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!

Amongst all the discussions, I get that tax income needs to be enough for the country to work. And cliff edges are unfair for most things. And that those at the top end should also benefit from stuff their taxes pay for - I would argue for subsidised childcare for all. ( I’ve no skin in the game as nearly retired with no kids).

But at the same time, how is it right that companies that can pay huge salaries for some cannot reward their lower paid better, so they don’t need to claim in work benefits, effectively subsidising the profits of those who can afford to pay 100k and more to some? why can the government not review this?

I would much rather earn enough to live on in, say, a supporting role in the overall team AND pay some tax but not have to claim benefits so I can live. I’m no economist (as clear no doubt from my posts haha) but I would love to know why the salary disparity cannot be closer, if those at the top were to lose cliff edges and also be entitled to certain benefits like childcare. Or is it that those at the top and business owners just think they deserve the disparity as they are worth it?

Yes Labour have just landed tax policies on people without thought to behaviour.

Apart from the increase in employers NI tax policies are exactly the same as they were under a Tory government. Nothing’s changed.

The NIC hike was a massive hit on organisations. You can't just swat it aside like an irritating fly. It's probably the biggest tax hike in recent history!

I thought this thread was about individual taxation. I guess that’s like a pp’s highest taxation in history - short memories or lack of knowledge about economic history.

Yes, agreed. Ridiculous that so many working people are reliant on benefits to survive, and that individual taxpayers therefore play second fiddle to corporate shareholders.

There should be a limits on the maximum package available for executives, linked to the pay of the lowest paid worker in the company, or their contractors.

True. But what has it done other than damage businesses and set up for another round of tax hikes in autumn

They’re in a cycle of tax rises

• Agricultural Property Relief (APR) and Business Property Relief (BPR) - farmers IHT. This hasn't filtered in yet but it will, and it's going to be ugly
• IHT on pensions - absolutely massive change which will cost some families many 100k
• CGT rates changes
• Business Assets Disposal Relief
• Non Doms
• Private schools VAT

It's largely the same group of society hit from every possible angle

I wonder if attitudes like OP's stem from the massive wealth inequality in this country at the moment. I became a higher rate tax payer this year and am allegedly now in the top 10% of earners in the UK, I'm way off earning £100k. The idea of being in the top 10%, you should be loaded right? but lots of people aren't especially when they have kids in nursery.

Personally I have no issues with paying tax, like a PP its just something that happens and then I get my take home pay. My kids are no longer in nursery so my take home pay feels massive in comparison to when they were.

Why should maximum pay be capped and linked to the lowest paid worker? Executives are the ones making the big decisions that bring money from clients.

If you're physically healthy and rely on benefits that's a you issue. Earn some more money.

Exactly. Tax policy shouldn’t be driven by what people think higher earners should get or shouldn’t get compared to them, or what is deemed ‘fair’ it’s should be driven by what raises the most money.

Put taxes up too high and people change their behaviour and reduce the tax take all the time.

The Tories also massively ramped up income tax on high earners. It’s not really spoken of as it doesn’t do the Tories or Labour any good to highlight this but it’s a fact.

How much is enough for high earners to be expected to pay?

So presumably there are no people where you work or you own the business or whatever that are paid such that they claim in work benefits? Could your business operate as it does without those people? If you don’t need them why employ them? If you do need them why should they not be paid enough that the government doesn’t have to pay benefits in kind to the employer? Do you think it is right that business profits are inflated with taxpayer top ups in kind to boost crap wages that help create a certain profit?

@Calidrisalba

Is NMW set up at such level that a person working full time doesn't need state top up?

Also - wouldn’t it be fairer to the top taxpayers if passive income were taxed more fairly? Again, this could result in being able to reduce taxes for all, or at least be a fairer system, get rid of cliff edges, give higher earners child benefits etc. It’s ridiculous that income for not working is lower tax than from working. IMHO

No. Sadly not. But this would be impractical due to the differing cost of living in different areas.

I don’t know, is it?

At DH's job all the grads get paid £30k at the bare minimum.

People get paid what the market is willing to pay for them. Don't like it, work more hours, work a second job or get a new job entirely.

Just double checking - your input in the high income tax fairness question, is it on your husband’s behalf?

Yes. I just work PT.

So does every single person in your DH company earn minimum wage 30k which I believe is 5k over minimum wage?

You haven’t answered the question - say someone works full time in a role that doesn’t pay very well, but is very much needed for said organisation to operate effectively, do you think it is ok for said company’s operations and profits to- and dare I say higher salaries - be subsidised from taxpayer benefits? Do you really expect that someone who say already works 40 hours should NEED to work 2 jobs just for bare essentials? Surely you can see that an effective and profitable organisation needs more than a narrow band of clever highly paid roles or graduates?

What do people think of the taxes they have in the states that high wealth people must pay when they leave the country to live elsewhere? Someone mentioned these somewhere but I don't know anything about them to be fair. If the US does it though then it's an option.

I’ll hold my hands up - our business a millionaire CEO who spends most his time playing golf.

We then have a small number of senior managers who all earn 60-80k, and middle managers all £50k+.

Everyone below that is somewhere between £20k - £30k (some part time).

There is a significant wage gap. Our lowest full time employee is on £25,396. Minimum wage for 40hrs.

We employ at minimum wage for administrative or trainee roles, new starters in the industry, that kind of thing. But those people, I know, are using the benefit system to top up their income.

I think probably some of the issue might be that the majority of universal credit is not going to full time workers not able to make a full time salary work. Only 37%, so just over a third, of those receiving universal credit are in work in any capacity. And then the work requirement is for an individual to earn just 18 hours equivalent of the living wage a week. The IFS has noted that there is no incentivisation to move from part time workers to full time work.

Interestingly, on the debate about £100k salaries, the IFS also notes that a proportion of families on £100k will be eligible for universal credit if they have two children and are renting in expensive areas like London https://ifs.org.uk/publications/universal-credit-incomes-incentives-and-remaining-roll-out

What kind of person is not paid very well but is essential? I can't think of anyone?

And if they are working 40 hours and not making ends meet they should work more. There are people working 60 hour week and 80 hour weeks.

On not paid well but essential, our nursery workers are amazing but I know the majority of them get minimum wage. I believe care workers also get minimum wage. Salaries need to rise here in my opinion, and I’d much rather see these rise rather than benefits