your own facts.

https://www.theguardian.com/news/2025/jul/07/non-doms-labour-super-rich-leaving-the-uk#:~:text=After%20Vladimir%20Putin's%20invasion%20of,%2C%20Singapore%2C%20Geneva%20and%20Dubai.

It seems to me like you are missing the point people are making.

On the face of it I think most people would agree tha the lower rates of pay are not enough to afford childcare, and yet society needs people to have children.

However, what we also see is that childcare has become such an overwhelmingly huge expense that even for those who can afford it, it takes a huge bite out of their income. So much so that when you are no longer in receipt of any subsidy, you may find that your professional job doesn't leave you with more than a low paying job.

That doesn't really seem fair either, and maybe more importantly, it also has unwanted social effects - more mobile, high earners moving away, or simply not having many kids. Or people doing things to reduce their income on purpose.

We are not super rich or leaving. Zero inheritance or family wealth. But we are both well paid professionals, and DH will be going down to 4 days a week from next year. Regardless of whether this is cheating or not, by working fewer hours than he could! 😙

DS is starting out in a high paid profession. He is making tentative plans to move to Hong Kong via his employer in the near future. In fact, he chose his employer for this reason. He works all the hours God sends, and thinks he will do better there than here. I agree.

I literally know someone, high up at Goldman Sachs that moved from London to New York because of the non-dom stuff. Didn't want all his global assets taxed (and honestly why would he)

I think what the conversation has shown is that it does leave you with more than a lower paying job, but it doesn’t leave you with enough of a gap between someone who earns less, and you.

Some want to earn more; and have a set amount more than they’re happy to receive. Someone suggested yesterday that £1900 more wasn’t enough.

I may be missing the point somewhere, but it should be.

Likely the same people who are upset when NMW goes up because it narrows the gap.

We do need to encourage high earners to not run away in a strop. But IMO that should also be balanced with still paying a higher percentage of tax than others.

Putting the higher rate down to 30%, when mid rate is currently 40%, makes absolutely no sense. If high rate went down to 30%, I’d expect to see all others going down comparatively. We cannot prioritise the top 15% of the countries earners and expect the remaining 85% to pick up the difference.

Would be great if you could quote a post on this thread, apart from yours, which suggested reducing highest rate tax to 30%.

Not sure many people are advocating for reducing HR down to 30%!

I think most are wanting a change to the cliff edges such as loss of free child care at £100k, and ridiculously high marginal rates such as 62% at the same income level.

We definitely need to be doing something about those - i.e. incomes between £100k and £125k where there is a real disincentive to earn more and massive motivational/behavioural factors to reduce taxable income one way or another to avoid the cliff edge.

Another not mentioned yet is the VAT registration threshold of £90k which is likewise a massive disincentive for small businesses and sole traders to grow their businesses to their full potential. For some businesses, there's an immediate "loss" of thousands of pounds by going over the threshold by a few pounds and for some, they'd need to grow their businesses to around £110k to be back to where they were in terms of profits when their turnover was £89k! That cliff edge encourages sole traders simply not to grow, to refuse additional work, and say a shop closing one or two days per week to stay under the threshold or in a real genuine case of mine, a guest house closing off two rooms to stay under the threshold.

These cliff edges need to be scrapped and replaced by more tapering so that they don't act as such a "brake" to increasing wages/turnover.

@nearlylovemyusername

HTH

@nearlylovemyusername

Hope this comment thread also helps.

I did ask yesterday if the 20% and 40% would also go down by a comparative amount, or if we were just favouring the wealthy.

@SleeplessInWherever

you're really struggling...

don't worry, you're very unlikely to have this HR problem unless sky high inflation

I think this is what some people aren’t grasping. If a tax measure isn’t actually increasing tax take by influencing overall behaviour, then it’s better to look at ways that will increase tax take. Like the non-dom stuff, like the cliff edges in the tax regime. If you smooth these out, tax take is much more likely to go up, as is productivity.

The school vat thing as well. This isn’t likely to raise any real money now. I have no skin in the game here either as I’m not sending mine private, but the people who I know that do/did are often doing so because their children needed extra support or had SEN. And the 20% extra pushed the fees to an unaffordable level

Because I answered your question? 😂

I’m not unlikely to have the problem. However I won’t see it as a problem, because an increase in income hasn’t made me automatically selfish.

@SleeplessInWherever “Some want to earn more; and have a set amount more than they’re happy to receive. Someone suggested yesterday that £1900 more wasn’t enough.”

The comment your refer to was that due to tax and loss of childcare allowances, someone on £100k a year took home £1,900 a month more than someone on £35k - which is equivalent to a 65% tax rate on every penny earned over £35k.

It’s not ‘£1,900 a month more isn’t enough’ it’s ’the government taking >50% of any additional earnings is too much’.

Yes Labour have just landed tax policies on people without thought to behaviour. So now we’ll have less.

After £70bn tax and borrowing hike at last budget there’s talk of more. When RR said there wouldn’t be.

They’re chasing their tails but we will see it most.