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!

@Peasontoastt totally empathise with you OP. We moved overseas, pay 20% tax versus 40% in the UK. I think the problem in the UK is you pay so much tax but can't see where it's being spent and don't feel the benefit. People are generally disgruntled, fed up and miserable in the UK now having spent years paying high taxes whilst nothing works - roads, NHS, schools, economy - rising costs. There's a "whats the point" feeling and everything feels hard. I have friends that lived overseas. Came back with fantastic jobs and still can only afford to get by and now desperately trying to leave again.

We will be seeing higher taxes and increasing unemployment, just like every other time the Left takes over.

@lifeonmars100 generally/statistically whatever you want to call it. This doesn't mean every single individual in said cohort!

It's not quite as simple as that. Most of the population is on a pretty low rate, true. However there are various marginal tax rates that are genuinely punitive. That does have an impact on productivity

I mean shes not being demonised for paying tax though. She’s been demonised for not reading the room, at a time when lots of very hard working people are seriously struggling, and complaining about how difficult it is to be a higher earner.

I'm not sure where in the UK the @OP is, but some people in Scotland are being hit a bit harder because of the tax situation here.

I think that most folk were happy enough with the idea of paying a penny extra in tax here, but I don't think that there was the expectation of the tax bands being so different: the intermediate rate of 21% starts at 26,562; you pay the higher rate of 42% here when you hit £43,663.

I'm retired now, but did a bit supply teaching. My pension was taxed at the basic rate; my supply teaching pay was taxed at the intermediate rate.

I should imagine that the rates here makes life more difficult for those who have mortgages or rent to pay. (Conversely, the low paid are slightly better off.)

First post, plop and run....

Shock

All this off you go stuff doesn’t actually help.

Bollocks

We pay tax on almost everything we buy. Are you saying over 35% of people in "this country" (which country, btw?) don't buy things?

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

if that's what you want to do - do it, spend time at home being frugal and give up your job. Nothing stopping you handing in your resignation on Monday morning

Income tax. The thread is about income tax.

I've never understood why people work their arse off to pay for childcare. It's the simple life for me. I want to spend time with my child. I don't have a car, I live in a flat, we still can have holidays and we can just about save. The amount of people I hear about who are on 100k and who moan about it is ridiculous. I would make that money go so far.

Money makes no difference to my ambition. Its always been about achieving my potential, rising to the highest level of responsibility in my field, having opportunities to use my skills, having influence and autonomy, not getting stuck doing the same thing long after it becomes routine and unchallenging, trading out aspects of grunt work for more interesting jobs. The extra money has genuinely just been a bonus.

You said "Over 35 per cent of the population pay no tax at all".

which is a very different statement

I completely understand, I live in rented accomodation (just over 1000 a month), I worked out the other day that if I was earning just 18k paye I would recieve almost 2.5k in UC a month on top of that (i have a child on high rate DLA), so basically 48k salary for being a SAHM - this is not much less than i actually earn working 40hrs a week. And people wonder why we have a country lacking in ambition..

Go and get a lower paid job and see how that works for you.
I earn over 90k a year and have lost motivation just because I'm in my 40s and don't care, I'm happy to pay my taxes. I also think it's great that when I go over 100k instead of automatically hitting the sticky 60% when I lose my tax free allowance I can pay into my pension and get 40% tax relief.

Yeah, I get the child care stuff is annoying but like I say go and get a 40k job and see how that works for you both financially and from a pressure point of view.

Income Tax 20% basic then goes up to 40% from 50k which is an average salary in London!
VAT is 20% which has to be one of the highest in the Western world
Inheritance Tax is 40% over 325k which almost every property in South/South East England is now over that…and that is also one of the highest in the world.
Capital Gains Tax.
Council Tax.
Stamp Duty!

Then you have fuel where there is VAT and Fuel Duty! Even if you take a car, a brand new car you have showroom tax. You then pay VAT on the car. You then insure it which is also VAT. You then fill it up, more taxation. Road Tax plus VAT….

This country is one of the highest for taxation in the world!

how can people claim VAT back?

So much more important to have a lifelong relationship with your paediatrician than your parents / grandparents

effectively paying 60% tax on earnings over £100k is definitely a disincentive to work harder - why would I want to push myself when over half of it would go to the gov? I’m now putting more and more into my pension, which is good for my future but not what I would choose to do, and probably not the best option from a UK macro level.

A lot of those benefits stop when your child is 18. You would lose a lot of them.

And then in 20 or 30 years you might look back and wish you had spent more time with loved ones, be tired from constantly working for years, and realise that the job means nothing at all. Ambition is different for different people.

What do you do? Most people I know are on about £28k - £45K and they work hard. They all seem bright and talented but what does a person have to do to earn triple the average wage? Even the couples I know have combined incomes of between £70 and £90K.

The thread is about income tax. It's clear I was referring to income tax.

Obviously people pay VAT. That stands to reason.

Over 35 per cent of the population in the UK do not pay any income tax at all.

You're probably one of them.

https://www.globalvatcompliance.com/globalvatnews/vat-rates-in-europe-2021/

GB isn't the highest VAT in fact its lower than the average of 21% across EU countries

Hungry, Greece, Sweden, Italy, Ireland, Latvia, Finland, Estonia, Denmark, Czeck, Poland, Portugal, Slovakia, Slovenia, Spain, are all paying higher rates of VAT than GB