AIBU to feel disheartened by earning into the higher tax band?

[Chocolateapot]

I have finally after many many years of studying progressed in my career to just slightly above the 40% tax threshold. Unfortunately I’ve realised this now means any additional income I earn is now taxed at 40%, student loan 9% and 2% national insurance, essentially giving a marginal tax rate of 51%.

Not sure why I bothered tbh

Socialism at work

you should move to Scotland. you'd keel over from the next payslip.

It's possible to just... not think like that. I just don't think about how much I'd have if I didn't have to pay tax, because everyone pays it. I was happy to finally move to the higher rate relatively late in life and didn't waste energy thinking about 'Oh but it would have been more if the tax rate was lower' - like death, it's inevitable, and it's not even that high in the UK. It's the price we pay to, for example, not have to pay several hundred a month for health insurance that might not even cover costs like they have to in America.

It feels really unfair. 51% is a huge amount to have deducted. Once you hit that threshold they get more of your earnings than you do!

Pension contributions are taken off first if it's through your employer, so that helps a bit

On here, you’ll be told to be grateful or to “check your privilege” or some other such shite. But yes, it’s shit and you do wonder why you bother.

Yup come to Scotland! My marginal tax rate is 67%. Those grads from England living here add 9% on top for student loan repayment. Imagine only seeing 24% of your overtime or pay rise? And they wonder why people go part time.

9% repayment for the student loan is a criminally high amount.

Plan B? I feel for you. Such a disincentive to earn more.

Wait till you reach the 100K tax cliff edge.

Is it any wonder productivity in the UK is so low. The country is stagnating.

Happy to trade wages with you op!

I think this is all down to mind set. The student loan is a loan you are repaying - not tax. Would you feel better if you got it and then had to pay it?
On the rest the reality is if we didn’t pay tax at 40% you’d probably earn less as the purchasing power would be more so they wouldn’t need to pay as much. I think in long run it all comes out in the wash and and I’m glad to have free at the point of need health care, schooling etc.

British Benefits Bonanza

Pay more into your pension. Yes you won’t see it til you retire, but it’s better in your pocket than the tax man’s

Solidarity. Just seems some of us are paying in for the “free at the point of use” services and many frankly are not paying but still get the benefit of it.
.

Yeah. I worked very hard, got lots of qualifications and experience and went over £100k. Immediately lost the £12k personal allowance and instead that amount was taxed at 40% (so paid another £4800 in tax instantly)
, the 30 hours childcare (translates to about £12k per year) and the tax free childcare (translates to another £4800 per year). You can see why people don’t want to change tax bands when the take-home pay difference for someone in my setting is reduced by over £20k when you go from £99k to £101k). It’s totally disheartening when you’ve worked hard.

(and yes I could put the difference in pension and I did for a while to avoid this problem, but now I earn more so I accept the hit to my take home pay as we need the money for the mortgage)

(and yes I know I am lucky and people will say I shouldn’t complain but it is frustrating when you’ve always been told to work hard and it will pay off: I have a lot of student debt, have given up evenings and weekends to studying and extra career progression projects for over a decade at this point).

The benefits bill will exceed the income tax revenue in 2026.

The thresholds are frozen until at least 2030 and so some fiscal drag coming for you as well.

A very shocking situation in the UK right now.

I get how it feels. This year my employer is paying a bonus for the first time in years and Im at a pay level where I will lose 60% of it in tax. I'm only grateful I've not got student loan on top.

I can't just add it to my pension because i desperately need the money to replace my 20 year old car. My mortgage went through the roof earlier this year when I refixed, ive got whopper childcare bills.

I know I'm luckier than most but I worked so hard for that bonus and my boss is excitedly talking about the number and I could cry a tiny bit.

@cricketnut77 this “socialism at work” was introduced by the Tories and their fiscal drag.

You’d also lose child ben if you had a kid.

Depends really if you want to live in a society that isn't falling apart. Care staff, nurses other hard working people work extraordinarily hard - 12 hours shifts etc..who do you think should pay more (once they have enough) ?

If the answer is billionaires and you vote to make it happen then you'd at least be consistent...but are you? Or is it just moaning about a personal situation?

All undergraduate loans have a 9% repayment above the threshold - the threshold changes depending on which plan you’re on though.

But yes, it is a lot

https://www.eqaccountants.co.uk/high-marginal-tax-rates/

Would it help to know you're not alone? Some Universal Credit claimants have a marginal tax rate of 83%.

It's still more money, and you're only charged that rate on the amount you earn over the threshold, the rest is taxed the same as before

Someone has to pay for the freebie takers, OP. Who is going to pay their benefits, if not you and the other mugs who try and better themselves and their families. This is what you get for the audacity to earn a living and stand up on your own two feet.

Like PP said. Socialism at work.

Tax is the price we pay for living in a civilised society. I undoubtedly pay a lot of tax but I see it as money that wasn't ever really mine, so I am not really bothered by it.

The country IS falling apart. Look at the state of public services, the economy. Labour’s plan is to tax, tax, tax anyone who works to meet the ever-increasing benefits bill. I wouldn’t mind paying so much tax if it was reflected in good public services but that isn’t the case here.

Surely you saw it coming though?