AIBU to hope the £100k cliff edge for funded nursery hours is removed?

[horchatatresleches]

News is that the education secretary is looking at nursery funding but it’s unclear if it’s to reduce or increase the support available at either the upper or lower thresholds. AIBU to hope that the harsh cliff edge which stops all nursery funding at £100k is removed or least replaced with something tapered so that people aren’t losing money for being marginally above the threshold?

The swot comparison is spot on.

So you think high earners are only there to pay for other people's kids?

I understand that anyone earning less than 65k is a net tax recipient on average. So worth being more precise about what you say.

Due to the low taxes paid by low and middle income earners compared to other advanced economies most people don't pay for the services they consume.

The Americans argued for no taxation without representation. Democracy at the moment feels like two wolves and a chicken asking what's for dinner and it's always on basically middle class high earners to pay for it

I understand that anyone earning less than 65k is a net tax recipient on average.

What’s the source of that understanding? I’d venture to suggest that a single parent with two school age children on £65k is far more likely to be a net recipient than her childfree sister on £50k. It’s a ridiculous generalisation that has no nuance.

You pay about £15k in tax and NI between £100-125k due to the removal of the personal allowance.

Thats about the value of 30 free hours plus tax free childcare.

If you salary sacrifice and claim it anyway (as you would) - the government is down £15k in tax plus still paying £15k in childcare.

People earning up to £160k are doing this (and even higher salaries by working part time too).

So they are still paying for themselves, even with the childcare. And if they didn’t feel they had to salary sacrifice to avoid losing money - HMRC would be taking far greater sums in tax.

The source of the understanding is maths.

No it isn’t. I want to see some statistical evidence. Maths has no nuance and fails to take circumstances into account.

Exactly. If I moved out of the area, I’d have to quit my job which would cost the economy much more than helping me a little with childcare. Also, a properly funded childcare system means more jobs in that sector (and therefore people paying tax!). Win win!

The tax system is too complex and the tinkering by successive governments has created many non productive situations and loopholes

Why do lower earners pay income tax when they are paid more in benefits, and the withdrawal rate makes it not worth working?

Why are middle and higher earners penalised for having children to the extent where one partner (usually a woman) quits work and looses Thier career?

Why are the business tax rules so hellishly complex you need an accountant or you will pay double or more the tax?

Why is NI and Employers NI not visible to all and harmonised with income tax?

All the bands and the oddities need sorting for the benefit of the entire country. We have one of the lowest rates of productivity in the world, and this is why.

Yes it is. The ONS publish their statistics and methodology.

‘Maths has no nuance’ - the new Labour slogan ?

Ah.

The flat rate tax argument which also sends people into meltdown because 'the rich should pay more'.

Which of course they would in a flat rate tax system.

The problem with the tax system is the loop holes and exceptions. The more you have of these, the more things are open to abuse.

With this in mind this is what we should really be considering.

(I'm in favour of a flat rate system - it would iron out problems at multiple sticking points across the incomes).

Still no link? No it’s not a slogan, it’s common sense.

My kids are through nursery and I'll never earn £100k. It must also reduce the tax take, not just this year, but for years to come, so I really think tapering it is important so nobody is worse off by earning more, it may mean earnings stand still, but should not be a cliff edge.

As I suspect you well know, this figure is an average.

For an average individual to break even in terms of tax paid vs services used, they need to earn 65k each year.

Clearly the annual amount will differ enormously not only between people with different circumstances but also for the individuals over their lifetime as the make up of their household changes.

A family with 3 school age children use up around £25k of state resources each year on schooling alone. That would necessitate a salary in excess of £80k to fund that even if every penny of their taxes went to education. As it is, education only accounts for about 10% of public spending so you can see that during the school years any family not earning several £100,000's is a net cost to the taxpayer.

The £65k figure is the average lifetime earnings that the average person with average number of children and average healthcare needs to generate to not be a net financial cost to society. I think people grossly underestimate this figure which is part of the problem as they erroneously think they are paying their way and then become resentful of others. The reality is that barely 10% of the population pay lifetime taxes that make them a net contributor.

Do you want a link to the ONS or a bbc bitesize cartoon on foundation level statistics?

Why on earth don’t you just provide the link you keep posting about do the conversation can move on from tit for tat nonsense?

Doesn't even have to be flat rate, just remove complexity so that the loopholes disappear.

E g.

Remove the withdrawal of tax free amount at 100k and childcare removal but also change the start of the 45% band to 95k (or whatever balances the books).

Extra effort should ALWAYS be worth it no matter if you are earning 15k 50k or 100k

Thank you. It really isn’t that difficult. Unless of course no link exists.

What link are you talking about?

Again, what link? The ONS or statistics?

I think another thing to point out given where the conversation is there's a massive difference between how much tax someone on PAYE pays compared with someone self employed as a contractor in this pay bracket too.

The difference is surprisingly big because of all these loopholes. It costs the companies employing through contact a lot less per worker. And those workers are able to write off some of their income as 'expenses'.

The contractor is not an income generator or investor either, so that justification is not relevant in these cases.

I know IT workers and NHS staff in this bracket. They look on paper look like they are earning similar amounts but the loopholes mean they can have vastly different take home pay because of how much flexibility they have/don't have with these loopholes.

The PAYE employee will always be paying a much higher amount of tax.

ONS methodology
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/methodologies/theeffectsoftaxesandbenefitsonukhouseholdincome

Bitesize statistics
https://www.bbc.co.uk/bitesize/topics/z9p3cdm

Well yeah everyone on the cliff edge I know just works 4 days to bring it down anyway so that’s paying less tax overall then

if we got the free hours we’d work more 🤷‍♀️

Haven’t you been reading the news? Hospitals get incentives for removing patients off waiting lists; and now GPs are supposed to reduce referrals by 25% by seeking advice and guidance instead. Decisions are made by people, who have never seen the patient!

DD for instance has a metabolic disorder and is supposed to get an appointment every 6 months with the metabolic team. She had two appointments cancelled a couple of days before, and the next one is two years after the last one!

Ditto, I have a benign kidney tumour, and if it starts bleeding, the prognosis is poor. I supposed to have a MRI scan every year, to see how it’s growing - the bigger it is, the more risk of bleeding. It is one year and eight months now, since the last one; and as that was the first one, they have no idea how fast it grows!

Well they would still be net payers.

They pay £40k in tax and would get £4k back in childcare. Plus £400 if they also got the tax free childcare allowance back as well.